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Aid And Trade Contingency Provision

Volume 84: debated on Wednesday 23 October 1985

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asked the Secretary of State for Trade and Industry if he is satisfied with the operation of the aid and trade contingency provision; and if he will make a statement.

Since 1978, exports totalling £1·7 billion have been secured with £350 million from the aid and trade provision. With this support, 96 projects have been won in 37 countries. I am confident that ATP will continue to be a very effective instrument.

I am grateful to my right hon. and learned Friend for that answer, which demonstrates how well he has done. Does he realise how seriously concerned major British exporters are that their Japanese counterparts have an ATP fund that is 40 times as great? They will feel at a distinct competitive disadvantage for as long as this continues. despite the excellence of their products. Does he agree that, first, we must deal toughly with the Japanese on what amounts to a grotesquely unfair trading practice? We must speed up our procedures for the approval of the ATP budget so that industry can take quick decisions. If possible, we should increase the budget. We should certainly set aside a special budget for China, without reducing the existing budget.

I agree with my hon. Friend about the need to take action against unfair practices. My hon. Friend will be aware that we have announced that in principle the aid and trade provision could be used to enable long-term low interest loans, similar to those that are offered by our competitors, to be made available in appropriate cases. It is in that context that officials have been visiting Beijing to consider a possible facility there. The total size of the ATP provision is being considered in the context of current public expenditure discussions, and I cannot anticipate their outcome.

Is not the point that the Japanese offer massively better facilities than are offered by the British Government, in that to date the British Government have been halfhearted about that kind of assistance for industry here? Has the time not come when we ought to have a genuinely rolling ATP programme so that the timing of a project is not the factor that means that the project fails to receive the go-ahead?

Certainly, I agree that we need one that is flexible and can accommodate the commercial realities of the situation. It is true that the use of mixed credits has grown. Notifications to OECD rose by 50 per cent. in 1984. I do not think that a general competitive increase in provisions of this kind is necessarily in the best interests of this country, because if it goes on we may be outbid. It is, therefore, in our interests to use our international influence to discourage practices of this kind. For the moment there is no doubt at all that we must adopt a flexible approach. It is for just that reason that we shall be introducing the soft loan facility of the kind called for by industry, which will help us make the best possible provision.

I was very happy to hear my right hon. and learned Friend's last statement. Is he aware that, in the experience of most exporters, including the largest in Lincoln, the flexible use of soft loans is one of the best weapons in securing large overseas contracts, rather than our previous excessive reliance on direct grants?

Both will be needed. Different mechanisms will be appropriate for different projects. We are, however, persuaded of the need for soft loans and it is for exactly that reason that I hope, in the not too distant future, to announce the details of the scheme on which we have been working.