HC Deb 17 November 1925 vol 188 cc194-5
Mr. HARMSWORTH

(by Private Notice) asked the Chancellor of the Exchequer whether the recent decision to remove the embargo on Dominion and Foreign loans being raised in this country provided for guarantees that money loaned should be expended entirely upon goods produced or manufactured within the United Kingdom?

Mr. CHURCHILL

I would refer my hon. Friend to what I said at Sheffield on this subject. [An HON. MEMBER: "When?"] Last week. Once the so-called embargo has been removed it is not practicable to prescribe exact conditions to the market. It must either be removed or maintained, and I am satisfied that at the present time the right course was removal. All loans must ultimately go out in goods or services.

Mr. A. V. ALEXANDER

Did not the right hon. Gentleman say at Sheffield that over-lending would bring its own corrective; and does he hold that that corrective would be in the form of adverse circumstances to the workers of this country?

Mr. CHURCHILL

Of course, on the removal of the so-called embargo we had hopes that it would give a certain stimulus to our export trade, and that that would be beneficial to the workers of the country. If over-lending took place, two things would happen. In the first place, the underwriters would find themselves charged with heavy liabilities, and there would be a check on further lending. Secondly, over-lending certainly affects the financial conditions, and may eventuate in an alteration of the Bank rate. I have no reason to believe that the circumstances of the present time render such an event likely.

Colonel WEDGWOOD

If the right hon. Gentleman is right, and the removal of the embargo would help our export trade, why keep that embargo on for 10 months?

Mr. CHURCHILL

I shall be delighted to make a speech on that topic, but really I could not do justice to it unless I trespassed upon the time of the House in a way I do not want to do.

Mr. ALEXANDER

This is rather an important question, may I put one more query? Is it not within the right hon. Gentleman's knowledge that periods of unemployment have definitely followed five or six cases of overlending in this country, and, in the removal of the embargo in the present trade depression, has he taken that into consideration?

Mr. CHURCHILL

Yes, Sir. We are endeavouring to return to the normal, and we believe that such return will produce, on a broad view, an improvement in the employment of the people.

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