RUSSIAN GOODS (IMPORT PROHIBITION). (Hansard, 22 June 1933)

Sir BASILPETO
On Tuesday I asked the President of the Board of Trade what quantity of petroleum oils had been imported into this country from Russia since the Royal Proclamation of 19th April last, prohibiting the import of petroleum oils from Russia; and whether such oil had been imported under licence given under Clause 2 of the Russian Goods (Import Prohibition) Act; and, if so, how many licences and for what quantities had been granted since 19th April last. My hon. Friend assured me, in an answer, that no licence had been issued under the Act, and when I asked him from what source the Russian oil products organisations were still selling the full volume that they sold before exactly as if no embargo had been imposed, he replied as follows: I can only tell my hon. Friend that it must be from a non-Russian source."— [OFFICIAL REPORT, 20th June, 1933, col. 631, Vol. 279.] I want to read Clause 1 of the Russian Goods (Import Prohibition) Act: If at any time a question arises whether any goods imported into the United Kingdom were grown, produced or manufactured in the said Union, it shall be lawful for the Commissioners to require the importer to furnish to them in such form as they may prescribe proof in respect of the country in which the goods were grown produced or manufactured, and unless proof is furnished to the satisfaction of the Commissioners that the goods were grown, produced or manufactured elsewhere than in the said Union, the goods shall be deemed to be goods grown, produced or manufactured in the said Union. Those are the words of the Act, and I should have thought that the Commissioners would have made inquiry into the case and that the hon. Gentleman could have given me a categorical answer from whence this great supply of petrol— petroleum oil, as it is termed in the Act— is still available for carrying out, not only the distribution throughout the country but the fulfilment of the contracts entered into by this company. I would refer the House to what the President of the Board of Trade said on the Second Reading of the Act. What impressed the House 1062 more than any other sentence in that speech was that in which he said: If you ask me whether this touches them on a sensitive spot I say that it does; and, what is more, it is the only spot we can reach."—[OFFICIAL REPORT, 5th April, 1933: col. 1884, Vol. 276.] The House was satisfied on that assurance that we have got a watertight arrangement which would really operate in the direction we wished to bring pressure on the Soviet Government in respect of the imprisonment of our fellow-citizens in that country.
As to the source from which this oil comes, it is rather remarkable the day before yesterday Lord Bearstead, speaking at the annual meeting of the Shell Transport and Trading Company said this: A falling production, in spite of accelerated drilling, and an increasing internal consumption rendered Russia an ever-decreasing competitive factor, except in so far as she figures as a purchaser of American oil in order to implement dwindling supplies. It therefore appears from this that it is probably America or the surplus from the Texas oil fields which is the source of supply. If so, it would appear that far from the embargo placed upon Russian oil being any effective step in this controversy with the Soviet Government, that the Soviet Government are in the comfortable position of being able to place their orders and so open up markets for Soviet goods with America and supply our market through the Russian organisation. It is obvious, whatever view you take on economic questions, that it is common ground that the country that buys in a market is probably able to sell in the same market, as there is no other way of liquidating trade between the two countries. I suggest that, if we want a supply of Texas oil, it is in the interests of this country, in the interests of our trade and productive industry, and hence of employment in this country, that we should place those orders, and should not do it through the intermediary of a Russian company carrying on its business precisely as before the embargo. I want my hon. and gallant Friend to tell us whether this Russian Oil Products Company is a Russian company. I should like to know where the profits from these sales—retail sales all over the country as well as very big contracts with large users of oil—go. I should like to know what steps the Government propose to 1063 take to render the prohibition an effective instrument of our purpose.
The goods enumerated in the Proclamation of the 19th April, which I am told took effect on the 26th, are few in number, but they are very important. They are butter, wheat, barley, oats, maize, poultry, cotton, petroleum, and wood, sawn and manufactured. The House has been told that that covers 80 per cent. of the Russian exports to this country, but there is still 20 per cent. remaining, and I should like to know whether the Government propose to issue a further Proclamation, as that with regard to oil is ineffective, to deal with the other 20 per cent. I should like to know, further, in view of the fact that the Soviet Russian Government have placed an embargo on our exports to that country, and have taken such steps as they could by way of reprisals in regard to British shipping, whether we are going to permit this Russian company, if it is, as I believe, a Russian company, to continue to do its business in this country precisely as it did before the embargo.
Our prohibition should be made as effective as it possibly can be, and I cannot see why, considering that no English company could have these facilities in Russia for doing trade there, we should allow a Russian company to evade this embargo and do a, to it, very profitable trade with Texas or some other place by importing oil from there and fulfilling its contracts as before. I should like to take this opportunity of reminding the people of this country that every gallon of oil that they purchase from this Russian Oil Products Company is directly tending to diminish British trade, is thereby diminishing opportunities for employment in this country, and is doing definite harm and injury to the unemployed here. I would ask my hon. and gallant Friend to tell us what steps the Government propose to take in the circumstances I have enumerated. It is clear that in respect of one important branch of these imports this Measure has miscarried, and I want to know what they are going to do to fill the gap, and to touch the sensitive spot to which the President of the Board of Trade referred, because I am satisfied that there are steps which they can take. I have suggested two; there may be better ones; 1064 and I ask what the Government are going to do about it.

§ Lieut.-Colonel ACLAND-TROYTE
It is too late to make any speech on the subject now, but as my hon. Friend the Member for Barnstaple (Sir B. Peto) has raised the question of the imports of Russian oil, and thereby the whole question of the embargo on imports from Russia, I wish to ask my hon. Friend in his reply to deal also with the imports of Russian butter. During May of this year 15,862 more cwts. of butter were introduced into this country from Russia than were imported from that country in May of last year before the embargo was imposed. That shows that the embargo is a complete farce. No steps whatever are being taken to enforce it. I hope that in future steps will be taken to enforce it, particularly in regard to butter, because Russian butter is undoubtedly helping to reduce the price of butter in this country.

§ Lieut.-Colonel JOHN COLVILLE (Secretary, Overseas Trade Department)
The hon. Baronet the Member for Barnstaple (Sir B. Peto) raised this question entirely on the matter of oil and therefore I did not come prepared to discuss the whole question of the embargo, but I must say in answer to my hon. and gallant Friend, though I cannot necessarily accept the figures he has given as correct, as I should wish to examine them, that the position in regard to all butter imports allowed to enter the country since the application of the embargo has been determined by whether payment had already been substantially made. I think he will agree that no possible good could be served by leaving the Russians in possession both of the butter and of the money.
As regards oil, my hon. Friend raised first of all a technical point in connection with the operation of the embargo. How is the prohibition of the imports of oil applicable to a company which was formed to distribute Russian oil. Russian Oil Products, Limited, is a British registered company, but as far as I know has no British capital in it. Therefore, he asks, why it is that after the application of the embargo the company is still supplying oil throughout the 1065 country. First of all I would remind him that all companies keep considerable stocks of oil in the country—stocks likely to last in some cases for a month or even more. That factor must not be left out of account in dealing with the operations of the company. I should like to make quite plain the system adopted to make sure that oil of Russian origin is not coming in. It may be suggested that Russian oil is being imported from other countries and passed off as being from those countries. That is not possible. In Section 3 of the Russian Goods Importation Act it is laid down that it shall be lawful for the Commissioners to require the importer to furnish to them proof in respect of the country in which the goods were grown, produced or manufactured, and unless proof is furnished to the satisfaction of the Commissioners that the goods were grown, produced, or manufactured elsewhere than in the same Union the goods shall be deemed to be grown, produced, or manufactured in the said Union. Prohibited goods from non-Russian countries, through which evasion may take place, have to be accompanied by a certificate of origin. The importer who wishes to import prohibited goods from any of those countries has to prove to the satisfaction of the Commissioners that the goods are not of Russian origin, and he can only do so by producing a certificate of origin to which the British Consul in the country of consignment has put his signature. There is no ground for supposing that this safeguard that actual Russian produce is not entering the country is not effective.

Captain RAMSAY
Is the hon. and gallant Gentleman aware that Russian Oil Products have circularised all the people who take their oil that the supply will go on as usual? How does he explain that?

§ Lieut.-Colonel COLVILLE
Yes, Sir, but not Russian oil. I am coming to that point. They do not guarantee to supply Russian oil. The Department believe that this safeguard is effective and that the certificates of origin which accompany each consignment are sufficient, in our opinion, to guarantee that oil is not coming from Soviet sources. After all, British consuls are the responsible officers in the countries concerned, and we have no reason to believe that the certificates 1066 are anything but adequate in that regard. If my hon. Friend has any cases in mind and will put them before me, I shall be only too glad to investigate them. The check which has been instituted is, in our opinion, adequate to ensure that oil of Russian production is not entering this country for purposes of sale. My hon. Friend said that it would be possible for them to purchase oil elsewhere and sell it in this country. Nothing in the Russian Goods (Import Prohibition) Act could prevent such action being taken. That is quite clear. On the other hand, the hon. Member is imagining a good deal when he says that there is a profitable undertaking in procuring oil from another source far from the normal source and bringing it through difficult and devious channels to sell in this country. When he speaks of large profits being made, it is a pure assumption. The check which we have imposed on goods consigned from and produced in Russia entering this country, as long as the embargo is in operation, is completely adequate in regard to oil.
The further point he raises is admittedly not with the Act he has cited. That is the larger question; and one which would require special legislation. In regard to the particular question arising out of the embargo which exists under the Act, in our belief the check is absolutely adequate to ensure that oil of Russian origin is not coming into this country. The sales which are still taking place must be either from stocks Held in this Country or, it may. be, from purchases of oil from other countries.
As regards the whole policy I cannot go into that at this moment, but the House is well aware—and other countries are well aware—that the embargo can be removed on certain conditions.

§ Major PROCTER
Has it ever occurred to the hon. Member that it may be possible that Russia is buying foreign oil and replacing the amount that it buys by the equivalent amount of Russian oil, and getting round the embargo in that way?