§ Mr. Neubertasked the Secretary for Trade if he intends to make changes under the sterling fixed rate export credit scheme; and if he will make a statement.
§ Mr. Peter ReesFollowing discussions with the main banking associations, the Government have reviewed the rate of return payable to the banks under the Export Credits Guarantee Department scheme for sterling fixed rate export credits. As a result, the Government have decided that the banks' margin on new fixed rate lending will be reduced from 1¼ per cent. over three-month sterling LIBOR to a maximum of ⅞ per cent. for credits involving repayment periods of less than 12 years. For credits of 12 years or more, the maximum margin will be ⅞ per cent. for the first 12 years and 1 per cent. thereafter. At the same time as these changes are introduced, arrangements will be made for interest make-up payments to the banks to be made by ECGD on a quarterly rather than half-yearly basis. In addition, certain detailed changes will be introduced to the methods of calculating amounts payable to the banks.
These changes will apply to new facilities and my right hon. Friend the Secretary of State for Industry has asked me to confirm that they will also apply to the home shipbuilding scheme.
ECGD and the Department of Industry will be writing shortly to the banks participating in the schemes notifying them of the new arrangements and of the date on which they will come into force.