Catalogue description Records of the Export Credit Department and Export Credits Guarantee Department

Export Credit Department

The Export Credit Department was set up in June 1919, its existence being regularised the next year by the Overseas Trade (Credit and Insurance) Act 1920. At that time it was a sub-department of the Department of Overseas Trade. There were two main reasons for its establishment; the need in a period of unemployment to increase the availability of jobs, particularly in the textile industries of the north west, by boosting the export trade; the hope that a similar result would be achieved by assisting the economic restoration of the countries of central and south-eastern Europe following the First World War.

An Export Credit Committee of businessmen and bankers was set up at the same time as the Department was established. Its main function was to advise the Treasury on all cases on which credit was given as well as on general policy matters.

The new department was only able to advance credit (in cash only) to UK companies for trade in certain countries. It was limited to a total credit of £26 million. This initial 'loan' system did not prove very popular as many companies were only prepared to use markets where it was not necessary to have an advance. This scheme was wound up in 1921 and was replaced by a scheme guaranteeing bills, known as the First Guarantee Scheme. This was in effect an insurance scheme. During the 1920s the department consolidated its position without any spectacular developments. It was able to offer cover for most of the world and its credit limited was steadily increased.

In 1926, the Hills Committee recommended that the guarantee system should be widened. The Second Guarantee Scheme was introduced and it was at this time that the Department's title was changed to the Export Credits Guarantee Department.

Export Credits Guarantee Department

During the late 1920s, the Export Credits Guarantee Department's (ECGD) position was under threat as although its business was increasing it was still working at a loss. The Niemeyer Committee, sitting between 1926 and 1929, however reported in the Department's favour and in fact recommended that its activities should be expanded. One result of this was that in April 1930, ECGD became a separate department with its own vote.

The Export Credit Advisory Committee of the Export Credit Department became the Export Credit Guarantee Committee of the ECGD, ultimately becoming the Export Guarantees Advisory Council in 1939. Its members are appointed from the banking and business world by the Secretary of State for Trade and his successors. The Council gives advice relating to general policy matters relating to specific markets and all business operations of the Department.

The first Branch Office of the ECGD was set up in Manchester in 1928. They were not only required to provide a service to existing clients but were also expected actively to seek out new ones and to advertise the work of the Department. Seven branch offices had been set up by 1939.

During the 1930s, new areas of cover were introduced, including insolvency policies and the first of a series of comprehensive guarantees. The Second World War initially lead to an increase in the Department's business especially in the payment of claims as country after country fell to the enemy. As the war progressed, and especially after the introduction of Lend/Lease, the amount of exports grew less with the introduction of export restrictions and shortage of manpower in non-war production industries. There was, however, an increase in the amount ECGD had to pay out in claims.

Following the War, there was little increase in ECGD's activities until the immediate post-war reconstruction had been completed. Once that process had been completed, Britain quickly realised that she would be increasingly facing stiff competition in many export fields. The activities of ECGD consequently increased, including the introduction of new guarantee schemes, especially short term comprehensive guarantees, and the recognition that developing countries should be given economic assistance to further UK interests in the future. These new powers were redefined by the Export Guarantees Act 1949.

In 1957, the Speed Committee was set up to look into the status and organisation of the Department. It recommended that the work of the Department was more suitably carried out by a government department rather than a statutory public corporation as was the case in a number of other countries.

During the 1960s and 1970s, the Department continued to expand (by the1960s there were a total of 20 branch offices throughout the country), with the introduction of new services. The Overseas Investment and Export Act 1972 enabled ECGD to give cover for non-commercial risks such as war for the first time. This was aimed at encouraging the growth of exports into developing countries. Major external events such as the oil crisis of 1973/1974 and Britain's entry into the Common Market played their part in the continuing development of ECGD during this period. The latter led to increased involvement by the Department in the activities of the Berne Convention from 1973 onwards.

In 1972 another committee was set up to enquire into all aspects of the work and the organisation of the ECGD. This was chaired by David Scholey and like its predecessors recommended that the Department should remain within the civil service. It did, however, result in a number of organisational changes. The branch office structure was reorganised with the establishment of ten regional offices with increased responsibilities.