Orders of the Day — Export and Investment Guarantees Bill

Part of the debate – in the House of Commons at 7:30 pm on 22 January 1991.

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Photo of Jim Cousins Jim Cousins , Newcastle upon Tyne Central 7:30, 22 January 1991

I shall be brief; if that gives a flicker of anxiety to some, it will bring relief and rejoicing to many more.

I wish to follow the point that was made by the hon. Member for Leeds, North-West (Dr. Hampson), who is no longer present, in his plea for a long-term industrial strategy. Although his hopes are high, his prospects are rather limited. This matter has gone on for far too long. The Kemp report, which has been referred to almost ad nauseam, was issued at the end of a period of uncertainty about the Government's intentions for the Export Credits Guarantee Department.

The Kemp committee sat for a long time and thought carefully. Anyone who has had a quiet word with those who prepared the Kemp report will realise that their purpose was to come up with as low an order of madness as they could get away with to prevent the Government from coming up with as high an order of political madness as they could get away with if left to their own devices. That is not a satisfactory basis for the report.

After the report's proposals became known, there was a further period of uncertainty as we waited for the Government to clarify where they stood. As my hon. Friend the Member for Gateshead, East (Ms. Quin) properly and accurately said, there was a clear conflict of interest between the Department of Trade and Industry and the Treasury.

That period of uncertainty gave rise to additional difficulties. For example, in an attempt to structure or influence the Government's proposals, the ECGD began to modify its behaviour. It would be interesting to know from how many countries the offer of export credit guarantee help was withdrawn during that period of internal debate on how to respond to the Kemp report. I fear that, during that period, a massive effort was made to contain current expenditure—the source of the Government's concern—to satisfy the Treasury. That process has already damaged the prospects of British exporters, in some cases irreversibly.

It is interesting to note that the proposals of the Kemp report—to privatise the short-term services division of the ECGD as a state-owned holding company—were taken up by the Government of France, who operate their export credit guarantee assistance through a state-owned holding company. It is instructive that, for the purposes of joint marketing, that state-owned holding company has linked with French domestic credit insurance companies. Inspired and encouraged by the French Government, it is setting up export promotion agencies throughout eastern Europe to ensure a substantial place in those markets for French exporters.

That shows how those structures can be used to promote exports and an industrial strategy. It is terribly disappointing that in all the hints, guesses and statements of the Government, there has been no sign not only of any proposals but of any suggestion that such matters were a matter of concern or interest. That must be profoundly depressing for many exporters who, in increasingly difficult economic circumstances, are attempting to serve this country by broadening the base of our exports.

That uncertainty affects not only the past but the future, because, although we are aware of the structure and form of the Government's proposals, we are still uncertain about their content. For example, we have no clear idea of how they will attempt to ensure that the spread of risks covered by the ECGD will be reflected in the new arrangements made for the state agency.