Rebalancing the Economy: Trade and Investment

Written evidence from the Department for Business, Innovation and Skills (UKTI and ECGD)

1 . Executive Summary

Steps to e ncourage exports and i nward i nvestment

T he Government appreciates th e key role that exports and investment will play in driving growth over the next few years . As outlined in section 5 of this evidence, actions are being taken to encourage exports and inward investment, recognising that they provide significant benefits to the UK economy through boosting productivity, innovation, R&D, and generating increased profit, sales and jobs .

UK Trade & Investment ( UKTI) helps UK-based companies to develop their capacity to trade and to maximise their international success. UKTI also helps bring high quality inward investment to the UK ’s economy, providing support and advice to investors at all stages of their business decision-making . The focus of UKTI’s support; the range and effectiveness of trade and inward investment services it offers; the overseas and UK networks it has established; and relationships with the Regional Development Agencies and Devolved Administrations, are detailed in section 5.1, along with an overview of UKTI’s effectiveness and efficiency.

The E xport C redits G uarantee D epartment (ECGD) provides assistance to industry in two main ways: first, by supporting loans to overseas buyers to purchase goods and services from UK exporters, and, second, through providing insurance directly to exporters and investors overseas against the risks of not being paid. ECGD principally supports exporters of capital goods and services and has a small customer base, although hundreds of companies, including SMEs, indirectly benefit from that support through the supply chains of these exporters.

The recent economic downturn has seen an increase in demand for ECGD support. ECGD’s response included introducing its first new product for many years. Its levels of new business have risen materially (more than 50%) over the last year; this looks set to continue. Although the business supported by ECGD represents less than 1% of UK exports, ECGD remains an important source of support for certain industrial sectors, such as civil aerospace and process engineering for the oil and gas sectors.

The Government is clear that exports and investment will be the key drivers of growth in the next few years, providing significant benefits to the UK economy through boosting productivity, innovation, R&D, and generating increased profit, sales and jobs .

UK Trade & Investment

UK Trade & Investment (UKTI) is the government organisation that helps UK-based companies succeed in the global economy, tailoring its services to the needs of individual businesses to help them maximise their international success. UKTI also helps bring high quality inward investment to the UK ’s economy, providing support and advice to investors at all stages of their business decision-making.

Current economic challenges mean that UK businesses must be flexible, innovative and able to seek out opportunities throughout the world. UKTI services help to position UK companies as the global trading partners of choice, promoting and building the UK ’s reputation, and working to attract high-value investment to the UK , with support focused on:

· strengthening the social networks (contacts, knowledge, advice, etc) that underpin international trade and investment flows, helping individual businesses to gain access to key contact networks by acting as a trusted intermediary;

· building and strengthening the capability of innovative and high growth businesses to maximise their chances of succeeding in international markets;

· providing access to information and advice the private sector alone would not or could not provide, both to inward investors and to potential UK exporters;

· building UK reputation as a backdrop for potential investors/overseas buyers; and

· facilitating co-operation among businesses, enabling them to work together to overcome barriers and develop international trade and investment opportunities.

Trade Services

UKTI trade services help companies from all sectors who can lead sustainable UK growth. Helping these companies to gain access to new business overseas enables them to generate additional revenues and to maximise the returns on their investment in R&D and innovation, thereby increasing resources available for them to invest in growth and innovation. Many customers also improve their products and services by gaining exposure to new contacts and new ideas.

UKTI offers a range of support services to UK companies, providing individually tailored packages of practical assistance to help them develop the capacity needed to trade internationally, including:

· Access to a local International Trade Advisor to help develop a plan of action;

· Specialist help with tackling cultural and language issues;

· Advice on how to go about market research; and

· Ongoing support to help businesses continue to develop their export potential and enter new and more sophisticated markets.

Once the initial research has been done, UKTI can assist new and experienced exporters with information, contacts, practical assistance, advice, mentoring and ongoing help before they go overseas and while they are there, including:

· Tailored information and advice about the market (normally a chargeable service) , which can include identification of relevant business contacts, and facilitation of introductions, for example through arranging meetings or networking opportunities on the client's behalf;

· Alerts to the latest business opportunities through its website.

· Support to participate in trade fairs overseas;

· Opportunities to participate in sector-based trade missions and seminars;

· Access to major buyers, governments and supply chains in overseas markets;

· Advice on forming international joint ventures and partnerships;

· Exploratory visits to new markets;

· Access to marketing toolkits and support on marketing overseas.

Independent evaluations of the effectiveness of trade services carried out for UKTI consistently find strong firm-level impacts and high benefit:cost ratios, demonstrating a very cost effective means of enabling UK exporters to exploit overseas markets and facilitating stronger growth. UKTI helped 23,600 UK businesses in 2009/10, with the latest independent surveys showing that:

· British companies attributed an additional £5bn to their bottom line profits as a result of working with UKTI, up from £3.6bn the previous year, representing £19 benefit for each £1 spent on UKTI trade services, up from £16:£1 the previous year.

· The £5bn additional profit reported by UKTI clients represents over £35bn additional UK exports generated as a direct result of the support UKTI provided.

· 41% of UK companies reported new or safeguarded jobs as a result of using UKTI trade services, with 23% reporting the former.

· 67% of UKTI customers reported significant business benefit from upgrading their approach to overseas markets, gaining access to contacts and information not otherwise accessible, and overcoming legal or regulatory difficulties or cultural differences affecting access to opportunities overseas.

· 39% of UKTI clients expect substantial growth over the next 5 years compared with 23% of other UK exporters. Some 87% of UKTI trade clients expect at least moderate growth, as compared with 78% non-user exporters. UKTI users are also more likely to have grown substantially over the previous 5 years.

· On average, UKTI trade support generates an additional £65k of R&D per trade client. This reflects the important role trade support plays in increasing UK innovation capability and R&D;

· Some 53 % of all businesses assisted through UKTI trade services, to the end FY 2009/10, improved their business performance as a direct result of UKTI support.

· UKTI helped 23,600 UK businesses during 2009/10, up from 20,700 the previous year. Combined with the increasing average impact, this reflects a real rise in productivity.

· 60% of UKTI users, and 40 % of non-user exporters expect to be selling to a larger number of markets within 3 years. 66% of UKTI trade clients, and only 43% of non-user exporters, expect to increase the export proportion of their turnover over this period.

· Users are much more likely to be in high growth markets (61% vs. 44%), and also to be giving these markets more attention in response to the downturn (33% vs. 23%);

· UKTI users are more likely to plan to increase exports in response to the Sterling depreciation (47% vs. 37%), and more likely to have benefited from the depreciation overall (33% vs. 25%);

Inward Investment Services

High quality inward investment creates jobs and stimulates productivity growth in other firms, via competition effects and knowledge spillovers. UKTI is the national lead for delivering foreign direct investment, providing a free, bespoke and confidential service to potential inward investors on a range of issues, dependent on the company/project nature and requirements, and the stage of development. UKTI Account management teams are constantly working with some 2000 investment projects that are in the pipeline for the UK at any one time. Investment services include:

· Segmentation and bespoke proposition development – to ensure a tight focus on the needs of high value investors in making global location decisions.

· Outstanding access to Government and other networks relevant to the success of investment projects and ensured by client relationship management of the 200 most strategically important investors led at a senior level in UKTI, BIS or another directly relevant Government Department.

· Targeted marketing to cover subjects such as the UK business environment, sectoral and sub-sectoral information, and bespoke sales information, all the way to key information needed to reach the final decision to invest in the UK .

· A systematic investor development programme to ensure UKTI remains a high value-adding partner for those investors growing their business in and from the UK . Foreign-headquartered companies that have a UK presence can also avail themselves of the full range of UKTI export services.

UKTI’s investment network helps Government to develop a better understanding of investor concerns and ensure that investment drivers are considered in all areas of policy development. UKTI regularly raise with Whitehall Departments issues such as planning, transport infrastructure, migration, and skills availability.

Evidence shows that help from UKTI can have significant influence on investor decisions, resulting in a more than seven fold increase in High Value Foreign Direct Investment (FDI) over the past 4 years, helping to maintain the UK as a top location in Europe for inward investment, and globally second only to the USA . In 2009/10 , UKTI played a role in securing 759 investment projects into the UK - almost half the total UK figure of 1,619 and a 26.5% increase on the previous year. These projects have helped create some 47,000 jobs (more than 32,000 new jobs created and some 14,000 jobs safeguarded), a 61% increase on 2008/09.

Over 70% of inward investors report some significant influence from working with UKTI, most often through enabling the inward investor to overcome barriers to accessing information and contacts. Within this, 49% said UKTI had influenced their decision to locate in the UK . Some 57% report significant business benefits as a result of UKTI help enabling them to overcome such barriers.

Overseas and UK Networks

UKTI works across both BIS and the FCO, with some 1,300 people delivering services in 162 locations in 96 overseas markets, covering in excess of 98% of global Gross Domestic Product (GDP).     This overseas presence is bolstered by the formation of a new UKTI-FCO Commercial Task Force that will drive a central commercial imperative into all aspects of FCO activity to support the whole of government to deliver for UK business.

In the UK , UKTI works with businesses in a variety of ways, including engaging private sector organisations to deploy local networks of specialist trade advisers who are able to offer help to exporters and potential exporters across England . UKTI also has sector-based teams working closely with key industry partners nationally to direct the UK 's export efforts in a number of important sectors.

UKTI also works closely with external partners, engaging with Chambers of Commerce, Universities, banks and the business representative organisations such as the CBI and IoD. Nationally, UKTI sector teams work closely with a wide variety of trade associations, major UK corporate businesses and key people from the sectors with global business experience.

Regional Development Agencies and Devolved Administrations

UKTI's local networks are currently organised regionally along the same geographic lines as the RDAs. While UKTI delivers trade development support as part of a UK strategy, our teams in the English regions have always maintained a close dialogue with RDAs, ensuring trade development work is aligned with the economic development work of the RDAs and giving UKTI visibility of the broader economic strategies being pursued by the RDAs. UKTI expects to maintain these close working relationships locally once the new Local Enterprise Partnerships are created. UKTI is already working with BIS and the RDAs to establish the most effective and efficient way of continuing to provide essential support at a sub-national and local level for foreign direct investors. Detailed structures, functionality and costings of a new delivery model will be developed, with the aim of implementing the new arrangements from 1 April 2011.

At the BIS Select Committee session of 20 July, the point was raised that a disproportionate number of UKTI involved projects went to London and the South East compared with the regions in the North (North West & East and Yorkshire & Humberside). Historically, London has taken around 40% of all involved investment projects. However, many of these would be an initial footprint, creating a small number of jobs; expansion to other regions would often follow.

The Devolved Administrations (DAs) have fully devolved powers for all trade and investment activities. As well as delivering their own suite of services to local businesses, the DAs have access to the majority of UKTI services, including the resources available from the commercial teams in overseas Posts. UKTI maintains good working links with all three DAs and co-ordinates UK wide activities through the International Business Development Forum, on which the DAs play an active role.

UKTI Effectiveness and Efficiency

UKTI is assisting more businesses than ever at a diminishing cost to the taxpayer. Over the last three years, UKTI has cut the average cost of assisting business by 25% from around £14k to around £10.5k now. Over this same period, the quality of our work and the satisfaction of our trade customers have remained steady, and the number of businesses who have recorded improved performance as a result of working with UKTI has increased. Taken together this is a strong demonstration that UKTI is becoming more efficient and effective while maintaining the standard of service to our trade customers.

UKTI supports overseas companies looking to invest or expand their operations in the UK , through managing relationships and working closely with key clients. Consequently, efficiency and productivity are not measured in exactly the same way as trade services. We undertake an extensive analysis of the effectiveness of our Inward Investment network, providing a rigorous assessment of performance that allows us to optimise our use of resources. The average cost of UKTI’s support to each inward investment project has greatly reduced over the last three years, dropping by 27% from around £147K to £107K. This is set against a backdrop of continuing delivery of high value inward investment wins, which further demonstrates UKTI's efficiency and effectiveness.

Export Credits Guarantee Department

Introduction

ECGD is the UK export credit agency (ECA). ECGD supports UK exports and investments made overseas by issuing insurance contracts to exporters and investors and guarantees to banks that make loans to overseas borrowers. ECGD does not lend directly.

Most industrialised nations have an ECA that supports exports by providing government-backed guarantees, insurance and sometimes loans. The status of ECAs varies: in some countries private companies write business for the government account ( France , Germany ), while in others they are public bodies (the Canadian ECA is a Crown corporation). ECGD is, uniquely, a government department.

Regulatory framework

ECGD’s operations are bound by:

(i) statute (the Export and Investment Guarantees Act 1991, as amended by the Industry and Exports (Financial Support) Act 2009) and its standing consent from HM Treasury;

(ii) government policy that ECGD should:

a. complement, not compete with, the private market;

b. price to risk and to comply with its financial objectives;

c. operate at no net cost to the taxpayer;

d. seek to achieve a level playing field internationally among government-backed ECAs; and

e. take account of the Government’s wider policies in the exercise of its primary purpose of supporting UK exports and overseas investments;

(iii) international agreements that emanate from the WTO (the Agreement on Subsidies and Countervailing Measures), the OECD (principally the Arrangement on Officially Supported Export Credits), and the EU (the Short Term Communication).

As a public body, ECGD must also comply with the Freedom of Information Act and the Environmental Information Regulations. Exporters, banks, buyers, project sponsors and overseas governments who seek ECGD support must be aware that information provided to ECGD may be disclosable publicly in accordance with the terms of freedom of information legislation, even where that party may consider it to be sensitive or commercially confidential.

A lthough ECGD enters into private law contracts with exporters and banks, as a public body ECGD’s decision-making must comply with its public law obligations and, accordingly, can be challenged through Judicial Review.

BUSINESS OPERATIONS

Operating model

Unlike a private sector insurer or bank, ECGD does not seek to create demand but to respond to it (see also customer base and market awareness below). ECGD must be satisfied that the transactions it supports are acceptable in terms of:

· C redit risk – transactions are assessed in order that ECGD can be satisfied they meet its minimum risk standards, which are set with the aim that ECGD will meet its financial objectives. ECGD charges premiums that reflect the risk and to recover its operating costs;

· Environmental and social impacts – transactions must meet international standards as required by the OECD Revised Council Recommendation on Common Approaches on the Environment and Officially Supported Export Credits;

· B ribery and corruption – ECGD takes precautions that no corruption is involved in the transaction as far as ECGD can reasonably ascertain, in compliance with the OECD Council Recommendation on Bribery and Officially Export Credits; and

· Sustainable lending - where the export is to an IDA-only [1] country or to a country subject to the non-concessional borrowing policy of the IMF, ECGD must satisfy itself that the provision of export credits reflect sustainable lending practices (that it supports a borrowing country’s economic and social progress without endangering its financial future and long-term development prospects), while at the same time preserving the country’s debt sustainability. This is in accordance with the OECD Principles and Guidelines to Promote Sustainable Lending Practices in the Provision of Official Export Credits to Low-Income Countries.

These requirements may constrain ECGD’s ability to be flexible in the provision of its support for exports.

Business domain

Since 1991, following the privatisation of ECGD’s Insurance Services Group which was responsible for providing trade credit insurance for exports such as raw materials, consumer durables, components or light manufactures, sold on short terms of credit (usually up to 180 days), ECGD’s role has been principally to support exports of capital and semi-capital goods and services, normally, but not exclusively, sold with medium/long-term credit (2-15 years). Such exports include commercial aircraft, construction projects, defence, and hydrocarbon and telecommunications-related equipment and services.

In common with most other ECAs, ECGD is able to support ‘foreign content’ included in an exporter’s contract, usually in situations where certain goods cannot be sourced domestically, the buyer requires certain goods to be sourced from other countries, or UK prices are too expensive. ECGD requires a minimum of 20% UK content.

Volumes of exports supported

Over the past decade there was a gradual decline in the amount of exports supported by ECGD (see Annex A), largely as a result of the changes in the pattern of capital goods manufactured in the UK, and the benign risk conditions that prevailed over most of this period causing support to be provided by private markets and not from ECGD.

The economic downturn in 2008-09, however, led to a material increase in demand for ECGD support, largely due to the scarcity and increased cost of credit internationally and to a deterioration in the global risk environment. As well as receiving more applications for support in emerging markets, ECGD has also been requested to provide support for exports to developed markets which previously had not required such support because insurance and finance could be readily obtained from private markets.

In 2009-10, ECGD supported £2.21 billion of new business (up from £1.46 billion in 2008-09), due primarily to an increase in Airbus transactions. ECGD expects to see a further material increase in the amount of exports it supports by the end of this financial year (March 2011), possibly by over 50% by comparison with the previous financial year. The increase in demand has been across a number of sectors, led principally by civil aerospace and the oil, gas and civil construction sectors.

ECGD’s total exposure to credit risk is just under £16.5 billion (July 2010).

A consequence of the downward trend in business over the last decade was a reduction in ECGD’s premium income, part of which finances the cost of its operations. ECGD accordingly took steps to increase its operational efficiency and effectiveness and to cut its cost base, including reducing staff numbers from an average of 366 in 2003-04 to 207 in 2009-10. Despite the recent increase in demand, ECGD expects, without negatively impacting on its abi lity to support exporters, to reduce its staff numbers further over the lifetime of this Parliament in compliance with government policy to reduce the costs of the public sector.

Customer base and market awareness

ECGD mainly supports a core of large exporters, particularly Airbus and Rolls-Royce. It does provide support to SMEs under the Sovereign Star Trade Finance facility, which is a financing programme aimed primarily at supporting SME export contracts. The exporters supported since April 2000, including SMEs, are detailed at Annex B. Many hundreds of other companies, however, have benefited from ECGD support indirectly through supply chains. Since the onset of the economic downturn, ECGD has received inquiries and applications for support from a wider range of exporters than in previous years.

W ithin the resources available to it and consistent with not competing with the private sector, ECGD actively promotes its products to the exporting community, both directly and through trade bodies and banks, with the aim that exporters should be aware of them and, where appropriate, take advantage of them. Over the last two years, ECGD has particularly sought to make contact with UK renewable energy companies so that they are aware of how ECGD may assist them to expand their export efforts. ECGD also promotes its products overseas, particularly to project sponsors engaging in substantial investment programmes with the aim that their procurement decisions should take into account the availability of ECGD-backed finance in order to assist UK exporters pursuing business.

Collaboration with UKTI

Although much of UKTI’s business is not directly related to ECGD, the two organisations collaborate, both domestically and overseas, to exploit opportunities for UK exporters. This has been especially close in the oil and gas sectors.

OTHER ISSUES

Trade credit and short-term credit insurance

Before ECGD privatised its Insurance Services Group operations, it was effectively a monopoly provider of short-term trade credit insurance. Following the sale of the business to NCM (now Atradius) in 1991, other private credit insurers, including Coface and Euler Hermes, entered the UK credit insurance market. This brought more competition, leading to greater choice, more products and lower premiums for UK exporters than previously available from ECGD.

The economic downturn in 2008 and 2009 saw a global reduction in the availability of private trade credit insurance, principally because of the deterioration in the risk environment that led to a sharp increase in claims and related underwriting losses for insurers. As a result, UK exporters experienced sudden withdrawals and/or reductions of insurance limits on their buyers and an increase in premiums which hampered their ability to fulfil export orders. Moreover, some exporters faced constraints on obtaining finance from banks that had relied on the existence of short-term trade credit insurance as a form of risk mitigation for their lending.

In the face of the problems that existed in the short-term trade credit insurance market, the European Commission issued a temporary waiver of its Short Term Communication in 2009. This Communication bans governments of Member States from providing short-term (below two years credit) support for commercial and political risks involving trade within the European Union and exports to certain ‘rich’ OECD markets (including Australia, Canada, Japan and USA), these being the dominant destinations for UK exports. Of the total £227.5 billion UK exports of goods to all destinations in 2009 [2] , around 75% of goods exports went to this group of markets. Total exports of goods to the EU were £124.3 billion (54.7% of the total) and total exports to Australia , Canada , Japan and the USA were £43.8 billion (19.3%). The waiver allowed EU governments to seek approval from the Commission for interventions that addressed this shortfall in short-term credit risk capacity, subject to meeting certain tests that demonstrated market failure. A number of Member States (but not the UK ) obtained such approval. The waiver is due to expire at the end of 2010; the Commission is expected to engage with Member States on exit arrangements. The Communication is also due to expire at the end of 2010 and the Commission is considering the basis of its renewal.

More recently, the trade credit insurers have advised the Government that new capacity has been entering the reinsurance market for trade-related risks, so that they have been able to reinstate cover that had been withdrawn or reduced subject, as previously, to the acceptability of risks on individual markets and buyers. Although there are reports that problems still persist for some exporters, there are currently no plans for ECGD to intervene, whether on a direct basis (which would be very difficult as it does not have the staff, products or systems to provide such support without substantial investment) or indirectly through private trade credit insurers by way of reinsurance.

Letter of Credit Guarantee Scheme

Following a Public Consultation, ECGD launched a Letter of Credit Guarantee Scheme ( LCGS ) in October 2009. This provides support for exporters who export on short terms of credit to countries not covered by the EU Short Term Communication with the benefit of payment security under letters of credit. Under the scheme ECGD provides partial guarantees to banks against the non-payment of letters of credit opened by foreign banks on behalf of buyers which they confirm, thereby providing a secure means of payment for exporters. This product was designed to provide additional risk capacity to UK banks who confirm letters of credit for UK exporters in response to capacity constraints in the trade finance market.

Six UK-based banks are participating in the scheme, which covers more than 300 overseas banks in more than 30 countries. So far, the LCGS has supported five UK export transactions involving confirmed letters of credit totalling just under £3 million. The scheme is due to close on 31 March 2011.

Possible bond support scheme

E CGD provides insurance for exporters against the unfair calling of performance and related bonds issued on their behalf by UK banks and in favour of overseas buyers. Exporter organisations have pressed ECGD to provide support for the raising of such bonds, where banks are unwilling to do so. There appears to be some evidence that some exporters are facing constraints in obtaining such bonds from banks and that there may be insufficient bank lending capacity to support very large value bonds involving creditworthy mid-sized companies. ECGD is exploring whether and on what terms it might provide assistance. A decision is expected later this year.

Fixed Rate Export Finance

Under its Fixed Rate Export Finance (FREF) scheme, ECGD provides interest make-up support to banks which fund export credit loans to buyers at internationally agreed fixed rates of interest. The future of the FREF scheme is under review, given that it is now little used and there are market alternatives. This review has included a public consultation launched in January 2008 with an interim response from the Government and with successive extensions to the scheme until 31 March 2011 (unless exhaustion of its remaining budget requires earlier closure). A decision is expected later this year.

Public Consultation on Business Principles

In 2000, ECGD adopted certain Business Principles to guide the way in which it conducted its business. Earlier this year, following a public consultation, these principles were substantially revised, largely because the international agreements ( see above), which govern the activities of ECAs, had been adopted since 2000. Moreover, the Government decided that ECGD should no longer operate policies which separately and additionally went beyond those international agreements in order that UK exporters should not be put at a competitive disadvantage.

Sovereign debt and debt forgiveness

Debt is owed to ECGD where it has supported business with overseas governments and subsequently claims have been paid. The UK is committed to providing 100% debt relief to countries qualifying for the World Bank/IMF HIPC [3] Initiative. For this group, ECGD has already written off about £1.5 billion of debt. The remaining £750 million owed to ECGD by HIPC-qualifying countries is expected to be written off as countries comply with the terms of the Initiative. In the meantime, these countries are not required to make interest payments on their debts. This means that resources that would otherwise have been spent on debt service to ECGD can be directed at poverty reduction.

New claims

Despite the economic downturn in 2008 and 2009, to date ECGD has continued to face a low level of new authorised claims over the last five years: none in 2005-06 or 2006-07; two new claims totalling £4.6 million in 2007-08; one new claim for £4.1 million in 2008-09; and one new claim for £0.5 million in 2009-10.

Developments over 2008-09

G iven the importance to Airbus of export credit support from France , Germany and the UK , ECGD continued to work with its French and German counterparts to align their working practices more closely to improve their service. During 2008-09, ECGD was able to take forward its co-operation arrangements on this business, involving the provision of a form of re-insurance support in most cases. Under these arrangements, one of the three ECAs fronts the transactions with the buyer; the other two provide support to the lead ECA. Airbus has welcomed the efficiency benefits from these measures.

In the economic downturn of 2008 and 2009, there were concerns about the availability of sufficient funding from bank markets for guaranteed export credits. In the event no ECGD-supported export failed to be put in place due to insufficiency of bank funding. ECGD has further agreed to support for funding from capital markets to supplement finance available to exporters; the first such issue took place in June 2010.

As a result of the economic downturn and an increase in enquiries from exporters, ECGD adopted in November 2009 a more open policy towards medium-term business in rich markets [4] , which it had hitherto left to the private sector.

CONCLUSION

ECGD support for industry is concentrated on those companies that export, and particularly those which export capital goods and services. Despite its very low proportion of total UK exports, ECGD support is of key importance to several leading sectors. ECGD is responding to higher levels of new business in response to the needs of exporters where the risks to the taxpayer are acceptable.

24 September 2010

ANNEX A ECGD BUSINESS: FY 2000 – 2010

Notes:

· A small number of insurance policies/guarantees issued have not been disclosed for reasons of commercial confidentiality.

· SMEs refers to enterprises with fewer than 250 staff and turnover of less than €50 million and which do not have a parent that falls outside of this criteria. SME at time of underwriting may have been taken over later by a larger company.

ANNEX B

EXPORTERS WHO HAVE BENEFITED FROM ECGD SUPPORT: FY 2000-10

* SME

January 2011