OVERSEAS TRADE [CREDITS AND INSURANCES]. (Hansard, 2 June 1921)

§ Lieut. - Commander KENWORTHY
Before we pass the Report stage of this Resolution, which was very fully discussed in Committee—and I again thank the hon. and gallant Gentleman (Sir P. Lloyd-Greame) for the very lucid account which he gave us—I wish to draw attention to one of his remarks. 1394 During the Committee stage I asked the hon. and gallant Gentleman whether the Empire of Russia was included amongst the countries to which it was intended to extend the conditions of this measure. I do not want to go over again well-beaten ground, but the House has approved of the action of the Government in attempting to open up trade with Russia to the widest possible degree. In this matter the policy of the Prime Minister has prevailed, and I hope the Government will be successful in regard to it. I inquired whether, in view of the fact that this scheme is intended to apply to those countries with collapsed exchanges, it might be extended to the great unexploited vast tracts of Russia in Europe and Asia. No less an authority than Sir George Barker has publicly stated that to-day Russia affords the greatest potential market for British goods. Sir George Barker has up to the last month or two played a prominent part in objecting to any attempt of the Government to re-open trade with Russia, and carries great weight with the Government, as of course he does with hon. Members on this side of the House. The Parliamentary Secretary to the Overseas Trade Department told me that it was not intended at present to extend this scheme to Russia until Russia had shown some signs of wishing to honour her obligations, public and private. This old, threadbare argument about certain obligations which is not a cause jugée between ourselves and the Russian people, but which is still open for negotiation, was used for two or more years to prevent the general trade agreement being signed. I am surprised the hon. and gallant Gentleman brought out this moth-eaten, discredited argument. Since the last Debate it may interest the hon. and gallant Gentleman to know that I took the opportunity of waiting upon the head of the Russian trade delegation to this country. [HON. MEMBERS: "Oh!"] He is received at Downing Street, and I, as representing a city that has always had close trade relations with the country he represents, make no excuse for calling upon him and ascertaining his views on any matter concerning my constituency. I asked him his private opinion as to whether it would be of any advantage to the Russians if Russia were included in this scheme, and the reply I received was they did not need any such assistance from the British Government as 1395 far as their own trade is concerned, and that as soon as certain cases in Court about the ownership of gold are decided, they will have no difficulty in this country. But I submit it would be of great advantage to the British manufacturers if Russia were included in the scheme.
I make this appeal, not from the point of view of any advantage to Russia, but solely from the point of view of the British manufacturers, who I think need assistance. The reason I will put as briefly as I possibly can. The Germans, as I fully admit, have to-day the advantage of the exchange, and they have also the advantage of their proximity to Russia itself, and the great numbers of Germans who had trading relations with Russia before the War have an advantage over the British merchants trading there to-day. Under these circumstances, anything we can do to help the British merchant in entering into this great potential market we should be ready to do, and then, of course, if any of the British commercial community feel the same compunctions as the Parliamentary Secretary about trading with people who have not fulfilled their obligations, then, of course, they need not apply to the Department of Overseas Trade for facilities. But if there are merchants who feel that, for business reasons, it would be advantageous to them to enter into these commercial relations, they ought to have the same backing as merchants wishing to trade with other countries. If we have included Austria and Bulgaria — late enemies of ours—in this scheme, why should we not include Russia? The Prime Minister has stated that the matter of the pre-War obligations of Russia will be brought up at a general Peace Conference, and if the hon. Gentleman takes it upon himself to go directly counter to that, I think we should have a little more explanation of his reasons. If he fears criticism from the City of London, I believe I am right in saying that he need have no compunction of that kind. The City has quite changed its views on this matter, and fully agrees as to the desirability of trading not only with Russia but with every other country.

§ Sir P. LLOYD-GREAME (Secretary, Overseas Trade Department)
I find myself, as regards Russia, in complete agreement with the Prime Minister, but that 1396 does not leave me in equally complete agreement with the hon. and gallant Gentleman. I do not wholly follow the reasons why this should be extended to Russia. I understood before that it was difficult for Russia to trade with us without it, but to-night the hon. and gallant Gentleman has told us, after consultation with a high authority, that it is not required in order to enable the Russians to buy goods from us, but in order to assist our manufacturers. I venture to think that manufacturers in any country prefer payment in cash rather than in credit, but apart from that I do not think I can do better than repeat to the House what I said in Committee—not simply on my own initiative, but as the considered counsel of the Government. In reply to a question as to why it is not proposed, at the present stage, to extend the scheme to Russia, I said: The basis of credit must be the acceptance of the honouring of obligations whether in the immediate past or in the future. I think it would be hardly reasonable to ask the Committee at the present stage, when we do not yet know to what extent Russia is going to acknowledge obligations."—[OFFICIAL REPORT, 30th May, 1921; col. 773, Vol. 142.] That is a perfectly reasonable proposal to put forward. I hope and believe that the Russian Trade Agreement will succeed. The hon. and gallant Gentleman quoted the Prime Minister, but what, after all, did the Prime Minister say? We were anxious to get a complete settlement in the last negotiations, but it was not possible, though that was not our fault. It is true that these obligations all stand for settlement in the final Peace Treaty. We should like to get them settled up as rapidly as possible. We should have been very glad indeed to have made that settlement in the negotiations which led up to the Trade Agreement, and it does not rest with us that a completely satisfactory settlement was not arrived at.
Further, these advances which have been given hitherto, and the guarantees which are going to be given, have to be covered by a certain security, and that security, under the Act passed by this House, is submitted to an Advisory Committee. I cannot believe that, even if we were willing to extend it, the Advisory Committee would advise us to accept, or that anyone would be prepared to accept, securities, unless there was a definite proof that the country in question would 1397 acknowledge its obligations, and the only test you can apply as to whether a country is going to acknowledge its obligations in the future is the test as to whether it honours the obligations into which it has entered in the past.

§ Captain W. BENN
It is very regrettable that this financial business is persistently, and, as a matter of course, pushed by the Government into these hours of the night. I want to ask the hon. Gentleman one or two questions, which I shall put as briefly as possible. They are all directed to seeing how much money is being spent and whether it is wisely spent. We have already involved ourselves to-night in one Supplementary Estimate for the railways and an increased Estimate for the Scottish Office. Now we have this Vote. Here, again, from the White Paper one would judge that there was no increase above the maximum amount of £26,000,000. An hon. Member, reading that, would imagine that we had voted £26,000,000 and that this was only another way of spending it. But that is not so. The sum of £26,000,000 was the limit set in the original Act, but it is perfectly credible that a Minister might recommend expenditure to a further amount, and as soon as the Supplementary Estimate passed the House it would override the original Act. So that there is something very misleading about these White Papers, all of which suggest that what the Government is asking for is not increased expenditure, but only expenditure under the limits of the sum already voted. There are three questions which I want to ask. The first is, will the increased powers given by the Bill—when we see it—mean that the Estimate for £5,000,000 taken under the clamped services No. 10 will be exceeded for the year, or is it only a way of enabling the Department to make use of the credit granted? We have had the Estimate in the Budget that £5,000,000 of credit should be granted this year. If we are going to give these large powers to the Department, are we going to be asked for a further Estimate in order to enable the Department to exercise these powers? The second question is whether any bad debts have been made by the Department? Has credit been granted, and has it been proved that the money is irrecoverable? Those are ordinary business points. I daresay some bad debts 1398 might easily be made, but I think we might know whether any have been made, and, if so, to what amount.
The third question is, exactly how much credit has been granted, and what is the cost of the staff engaged in granting it? The reason I ask that is because I rather fancy that the National Expenditure Committee, when they examined this Department, put their finger on this spot and pointed out that, for the granting of a comparatively small business facility, a large expenditure was taking place on the staff, incommensurate with the facilities provided. Therefore, I would ask these three questions: first of all, will the extended powers cause the hon. Gentleman to come to the House and ask for a Supplementary Estimate; secondly, have amounts granted in credit proved irrecoverable in fact; and thirdly, what is the annual cost, say, for this year, of the staff required to distribute the credit of £5,000,000 which has been presented to Parliament and which, I suppose, will be voted in Committee of Supply?

§ Sir P. LLOYD-GREAME
I think the White Paper gives the information in a perfectly accurate form. The payments involved are not in excess of the amount of money in the Estimate, and I do not propose to ask for an increase. As a matter of fact, the method of doing this business by guarantees will actually be much more economical to the State than by way of advances. The second question, I think, was whether there have been any bad debts. No; I do not think there have been any bad debts up to the present. Of course, it is impossible to say whether advances which are repayable in two or three years will be fully discharged. In all cases a security is being taken and a commission is being charged which is estimated to be sufficient to cover risks and we have the advantage of a very strong advisory committee. It is not proposed to extend the staff, and the commission that is charged will, I think, be sufficient to cover the whole cost of the Department.

Mr. GREENWOOD
Is there any probability in the near future of Greece being included in the scheme?

§ Sir P. LLOYD-GREAME
I do not think at present there is any chance.