Orders of the Day — Export and Investment Guarantees Bill

Part of the debate – in the House of Commons at 5:37 pm on 22nd January 1991.

Alert me about debates like this

Photo of Mr Doug Hoyle Mr Doug Hoyle , Warrington North 5:37 pm, 22nd January 1991

We are talking about the insurance services market. What is being taken away is the public-sector element, which operates in an area into which the private sector is not prepared to go. That is the danger. In the letter that the hon. Member for Leeds, North-West (Dr. Hampson) and I wrote to The Times, we said that we hoped that, if this arrangement should go through, the Government would look at companies placed in this position and decide not to withdraw completely. I understood from the Minister's introductory speech—perhaps we will hear more in the reply to the debate—that it was accepted that there would still be a need for public-sector involvement in part of the market. I think that that is the point that was being made by the hon. Member for Lancashire, West (Mr. Hind).

Another difficulty will arise with the advent of the single market in 1992. Nothing in the legislation relating to the single market makes it necessary for the Government to take this step. We have heard that the only other Government contemplating such a course of action is the Danish Government. Certainly there is no sign of it in the case of our competitors in the European Community. I say again that, in this regard, there is no need for the Government to be a pathfinder.

At one time, I thought that the whole operation of the ECGD would be destroyed. I am very pleased that the judgment of the Kemp report—that there is no alternative to a Government scheme if our exports are to remain competitive—has been accepted. Privatisation of the insurance group will secure the short-term credit proposals. However, this change is unnecessary and unwanted, and it will not reassure industry. The danger is that it could do great harm to British exports.

As my hon. Friend the Member for Gateshead, East (Ms. Quin) said, we are facing not only the single European market in 1992, which will bring with it more competition, but the collapse of the Soviet bloc and the eastern economy. There are more opportunities, but they will bring with them new uncertainties and risks. We should be encouraging companies to break into these new markets. They will deal with new ventures and new trading records and may be facing an uncertain future. They will have little market expertise, no credit history and therefore no credit rating. I am sorry to say that they will have to do all this against a background of continuing political uncertainty. If we are asking small and medium firms to enter that difficult market, it is incumbent on us to give them every possible support. Because the Bill will not do that, it is wrong to introduce it at this time.

The Gulf crisis proves that the risks for exporters have never been greater. Along with that risk, there are opportunities for exporters, and we are asking only for some help for them. Why should we tell them that they can go into the markets, but must do so with one hand lied behind their backs? We must ask why the Government have, against the advice in the Kemp report and against the lack of demand from exporters who said that they were satisfied with the ECGD, introduced the Bill at this difficult time. We heard no good reason from the Minister for Trade, so we do not know why the Government intend to place a further burden on the back of British industry, which is already reeling because of the difficult recession.

It has been suggested that the Bill has been introduced so as to bring us into line with EC policy, but that is not necessary. We see the difficulties for people entering the private sector underwriting business. There is no need for the Bill, and the exporters have not demanded it. The real reason for it is the Government's ideological and political prejudice. Once more, dogma is taking over from common sense. The Government have a hatred of everything that is in the public sector. They have to go for privatisation, whether or not it is better.

The Government should think again before inflicting this blow on British industry. The Minister for Trade is no longer here, so I ask the Under-Secretary not to stay within the Department and just have dinner with his colleagues. He should go out into the real world and see the difficulties that these companies are facing. He should seek their advice instead of doing what he thinks is best, because the Government think that everything must be privatised. If the Under-Secretary did that, he would come back with different opinions, and opinions different from those expressed by the Minister for Trade. The Prime Minister may have changed, but Government policy has not.

The Minister said the staff at Cardiff would be transferred to the private sector. What happens to the staff who do not want to be transferred? Will they be allowed to remain in Government service? Will they have a career? Will they be able to use their expertise? It is essential that we get some replies to those questions, because these people have done a first-class job, as British industry and exporters have recognised. Anyone who cares about British companies and British exports should reject the Bill. I hope that the House decides to do just that.