Export credit hopes raised

  • @indyvoices
INDUSTRY'S hopes of a further big boost to export credit cover have been substantially improved by a ministerial promise to build on the pounds 700m increase announced in last month's Autumn Statement.

Richard Needham, Trade Minister, is committed to fighting for a steady increase in state export credit guarantees as part of a drive to halt the decline in Britain's share of trade in capital goods to developing countries.

Mr Needham's stand could signal what amounts to a significant U-turn in policy on providing funds to underwrite 'soft credit' for exports to some of the biggest developing markets.

The move has come despite Treasury hostility to large-scale expansion of export credit cover. Industrialists have long complained that cover is too limited and that premiums for export credit insurance are too high compared with those paid in competitor countries.

The pledge was given in an unnoticed section of a speech by Mr Needham to the Institute of Exports. He said: 'We have to ensure that we have adequate ECGD cover for exporters in our agreed priority markets and that out premium rates are not unfairly undercut by subsidies from our competitors.'

Mr Needham said that the Government would aim to 'halt the decline in our share of world trade in capital goods to non-OECD countries'.

He said that if forecasts of the growth of world trade were accurate, and Britain returned by the year 2000 to the 7 per cent share of capital goods it enjoyed in 1987, that would mean an increase in sales from pounds 8.9bn in 1990 to pounds 24bn by the end of the century.

Mr Needham was careful not to give projected figures, but the implication is that if the DTI gets its way in negotiations with the Treasury, there could be an increase of more than pounds 2bn in export credit cover between now and the end of the decade.

(Photograph omitted)