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Political Risk Insurance

Volume 201: debated on Wednesday 15 January 1992

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9.

To ask the Secretary of State for Trade and Industry what steps he intends to take to ensure that British firms are able to obtain political risk insurance with speed and on terms that enable them to compete on equal terms with their international competitors.

The Government have already ensured that competitive political insurance can be provided by the private market, supported where necessary by Export Credits Guarantee Department reinsurance facilities.

Can the Minister tell us how the Government are ensuring the speedy response necessitated by changing circumstances in other parts of the world, particularly areas with which Britain had close links in the past? I am thinking of the current situation in Somalia and of events in eastern Europe. How is the Minister making sure that in the new situation that the Government have created they are able to respond quickly and effectively? Other countries seem to do better.

I take it that the hon. Gentleman is referring to reinsurance provided by the private sector through the recently privatised insurance services group, which was formerly in ECGD but is now in NCM Credit Insurance Ltd. As the hon. Gentleman knows, we have put in place arrangements under which, in the very few markets that the private sector does not accept, reinsurance can be provided through ECGD. There are 200 countries in which the private sector is providing the necessary reinsurance.

Is not it a fact that the principal political risk against which British industry needs insurance is the risk of a Labour Government? In the event of the Labour party coming to power British industry would be overtaxed, over-inflated, over-regulated and overburdened with additional costs such as the minimum wage.

My hon. Friend makes his point very effectively. There is a growing awareness of the disadvantages to employment and industry that a return to the discredited and failed policies of the Labour party would create.