asked the Secretary of State for Trade if he will discuss with the Export Credits Guarantee Department the possibility of providing cost escalation insurance for export contracts secured by British firms producing large scale industrial equipment.
This matter is already under discussion following representations from industry.
I am grateful to my hon. Friend for that reply. Is he aware that this industry is involved in multimillion pound contracts which by their nature cannot be fulfilled in less than a period of years, and that the lack of an insurance against cost escalation is causing the industry difficulties vis-à-vis its competitors in France and Italy which are operating such schemes?
I am well aware of the difficulties facing a number of British exporters because of the problem of inflation, but we could not provide for such a scheme on an insurance basis. It is also important not to take any action which would discourage our exporters from resisting inflation and, indeed, discourage the acceptance by overseas buyers of reasonable price increases. These are all factors which we must take into account.