§ Lord Shutt of Greetlandasked Her Majesty's Government:
Whether it is their policy that the Export Credits Guarantee Department should operate with a reasonable expectation of breaking even. [HL573]
§ The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)Yes. Over the years, Ministers have periodically issued assurances to Parliament that ECGD is required to break even over the long term.
In support of this, since the institution of ECGD's new Business Acount in 1991–92, Ministers have set ECGD a more measurable objective. Specifically, the department is charged to maintain the ratio of its reserves (the sum of cumulative surpluses/deficits and the Underwriting Funds on its "open" years) to its estimate of Expected Loss on amounts at risk under its guarantees—this ratio is defined as the Reserve Coverage Ratio—at a value of at least 1.5.
As at 31 March 2000, the Reserve Coverage Ratio achieved was 1.5.