§ Mr. DalyellTo ask the President of the Board of Trade what assessment he has made of the loss to British engineering firms of exports to Libya as a result of UN sanctions.
§ Mr. Charles WardleThe British Government neither promote nor discourage trade with Libya. We are unable to assess any actual loss of trade to British engineering firms. I can tell the hon. Member however, the legitimate exports of general industrial machinery and equipment constitutes the bulk of our exports to Libya. Figures for United Kingdom trade with Libya over the past five years are given in the table.
Department's response are being published today. A copy has been placed in the Library of the House of Commons.
The TFSS is designed to encourage UK exporters to move into new markets. Last year, the Department spent £14 million on the scheme in support of some 6,500 to 7,000 firms at around 300 events. The scheme is based on grants which are delivered to exhibitors through "sponsors" such as trade associations or chambers of commerce. Eligible applicants receive 50 per cent. grants towards the main costs of exhibiting. Outside western Europe, a travel grant is also paid for up to two people to man the stand.
I welcome the evaluator's report, which shows that there is a clear justification for retaining the scheme.
The Department agrees with KPMG's conclusion that the rule under which companies are only eligible for support for three trade fairs in any market, the so-called "three times rule", should be retained. The survey provided strong evidence that the three times rule increases value for money by removing from eligibility regular exhibitors at a single event, ensuring that for a given budget more firms benefit from the TFSS support.
In response to suggestions that some companies might find support more helpful in this form, the Department will however be prepared to offer firms who opt for it a variant on the three times rule, under which support is offered at half the normal rates, over twice as many events.
The report recommends that international events, currently known as "flagship" events, should no longer attract support for more than three participation as they do at present, but should cease to be subject to individual country quota. The Department accepts this recommendation in principle and will consult sponsors on 755W which events will constitute a new "international" category.
The present scheme restricted government assistance for overseas trade fairs by requiring that a minimum number of participating firms be eligible for support. The report recommends that minimum numbers for these events should not be based solely on those eligible for grant. The Department accepts that the benefits of attendance depend on the numbers in the group, not on whether they are all supported.
The Department has not accepted KPMG's recommendation that priority be given to emerging markets with above average exports prospects, or which have significant entry barriers, by allowing five, not three, supported participation. The Department, however, accepts the need to improve the scheme's coverage of such markets. We consider the annual priorities exercise, which selects the trade fairs which are to be supported, a more appropriate way of improving the scheme's coverage of emerging markets. In addition, the Department will increase assistance to sponsors in the selection and promotion of fairs by providing greater information on new markets and fairs with above average exports prospects.
The Department does not accept, as a general rule, the recommendation that individual company participation be grant-aided where there is no group participation arranged. However, the Department will consider claims for treatment as a special case from unrepresented or self sponsored small industries.
KPMG's research indicated that the sponsor system was in principle the most appropriate way of delivering trade fairs support. Their report however suggested ways of improving sponsor performance. The Department has proposed revised criteria for sponsorship and will step up its monitoring of sponsor performance and produce a code of practice for sponsors. The Department is not in general in favour of introducing competition between sponsors, but sees advantages in opportunities for greater co-operation between sponsors and the private sector.
The changes I have announced will take effect from the 1996–97 programme. All in all this was a positive evaluation of the Government's support for overseas trade fairs.