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Export Promotion

Volume 981: debated on Wednesday 19 March 1980

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asked the Chancellor of the Exchequer (1) how the coverage of the figures given in his reply dated 25 February 1980 compares with the coverage of the programmes analysis review of the export services; what was the total expenditure of the services covered by that review; what is the increase in inflation since those figures were collected; and how these figures compare with the present expenditure;(2) pursuant to his reply of 25 February to the hon. Member for Grimsby on the cost of export services, why the Foreign and Commonwealth Office, the Central Office of Information and other agencies concerned with the promotion of exports were not included in the figures;(3) whether he has made any estimate of the reduction in United Kingdom exports which would occur if the export services, other than those provided by or through the Export Credit Guarantee Department were to be abolished; if so, what is his conclusion; and by how much the exchange rate would fall as a result, all other things being equal;(4) whether his reply dated 25 February concerning expenditure on export promotion included the British Overseas Trade Board and the overhead expenses of the Department of Trade in maintaining export services;(5) what would be the saving in manpower and in total expenditure in (

a) the Foreign and Commonwealth Office, ( b) Departments other than the Foreign and Commonwealth Office, the Central Office of Information and the Department of Trade and ( c) other agencies if promotion of exports ceased.

The figures given in my reply of 25 February related to expenditure under those public expenditure programmes devoted entirely to the support of exports. Total expenditure on export services in 1979–80, including both staff and direct costs in all departments except for the Ministry of Defence, is roughly estimated at about £84 million net of charges. This includes the Department of Trade's direct expenditure on export promotion given in my previous reply but not expenditure by the Export Credits Guarantee Department. Some of this expenditure relates to payments made overseas, but it is not possible to identify readily the savings in foreign exchange which could be achieved if expenditure on export promotion ceased.The figures given in my reply of 25 February are not directly comparable with the 1971 programme analysis review. Broadly speaking, this covered staff and direct costs in all Departments and should therefore be compared with the estimated expenditure of £84 million in 1979–80 given above. The coverage of the 1979–80 estimate is wider than the 1971 review in that it also covers export activities of the Department of Energy and the Ministry of Agriculture, Fisheries and Food.Total expenditure covered by the review in 1971–72 was £28·5 million net of charges. The general level of prices in 1979–80 as measured by the retal prices index is just under three times higher than the level in 1971–72. On this basis the level of expenditure in 1971–72 was broadly comparable in real terms to expenditure on export services in 1979–80.The figure for export promotion given in my reply of 25 February covered expenditure by the British Overseas Trade Board. This did not include staff and other overheads of the Department of Trade in maintaining export services which are estimated this year to be in the region of £16·8 million.It is estimated that in 1979–80 roughly some 15 per cent. of Foreign and Commonwealth Office Diplomatic Service United Kingdom based staff overseas and 15 per cent. of locally engaged staff are involved in export promotion work at a total cost of around £33 million. However, it is not possible to identify the precise savings in manpower or expenditure which would result in this Department if expenditure on export promotion ceased, since many of the staff concerned have other duties.It is not possible to quantify the manpower savings in Departments other than the Foreign and Commonwealth Office, the Central Office of Information and the Department of Trade if expenditure on the promotion of exports ceased. Any savings would be negligible. Total expenditure on export promotion in these departments in 1979–80 is estimated in the region of £1·3 million.Similarly the possible manpower savings in other agencies cannot be estimated. Total expenditure on export services in other agencies amounts to about £3·1 million in 1979–80.As indicated in my reply of 25 February, it is not possible to quantify the effect on exports of ending public expenditure on export promotion.