§ Dr. CableTo ask the Secretary of State for Trade and Industry (1) what the planned net profit is of the ECGD for each year of the 2000 Spending Review (2001–2004); and how this figure would differ if loans by the ECGD were required to earn a 6 per cent. return; [132452]
(2) if he will list the net profit or loss for the ECGD in the last three years; and how this would have varied had the agency been required to record returns below 6 per cent. as a loss. [132457]
§ Mr. Caborn[holding answer 25 July 2000]ECGD is set the financial objective by Ministers of breaking even over the longer term on its new business account. Given the nature of ECGD's business and the highly uncertain nature of the risks which it covers, it will clearly be many years before the outcome of any particular year's business can be known. In recognition of this, Ministers have set ECGD a more measurable objective of achieving a ratio (Reserve Coverage Ratio) of at least 1.5 between its reserves and estimates of expected losses on amounts at risk under its guarantees.
ECGD is currently preparing its 1999–2000 accounts, which will be laid before the House in the autumn. The in-year surplus/deficit for the previous three years is as follows:
£ million Surplus/deficit Reserve coverage 1996–97 1,032.3 2.4 1997–98 (514.3) 1.0 1998–99 136.9 1.3 ECGD does not currently operate to a capitalised regime. This will be introduced by April 2002 as announced by my right hon. Friend the Secretary of State for Trade and Industry in its Mission and Status Review. The House will have an opportunity to debate the specific proposals for the ECGD Trading Fund including the proposals for the capital-charging regime.
§ Dr. CableTo ask the Secretary of State for Trade and Industry when he expects the Review of the ECGD to be published. [132795]
§ Mr. Caborn[holding answer 26 July 2000]I refer the hon. Member to the answer given to my hon. Friend the Member for Eccles (Mr. Stewart) on 25 July 2000,Official Report, columns 520–21W.