The "slow death" of export support

Digby Jones is to launch a hard-hitting attack on the Government, accusing it of "letting down" struggling manufacturers

CBI leader by raising the spectre of cuts in export support. Mark Fletcher reports. Speaking tonight (Thursday) in Bristol to some 500 business leaders, he will issue a stark warning that the Export Credits Guarantee Department (ECGD) is being subjected to "a slow death". The ECGD provides vital support to British business by underwriting exports to and investments in often uncertain overseas markets. But the Department is facing its sixth review in as many years, re-igniting fears of a long-term government plan to curtail its operations. Jones' comments herald the start of a new CBI lobbying drive to get ministers to end the uncertainty. Last year the government gave an initial pledge to keep the ECGD, but it has since announced another review and delayed changes to funding arrangements. Jones will say: "At a time of international uncertainty I fail to understand why the future of export support is again hanging in the balance. Surely the government should be anxious to help our global champion businesses win vital orders in the face of opposition from France and Germany. They say they want to help but, as always, we must watch what politicians do, not what they say. "We are told that the government is not going to scrap the Department, but it is slowly withering on the vine. Business wants the government to build quality services, not pay lip service to a weakened organisation that is there just to keep up appearances. Excessive dithering only adds to fears that the government does not understand how business works. Companies are saying that UK export credit support is inferior to that of our rivals, making it unreasonable to expect them to source international business from the UK." Jones will stress that the ECGD is too often seen as an issue for large firms only. He will point out that thousands of small firms gain from the knock on benefits of larger firms enjoying successful trade and investment overseas. "ECGD assistance has a cascade effect on firms throughout the UK economy. Many small businesses remain dependent on larger, prime contractors for their route to market. They will lose out if major companies cannot source exports and investments from the UK." Jones will say the government's indecision comes at "a terrible moment" for the manufacturing sector. Some 42,000 UK job losses are expected in the first quarter of this year and investment is now as low as it was in the mid-1980s. He will add: "We simply want ministers to give us the support that our competitors are getting and do it swiftly. We are happy to assist by helping to find ways of making the Department more efficient. But the objective must be to give UK business the help enjoyed by firms in countries like Germany, France and Amercia. The ECGD will be judged on that." In 2001 the ECGD issued guarantees and policies for UK exporters and investors totalling £5.6 billion. Beneficiaries included aviation, construction and engineering, plus suppliers of all sizes. In the civil aircraft industry alone, the ECGD helped sustain 60,000 supply chain jobs. In addition, the agency made a net contribution to the Treasury of £205 million. It also aided economic recovery in developing countries by supporting foreign direct investment and sustainable development projects. Reporting on the ECGD in 2000, the Department of Trade and Industry acknowledged the agency's contribution in "bringing benefits to the UK through its support of UK exporters and investors in overseas markets". MF