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Export Credits Guarantee Department

Volume 167: debated on Wednesday 14 February 1990

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9.

To ask the Secretary of State for Trade and Industry when he expects to introduce his proposals to reform the structure of the Export Credits Guarantee Department.

It is the Government's intention to introduce legislation at the earliest opportunity to bring about the changes to ECGD's structure that I announced on 18 December 1989. The aim is to establish the new company to be created from ECGD's insurance services group on 1 April 1991.

I thank my right hon. Friend for that information. I agree that the insurance part of the Export Credits Guarantee Department should be privatised, but can he assure the House that the credit on capital goods will be maintained and that it will be possible for companies such as British Aerospace, which exports £150 million worth of goods per week or £6,000 million worth per year, to maintain their 10-year view on exports?

Yes, I made it clear in December that the projects group would not be part of the privatisation but will continue its activities to aid British exports of the kind that my hon. Friend mentioned, including exports by British Aerospace.

Will the Secretary of State confirm that the insurance services group, which is based in Cardiff and employs many of my constituents, is profitable, that its achievements are a credit to the public sector, and that it has no requirement to be privatised? Can he also confirm that Malcolm Stephens, chief executive of the ECGD, recently made a statement that privatisation of the insurance services group would pave the way for foreign stakes to be taken in the ECGD?

Does not the Secretary of State conclude that it would be a ludicrous irony if in a few years' time a support service for British exports were controlled by a foreign bank or finance house?

I confirm that the Cardiff operation is profitable and held in high respect by its customers. I also confirm that the hon. Gentleman got it totally wrong when quoting the chief executive of the ECGD. I have here statements that he made on radio referring to

"the Chief Executive in a press conference alongside Nicholas Ridley".
I remember no such press conference. [Interruption.]

The hon. Gentleman is advocating an illegal action if he is asking me to say that no national other than a British national may acquire a stake in companies in this country. He must recognise that we are members of a European Community which bans discrimination against its other members. The hon. Gentleman should wait and see who puts forward offers when the time comes to privatise the ECGD. If it is not privatised, it will have no future in the European market.

Can my right hon. Friend confirm that export credits as they will be operated once reformed will make trade with eastern Europe more viable and possible as a reward for the desires and the declarations about human rights and democracy that have been expressed there? If that is so, can he explain the difference, as seen by the Opposition, between that and our similar programme with South Africa?

The subject of ECGD cover for eastern European states also raises the question of their indebtedness and the risk that it poses for insurance cover. Different countries in eastern Europe have different debt situations, so I cannot answer the question in a general way, but I confirm that we are doing our best to make credit cover available for exports to eastern Europe when the country concerned merits the credit.