§ Mr. Matthew TaylorTo ask the Secretary of State for Trade and Industry if he will estimate the net savings to the Exchequer in each of the next 10 years from restricting export credit guarantees to non-military exports; and if he will make a statement. [127502]
§ Mr. Caborn[holding answer 27 June 2000]: If the hon. Gentleman's question is intended to ascertain the effect of a general restriction on export credit guarantees to non-military exports, the answer is that I do not envisage any net savings given that ECGD supported business caught by it would have been priced and managed with a view to at least breaking even. Additionally, while such a restriction would tend to reduce ECGD's exposure to interest make-up risk, it cannot be predicted at the outset whether this would generate net savings or expenditure for the Exchequer.
Indeed there would be a cost to the Exchequer from such a general restriction arising not only from forgone tax revenues which would arise otherwise from business thwarted by the restriction but also from any consequent reduction in employment.
If however the question is intended simply to elucidate the effect of the Chancellor's announcement of 11 January, extending the UK's unilateral ban on export credits in respect of "unproductive expenditure" to include a further 22 countries, then assuming recent trading patterns continue I would not envisage any costs or savings to the Exchequer given that, from information readily available, the £775 million business with these countries supported by ECGD guarantees over the last five years falls within the productive expenditure criteria against which future export credit business will be assessed.