Industry and Exports (Financial Support) Bill

I can indeed assure the Committee that there is nothing in clause 2 that dilutes the high environmental standards or the policies against bribery and corruption that are adopted by the Government. Let me respond to the debate by saying some words about the reason for clause 2. I apologise if I go slightly broader than amendment 1, but other hon. Members have done so, and it seems appropriate for me to do so, too. The hon. Member for Hertford and Stortford (Mr. Prisk) rightly raised the issue of the problem of using the word "facilitating" when it comes to the supplies of goods or services. That has created difficulties for British exporters since the Export Credits Guarantee Department cannot facilitate exports if they have already been supplied. As the hon. Gentleman rightly pointed out and as I did on Second Reading, there are two main reasons why the problems occurred and why this amendment to the ECGD's current powers was proposed. The first reason is the way in which the high-value capital goods market now works, which often means that requests for ECGD support are made later in the process of export. Buyers or overseas project sponsors rather than the exporters often approach the ECGD for support and buyers seek support only after the exports have been procured and some of the relevant goods or services have been supplied. In many cases with these products, a process of supply takes place. Secondly, the ECGD's decision-making processes have evolved in recent years to implement wider Government policy on corruption and on environmental and social impacts. I think that all Members will very much welcome that fact. These are directed by the ECGD's business principles and involve rigorous due diligence. Of course, that can take time and can delay the ECGD's ability to make a decision until the supply has been completed. The amendment would allow the ECGD to support exports that have already been made by the time the ECGD has completed its due diligence, but I want to assure this Committee of the whole House that clause 2 does not in any way detract from the rigorous standards that we want to apply to any export that the ECGD is considering exporting. Amendment 1 concerns the application of the ECGD's environmental policies, I re-emphasise the fact that the clause does not alter the ECGD's business principles or the triggers for their application to cases. If there were to be a change to the ECGD's practices in that regard, ECGD's business principles themselves state that the ECGD will consult. I also report to the Committee that, as my noble Friend Lord Mandelson announced yesterday in the White Paper "New Industry, New Jobs", the ECGD will in the weeks ahead consult on ways of further supporting levels of credit for UK exporters. The Government will ensure that the support offered by the ECGD plays a significant role in supporting UK exporters when demand picks up. It is right to consider at this time a wider role for the ECGD in providing support, but we will consult on that. I invite the Committee to reject the amendment proposed by the hon. Member for Solihull (Lorely Burt) for three reasons. I do not believe that it is necessary, appropriate or workable, so let me try to explain why. The amendment is based on the assumption that clause 2 will somehow weaken the ECGD's application of its business principles. As I have been at pains to make out, that is not the case. The assumption is mistaken. Clause 2 allows the ECGD to provide support for British supplies that have been made by the time assessments have been completed. It makes no change whatever to the business principles. The only difference is that the circumstances in which the ECGD may consider giving support have been extended to include supplies already being made. It is thus the Government's strongly held view that the amendment is simply unnecessary. I believe that the amendment is also loosely drafted. It is not clear whether the requirement to carry out a case impact assessment is intended to apply to all exports supported by the ECGD or just to a sub-set of them, such as exports completed before it makes the decision to provide support or exports completed before the Bill comes into force and before the ECGD makes the decision to provide support. One interpretation of the amendment might be that a case impact assessment is required only in relation to exports completed prior to the Bill's coming into force and/or to exports completed prior to the ECGD making a decision to provide support. It seems odd to require a case impact assessment for a sub-set of the ECGD's business only. The amendment could also be interpreted more widely to apply to all exports supported by the ECGD. A statutory obligation would be imposed on the ECGD to conduct a case impact assessment before entering into any arrangements in connection with exports under section 1 of the ECGD's governing Act. That would represent a change in the ECGD's policy in a way that is not within the scope of the Bill, and it would not be appropriate to change the ECGD's environmental policy by statute. I assume—although it is not made clear—that the amendment is intended to enshrine in statute the ECGD's case impact assessment as it exists today, and to give statutory force to the assessment. I believe that that would be largely unworkable. The ECGD's application of its business principles, including those that govern when a case impact assessment must be carried out, is a matter of publicly stated policy. Maintaining the business principles as a policy allows them to be adapted to take account of changes in international standards: for example, to reflect new recommendations and common approaches issued by the Organisation for Economic Co-operation and Development on bribery and corruption, sustainable development or the environment. If the business principles or any aspect of them were enshrined in statute, it would be much more difficult for the ECGD to comply with its international undertakings, as primary legislation would be required on each occasion to allow it to adapt the relevant business principles to reflect changes in international agreements. Similarly, primary legislation would be required for any increase in the rigour of the business principles, and I do not think that some of the groups mentioned by the hon. Lady would want that to happen. We want the ECGD to maintain high standards, but I do not think that enshrining the business principles in statutory legislation and having to pass primary legislation every time we wanted to change them represents a good use of parliamentary time. Given that—as Members will know—the OECD is currently discussing changes in some of these areas, I do not think that that would be workable in practice. My main point, however, it that the amendment is unnecessary. I can give the hon. Lady the assurance that she seeks: no watering down is taking place. The ECGD's business principles will continue to apply—on bribery and corruption, sustainable development and the environment—and the ECGD will continue to apply them as rigorously as it does today. I hope that, given those assurances, she will seek leave to withdraw her amendment.