Needham signals U-turn on export guarantees: British companies will not be held back by lack of cover, pledges trade minister

Click to follow
The Independent Online
RICHARD NEEDHAM, the minister for trade, yesterday indicated that the Government is becoming increasingly interventionist in its support for industry.

After the Budget revelation that Export Credits Guarantee Department premiums were being cut and cover extended, he emphasised the completion of a U-turn on ECGD policy by saying that in future companies would never be constrained by a lack of cover.

ECGD terms would now be driven by the need to maintain the UK's share of capital goods sales to non- OECD countries. This should mean they would double in value to pounds 20bn during the decade, he said.

The former policy imposed by the Treasury of insisting that ECGD avoid concentrating exposure in certain markets has been replaced by one that specifically encourages targeting, even though this increases the insurance risk.

In another reversal of policy, Mr Needham said the DTI intended to become much more active in its support for capital goods exporters by setting up industry groups to co-ordinate the winning of contracts.

'We haven't worked as a team in the same way as our competitors,' he said. British companies would be stopped from bidding against each other and a national champion would be given the support it needed.

The minister said the change in direction was needed because the UK's share of capital goods trade had been falling. Companies claim this is because of inadequate Government support, particularly from ECGD.

View from City Road, page 30