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Export Credits

Volume 941: debated on Monday 12 December 1977

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25.

asked the Secretary of State for Trade how many times to date he has invoked his powers under Section 2 of the Export Credit Guarantees Act to withhold export credits.

These powers are frequently invoked. The day-to-day administration of Section 2 of the Act entails frequent judgment on whether or not in the national interest export credits shall be made available for particular contracts or particular markets, in the circumstances where such business is not considered suitable for cover on a commercial basis under Section 1.

As the right hon. Gentleman admits that the reason for refusing credits is that cover is not considered suitable for the creditworthiness of countries to which exports might be sent, what powers does he believe he uses when he refuses them for reasons of enforcing incomes policy? Should he not ask the House to legislate if he wishes to take powers of that sort, rather than misuse the powers given to him?

I am advised that under Section 2 I have powers to make a judgment in the national interest involving a variety of considerations, including the consideration of pay settlements.

Does the credit to be granted under the Anglo-Polish shipping deal come under Section 1 or Section 2? Is it within the prudential limits laid down for Section 1 or Section 2 or not?

I believe that it is under Section 1, but if I am wrong I shall tell the hon. Gentleman. It is certainly within our judgment of the prudential limits and, I repeat, it is within the OECD understanding.

Has the right hon. Gentleman any evidence that firms that are refused export credits have done any worse in consequence?

It is, of course, open to any firm that is refused a guarantee by ECGD to look elsewhere in the market to secure it. It may be that firms will discover that there are other opportunities.