Around 20 of the UK’s biggest multinational companies account for the lion’s share of the Government’s export credit cover, leading to claims that smaller exporters are being treated unfairly.
British Aerospace received the largest amount of export credit cover in 1997-98, said the Export Credits Guarantee Department (ECGD). Thanks mainly to the Al-Yamamah arms deal, BAe had £2.5bn worth of contracts covered. The next largest recipient was Chiyoda-Foster Wheeler, with £372m for a gas plant in Oman.
The Federation of Small Businesses has suggested that a fixed percentage of export credit guarantees should be allocated to smaller companies to avoid them being left out.
However, small firms may benefit from subcontracts given out by the multinationals. Ian Campbell, director general of the Institute of Export, said: `The impression one gets is that there is quite a considerable spin-off to smaller businesses.’
Private-sector insurance companies are supposed to cover the smaller projects which are not covered by the ECGD. But small firms could suffer in trying to obtain private-sector export insurance, said Campbell.