In the Budget, the Chancellor announced a £5 billion trade credit insurance scheme to support businesses that have suffered reductions in their level of cover. From
I congratulate the Minister on taking that initiative, which has been warmly appreciated by several businesses in my constituency. However, will my hon. Friend clarify whether the scheme applies only to the UK? If so, are there plans to extend it to overseas suppliers and customers?
I can confirm to my hon. Friend that the scheme applies only to the United Kingdom, but he will be aware that we are considering a proposal for confirming letters of credit, and we intend the Export Credits Guarantee Department to operate it. The ECGD will consult on the proposal shortly. The plight of UK exporters must be addressed, and that is why we are considering that proposal along with other measures that might be implemented to help our exporters. However, I should point out that we have a very competitive exchange rate, some very efficient UK businesses and some opportunities to take advantage of.
Back in mid-November, I questioned the Prime Minister about the need for this kind of scheme. He gave me a typically long, convoluted and laborious answer, implying that the issue was already being addressed. Imagine my surprise when I discovered that the scheme came in only last Friday; five and a half months have been lost.
I would like to think that the hon. Gentleman would welcome the trade credit insurance scheme, which has been welcomed by a wide variety of business organisations. It will now provide support that, as I said, will be backdated to
I welcome and acknowledge the help that the scheme is giving UK businesses. However, I want to reinforce the message that has come from other Members about the difficulties faced by exporters. Although I welcome the Government's consultation, may I urge the Minister to carry it out quickly and act as soon as possible, before some companies go to the wall?
My hon. Friend comes from the same neck of the woods as I do, and I am very aware of businesses in the black country that are exporting and have found life difficult because of tightening credit conditions. I am keen that we should move on with the proposal on confirmation of letters of credit—consult on it and get it implemented as quickly as possible. The business community has asked for the scheme and it will be of benefit. Obviously, however, there will be a consultation and we want to hear the responses to it.
As a fellow west midlands MP, the Minister will be only too well aware of the importance of Jaguar Land Rover to the west midlands economy. The company employs more than 14,000 people directly and many more indirectly, and it anchors the automotive engineering business in the region. The Minister must therefore understand the huge concern about yesterday's BBC reports that talks between the Government and Tata, the owner of Jaguar Land Rover, are breaking down. I would be grateful for any update from the Minister that I might relay to my constituents who work at the company.
As the hon. Lady will be aware, Tata has denied those reports. Discussions are ongoing. The Government regard JLR as a viable company with good long-term prospects. We want to see the company through difficult trading times and to provide it and its employees with stability. That is why we have been having confidential discussions with JLR and its parent company about both the short-term and long-term financing in its business plans. Those negotiations are ongoing.
It is important that those discussions should be handled professionally and face to face, rather than through the media; handling them through the media is not helpful to the company. We have not yet had any response to the proposal that we put to JLR last Friday, but obviously we would welcome one and we continue to have discussions with the company.
One of the problems is how few trade credit insurance firms there are. We all have examples of how difficult it is for a company that has lost its trade credit insurance to find another trade credit insurance firm to take it on. Given all the current problems, will the Minister give me an assurance that there will be an investigation into the structure of the industry to make sure that there is enough variety of providers and that businesses can get insurance so that they can trade properly?
As my hon. Friend is aware, the trade credit insurance market is dominated by three firms—Euler Hermes, Coface and Atradius. The ECGD used to provide short-term credit insurance, but it has not done so for a number of years since it privatised that operation out to Atradius. He is right to point out that many companies rely on trade credit insurance. Our figures suggest that about 14,000 out of 250,000 companies have trade credit insurance, so it is a significant market, and we need to keep under review whether it is functioning efficiently. We have to consider whether there is more that we can be doing sensibly, as a Government, to help our businesses through these difficult times. What we have here is a Government who are actively looking at providing support—real help to business now rather than a party that wants to do nothing.