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Page 96 24. The Government's task must be to enable the great mass of firms in a position to export efficiently to get on with the job. The following paragraphs indicate some of the ways in which this can be done.
Market Services
25. The best market services are provided by industry itself. We can, however, help. Market information is collected by overseas officers and channelled by the Board of Trade to trade associations and individual firms. We can and do help the individual exporter in his attempts to build up an export connection. Govern- ment services cannot be a substitute for the efforts of the individual firm to go out for export business, but they do give practical encouragement to the smaller firm with limited or no experience of export trade. It is important that the efficiency of these services should be maintained and, if possible, increased. If I need more staff, I shall ask for them.
Export Credit Guarantees
26. The export credits guarantee system has made a valuable contribution to the stimulation of export trade. We have just increased the sums available for the operations of the Export Credits Guarantee Department. Special arrangements to promote exports to the dollar area have existed for some time and we are about to make somewhat similar arrangements for the dollar countries of Latin America. The great emphasis that must now be placed upon our exports to the whole of the non-sterling world requires us to do everything possible to develop the use of export credit guarantee facilities. I have instructed the Export Credits Guarantee Department to press on with this work as a matter of urgency and to submit pro- posals for increasing the range of assistance available to exporters.
Medium-Term Credit
27. Our precarious balance of payments has made it essential to use the exchange control to try to secure prompt payment for capital goods and to limit the facilities for extended credit. Often, however, the choice is between extending the credit or losing the order and a considerable effort has been made to give special facilities in selected cases, with each case being examined on its merits. These arrangements are, I think, satisfactory, but there is need to explain what we are doing and to bring home to exporters that the Government will give prompt and sym- pathetic consideration to their applications for extended credit terms. I suggest that the Chancellor of the Exchequer should make an early statement about this along the lines of the attached draft. (Appendix B.)
Financing of Medium-Term Credit
28. Apart from Government policy on exchange control and credit terms, the exporter has to find the money. There have been suggestions from industry that the Government should devise a scheme to provide exporters with finance to cover orders taken on extended credit terms. At present many firms are said to be in difficulty in financing production against such orders without locking up funds urgently needed for the improvement or expansion of their capacity. I propose to discuss this with the Chancellor of the Exchequer, but my colleagues should know of this proposal which if accepted might involve Government loans of many millions of pounds.
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Merchant Banks
29. There is room perhaps for a greater contribution by the merchant banks to the promotion of export trade. In particular, there may be greater scope for the merchant banks to co-operate with larger firms, or groups of firms in the engineer- ing field to develop major opportunities abroad. For example, there are vast possibilities for capital goods exporters in a project such as the St. Lawrence Water- way Project now being undertaken by Canada. The Government may well have to give special help in such co-operative projects. I suggest that we should examine these possibilities; as a first step the Board of Trade, Treasury and Bank of England should discuss the matter with representatives of the merchant banks. home
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