§ Mr. BatesTo ask the President of the Board of Trade if he will make a statement about the future of the transitional reinsurance facility provided by ECGD to the privatised successor of its Insurance Services Group.
§ Mr. NeedhamAt the time of privatisation of ECGD's Insurance Services Group, the Government undertook to top up the reinsurance available from the private sector as necessary for up to three years to ensure that the reinsurance needs of the privatised operation would be met.
It has become clear that in the immediate future capacity in the private reinsurance market may well not expand sufficiently to meet the likely demand for short-term export credit insurance. This, in turn, reflects the current rapid growth in our exports.
The Government have, therefore, decided to extend the transitional reinsurance facility until at least the end of 1997. It nevertheless remains the Government's objective to maximise the extent to which reinsurance is provided by the private market and it will take all necessary measures to encourage that process. The Government retain the right, however, to terminate this facility, but, in order to provide a stable framework of support for both insurers and United Kingdom exporters, it undertakes to give two years' notice of any such decision. The case for continuation of the facility beyond 1997 will be reviewed annually from 1995.
Given the significant change in the nature of this facility, the Government have also decided that they should, in principle, be available to other credit insurers who give support to our exporters.
I am pleased to be able to make this statement in response to the representations which have been made to me by the principal export credit insurers, exporting companies and their representative organisations. It 266W further underlines the Government's commitment to promoting exports in order both to protect and provide jobs and reinforce our emergence from recession.