Industry and Exports (Financial Support) Bill

I beg to move, That the Bill be now read the Third time. This is a small Bill with just three clauses, but as the House agreed when we considered it at an earlier stage, it is vital that we continue to help businesses as much as we can in these exceptional economic times. The Bill proposes two amendments to the Industrial Development and the Export and Investment Guarantees Acts. The first clause is essential to enable the section 8 power of the Industrial Development Act 1982 to continue to be used to give financial assistance to industry for the purposes specified in that Act. That is necessary to continue to strengthen the provision of support for businesses so that they can come through the global economic downturn stronger. As has previously been explained, the Bill seeks to amend the cumulative limit on financial assistance that may be provided under section 8 to an initial ceiling of £12 billion increasable by four orders of £1 billion each to an overall limit of £16 billion. We have previously discussed this measure, and I think there is widespread support for it. The new forms of support that the Government have been seeking to provide for industry have principally been loan guarantees or loans, and I think there has been acceptance on both sides of the House that that is an appropriate policy intervention. That is why we propose today to increase the limits. Let me offer the example of the enterprise finance guarantee scheme, which has been providing real help to viable businesses. Since the launch of the scheme in January, almost £270 million-worth of eligible applications have been granted or processed or assessed from more than 2,300 firms. On 31 March, we announced the solutions for business portfolio, which makes it simpler for businesses to access the support they need. For the first time, all Government help for business, including section 8 support schemes, now share an easy, identifiable banner and can be accessed through Business Link. That has been welcomed by a wide range of business organisations, including the British Chambers of Commerce and the CBI, but without the introduction of the new limits, the legislative basis for those proposals under section 8 would be exceeded on reaching the limit of £6.1 billion allowed by the Industrial Development (Financial Assistance) Act 2003. We therefore need the new powers to ensure that viable businesses continue to receive the support they need. Clause 2 has also been welcomed by the CBI, and I hope that environmental groups and groups that are active in the field of ensuring that the UK has high standards in combating bribery and corruption understand the points I was making in response to the amendment tabled by the hon. Member for Solihull (Lorely Burt) about the Government intending to continue to maintain high standards and their business principles when looking at large capital goods exports. The Export and Investment Guarantees Act 1991 governs the work of the Export Credit Guarantee Department, a Government Department that reports to the Secretary of State. As I have said, we have had difficulties with the facilitating of supplies and clause 2 seeks to address that. The high value capital goods market works very differently now than it did a number of years ago, and the measure essentially clarifies and legitimises ECGD support, rather than in anyway diluting the standards that would apply when assessing individual applications for high capital goods; I am happy to confirm that. If that amendment were not made, British exporters would continue to risk discrimination from overseas project sponsors, because ECGD would not be able to give the type of support that sponsors want. Other export credit agencies in competitor nations are not restricted in the same way in supporting exports that have already taken place, and without this change ECGD support would be reduced as a result of the increasing number of applications that are made to it at too late a stage in the project for its support to be given. That, of course, would be the position in any circumstances, but in the current economic circumstances support for British exports is particularly important. Over recent months, interest in ECDG support and applications for its assistance have, unsurprisingly, increased significantly. The export industry has made it clear that it feels that the problems that we are addressing through clause 2 are serious for it, which is why it has welcomed the amendment. As I have made clear, the special interest groups that are concerned about this amendment can be reassured by the fact that the criteria applied to projects where the export has been completed will not be altered or made less stringent. The business principles, be they relating to the environment or to bribery and corruption, are not weakened as a result of the amendment—indeed, it meets a recommendation of the Environmental Audit Committee that would, in the EAC's view, strengthen the ECDG's environmental scrutiny. A report on the ECDG and sustainable development that the Committee published last year recommended the following:""No offer of support should be made, whether actual or provisional, until ECDG's Business Principles Unit has completed its assessment"" of the project to which the exports are destined. Although I do not agree that the ECDG's environmental scrutiny might be compromised by provisional offers of support, the Bill allows the ECGD to implement the EAC's recommendation. Its environmental scrutiny can now be completed, and a final offer of support made thereafter, without regard to the timing of the delivery of the export. We face a unique set of economic challenges. I am pleased that hon. Members from all parts have recognised the need for these additional powers and have been supportive of the main aims of the Bill, and I am grateful for the constructive approach that Opposition Members have taken. This Bill may not have had a lengthy passage—it has indeed been a short one—but there has been a proper opportunity for scrutiny on Second Reading and in Committee. These important measures will help to deliver the real assistance and support that business needs at these difficult times, and I commend the Bill to the House.