§ Mr. FabricantTo ask the President of the Board of Trade if he will make a statement about the future of the transitional reinsurance facility provided by the Export Credits Guarantee Department. [7844]
§ Mr. NelsonOn 24 June 1993,Official Report, column 265, my predecessor announced to the House that the Government would extend the transitional reinsurance facility until at least the end of 1997. At the same time he undertook to give two years' notice of any decision to withdraw from the facility. The case for the continuation of the facility beyond 1997 would be reviewed in 1995.
The review has now been completed. It remains the Government's objective to maximise the provision of this type of reinsurance by the private market, with the aim of ultimately eliminating the need for this form of Government support. The review has confirmed that we are making progress towards this objective. Only minimal support was required in 1995, and we do not expect the facility to be called on at all in 1996. Nevertheless, the Government recognise that there remains a need for the facility to remain in place for the time being, to be used as a last resort in the unexpected event that the private reinsurance market is not able to meet fully the needs of United Kingdom exporters. The terms and conditions under which the facility is offered will continue to reflect this objective. We intend that the facility should be reviewed again in 1999, and as before, in order to provide a stable framework of support for both insurers and UK exporters and to avoid disruption to the market, adequate notice will be given of any decision to withdraw the facility.