Members of the Export Group for Constructional Industries told a Department of Trade and Industry select committee at the House of Commons on Tuesday that the policies were out of line with those of other construction exporting nations and would damage the competitiveness of UK contractors abroad.
The group, which underwrites £3bn of goods and services exported by UK companies, was responding to a DTI review of state export insurance announced in August.
This proposed that the Export Credit Guarantee Department – a Foreign Office/DTI agency – should back UK involvement in foreign projects only after considering their ethical and environmental effects. The government body currently makes decisions to underwrite on a purely commercial basis.
Nigel Sloan, project finance director at Balfour Beatty, told the committee that negotiations with the ECGD on ethical and environmental considerations could lead to bidding delays and the loss of business abroad.
“It is impractical to expect the ECGD to assess each and every credit application. [The markets of] UK exporters would simply be taken over by their competitors,” he said.
Contractors argue that export credit agencies such as the ECGD are not the appropriate instrument for implementing the government’s sustainable development policies.
Ted Cooke, international finance manager at Amec, explained that UK firms needed cover to work in unstable parts of the world, such as Angola.
He said: “We have expertise that we are in danger of losing if we are not allowed to promote it and export it overseas.”
The export group asked the government to clarify its intentions. It said: “Exporters need predictability. The risks involved in pursuing major projects are high enough already, without having to take into account the risk of the export credit being vetoed at the last minute because of the intervention of another government department.
“If the government does not want to trade with a particular country or support a particular type of project it should say so openly so that exporters know the rules and can direct their efforts elsewhere.”