§ Order for Second Reading read.
§ Mr. DOUGLAS HACKING (Secretary, Overseas Trade Department)I beg to move "That the Bill be now read a Second time."
This is a one-Clause Bill, founded on the Financial Resolution passed in this House on Tuesday, following a long discussion on Monday afternoon. The objects of the Bill are, first, to extend the period under which guarantees may be given under the Export Credits Guarantee Scheme by two years, up to September, 1931; and, secondly, to extend the period under which guarantees already given may remain in force by three years, up to September, 1936. We bad a long discussion on Monday in connection with the Financial Resolution upon which this Bill is founded. Many questions were asked, and they were all answered very satisfactorily.
§ Mr. HACKINGI have nothing to add to what I said on that occasion, but if anybody to-day wishes to ask any more questions, I shall be only too happy to answer them to the best of my ability. At present there is nothing to say other than I have said in the past, and I do not want to waste the time of the House, because other Members are anxious to speak on this Bill, so I will formally move its Second Reading.
§ Mr. WILLIAM GRAHAMAs the Secretary to the Overseas Trade Department has indicated, this subject was discussed at some length on Monday last on the Financial Resolution, and certainly I 2137 have no desire to review the ground which was covered on that occasion. But there are one or two features of the proposal to which I think attention should be directed. It is quite clear that we are now at a new and important stage of this form of credit insurance undertaken by the Government of Great Britain. Immediately after the War, for the purpose of stimulating employment in the export trade, what was described as the advances scheme was introduced. By common consent, although the losses were limited to one or two parts of Europe, that scheme could hardly be continued. It was then replaced by a scheme which was based on the guarantee of ordinary mercantile bills, and that continued in force for a considerable time until the Credit Insurance Committee discussed the subject in 1926. The Report of that Committee makes it plain that the scheme had been criticised on the ground that the amount of cover which was offered by the Government in these bills was insufficient, and so far that was borne out by the fact that at no time in the history of export credits, up to that point, and indeed not since that point, had the aggregate guarantee of£26,000,000 which was available been even remotely approached. I think I am right in saying that probably at the best and, of course, remembering that these are in the main short-term credits, only a few million pounds have been outstanding, and none of us dispute, while warmly sympathetic to the scheme, that it touches only a corner of the great volume of our export trade.
The next stage was the introduction of the new form of contract following that Report of the Committee, over which the hon. and gallant Member for Ripon (Major Hills) presided. It was described by the hon. Gentleman opposite in proposing the Financial Resolutions a few days ago. Now we are at the stage in which we give not only a kind of insurance in bad debts or other cover to the export trade, but also, in this new contract, financial facilities in the form of an out-and-out guarantee to the banks, with certain conditions which turn in part upon such recourse to the exporter as may be available. I do not propose to detain the House with an analysis of the technicalities of the scheme, which are characteristically dull, but the departure is certainly important. The hon. Gentle- 2138 man may have had his attention directed to certain criticism as to whether, unless the new out-and-out guarantee is very jealously safeguarded, there may not be a tendency to revert to at least some of the difficulties of the original advances plan. I do not share that view, because I am perfectly satisfied that the Advisory Committee will exercise the very greatest care, but still that is a line of criticism which has appeared in one or two quarters in recent days.
The next point is the unfortunate addition which the Government have made to a recommendation by the Estimates Committee in their analysis of export credits. That review was largely directed to the administrative charges under this scheme, and there is no doubt it was of a very thorough-going character. But to the best of my recollection—the Secretary to the Overseas Trade Department will correct me if I am wrong—the Estimates Committee did not propose that there should be an inquiry into whether at this stage, the Export Credits Scheme should be handed back after the pioneer work to private effort in this country. The hon. Member for the City of London (Mr. E. C. Grenfell) made an important speech on the Financial Resolution in this connection, and the substance of his speech was, as. I understood it, that the amount of outside ordinary private business arrangement for this class of insurance had increased, and that probably it would be better if the scheme were closed down altogether and the Government were out of the business. That is hardly borne out by what is said with apparently equal authority in other quarters; and that introduces the House to a very important consideration in this class of insurance.
By common consent, the perfect business, if I may so describe it—that is, the business which is thoroughly secured and good—will be covered by the trade indemnity companies or by similar organisations. I think that is tolerably plain, whatever view we take of Government intervention. Then the speculative-business, at the other end of the scale, we all seek to exclude. That is clear in the Government's publications, and I imagine that private business would be the last to undertake it, since the losses in a field of that kind, as we all know, can be very dramatic and substantial, 2139 and they fall sometimes at very short notice. But there is an intermediate class of business. It is not just the thoroughly secured, automatic, absolutely sound class, and it is not the speculative class, but it is a quite good and healthy class, which we all want to try to encourage if we are going to use public credit to stimulate exports and to help employment. It is that class of business which may broadly fall to the Government's scheme as amended by these out-and-out guarantees to the banks. No doubt here also we have the safeguard of the Advisory Committee, and so far of the banks, although it will be observed, they 'are fully covered.
That appears to me to be an important consideration, and, therefore, I regret that there should be any element of doubt at this moment as to whether the Government scheme will continue. I make no reflection whatever upon the ability of the acknowledged experts who have been appointed to consider this problem, but it is not in the least unfair to them to say that their whole outlook and their former practice have been in the direction of encouraging purely private enterprise. I should be amazed if they presented a Report which did other than suggest that at the earliest possible moment this should go back to the City or to any company that would undertake it. Here again the public have done pioneer work and taken certain risks, and perhaps, when it might be of some benefit, though we are not out to make a profit, it will pass from our hands. The House should be perfectly clear at this stage that these questions are before us; and while it is true that we have never yet approached our contingent liability in the aggregate of£26,000,000, there may be a considerable development of this form of guarantee on the basis of that out-and-out cover in the new form of contract which the Government have devised.
Having said so much in the realm of, I trust, not unfriendly criticism of the scheme, may I conclude on a note of practical suggestion to the President of the Board of Trade and also to the Secretary to the Overseas Trade Department, whose little publication is an admirable summary of the main features of the scheme, and should enable even busy men to appreciate exactly what is 2140 proposed. Far more than that is required.
For a long time now the Department of Overseas Trade has been issuing valuable reports dealing with economic, industrial and financial conditions in the different countries of the world, and I think the House of Commons might very well this afternoon take the opportunity of directing attention to one feature in those reports, namely, that part now, I think, included in all, in which our representatives on the spot in those countries direct attention to the possibilities of British trade in those markets, and give chapter and verse as to the manner in which our trade could be expanded. The circulation of these reports might be increased. The fact remains—and this is, I think, our common experience—that they are not nearly well enough known to a great number of manufacturers and traders in this country and also to our trade union and labour organisations. These reports contain the most valuable information. The reports are rich in constructive suggestions, and we should make a far greater appeal on the Floor of this House for their study. Many of those markets are peculiarly susceptible to the appeal of this exports credit scheme in its amended form and as there turns on it the question of British manufactures exported from this country, affecting the employment of considerable numbers of men and women, many of whom are now out of work, it is all the more urgent that we should bring the information to the notice of those whom it concerns, and I trust the President of the Board of Trade and the Parliamentary Secretary to the Overseas Trade Department will agree with me in that contention.
One other word. This is an interesting illustration of the manner in which we are using public credit to stimulate export and employment. Far be it from me to suggest any form of inflation. It does not appeal to many of us on this side of the House, with all the dangers it involves. But I think it is true of our post-War experience, and certainly of the past six or seven years of profound industrial depression, that we have not made nearly the use we might have made of the undeniable strength of our public credit even in these difficult circumstances and times. After all, at the very best, we only covered£75,000,000 of con- 2141 tingent liability in the Trade Facilities Acts, and they are now closed, and the guarantees in due course will run off. We only cover£26,000,000 here, and very few millions have ever been taken up at any stage of the scheme. The other guarantees we give publicly are relatively trivial in character. Our burdens are great, and we have shouldered a very great part of post-War obligations compared with other countries, but our credit is still in the main very sound; I do not agree with that school of thought which is constantly urging that you must be so much afraid of even a contingent guarantee, because the choice on the other side is the regular payment of cash to unemployed men and women for no service whatever, and for the creation of no capital asset in this country.
Therefore, it would pay any Government to take even a greater risk, if you like, in a contingent guarantee if you provide employment, and get rid of this terrible drain in actual cash, and, more than that, in human personnel in the process. And so we, on this side of the House, while desirous of keeping these schemes on a purely public basis as a fundamental principle, will encourage a plan of this kind subject to the criticism I have offered, in the hope that it will be at least one constructive proposal for the relief of large numbers of our fellow-men now, unfortunately, without employment in the State.
§ Mr. KELLYI wish to raise one or two points. I cannot understand why these new guarantees are to expire in 1931, and I wonder whether or not the Government have given consideration to the question of putting the date at a much further distance than 1931. Three years certainly seem a very short period when dealing with credit, and that also applies to the period under which guarantees may remain in force, namely, till 1936. I hope the Secretary to the Overseas Trade Department will explain this limitation, and why they can only think in terms of such a short period of time. The other point I wish to put forward is this. Why is there no Clause in the Bill which makes it clear that political considerations can play no part in the administration of this particular Department? More than once during the discussion hero a few days ago there was 2142 raised the question of political considerations coming in when dealing with certain parts of the world, and I hope that, even now, so as to ensure that no one in the Department may at any time think in terms of political considerations affecting business, some words may yet be inserted in this Measure. When one is concerned with some of the big industries in this country engaged in the export trade, and one finds how they are hampered by this, how they are working short time, and how some of them have had to close departments because of difficulties with regard to credits in their export, one wonders at the Government not making greater efforts than this particular Measure makes. I hope that even now some thought will be given to the period of time, and that some words will be inserted in the Bill that will prevent any Minister from introducing political considerations when dealing in the matter of credit.
§ Mr. TAYLORI want to impress upon the Government that they should reconsider their attitude in relation to trade between this country and Russia as far as it is affected by the proposal now before the House. The only possible justification for this Bill is that it will help us to deal with the problem of unemployment, and that it will enable manufacturers to bring to this country, through the aid of the State, work which, in the ordinary, normal course of commercial enterprise, would not be likely to come to Great Britain. It is because this legislation is primarily for the purpose of dealing with unemployment that I again raise this question. As far as I know, there is nothing in the proposal, or in the Overseas Trade Acts of 1920–1926, which expressly forbids the consideration of commercial transactions between this country and Russia. The discrimination which has been continuously exercised by this Government against proposals for Russian trade has been done by means of administrative action.
The hon. Gentleman the Secretary to the Overseas Trade Department has been perfectly honest in stating that the Government intend to exercise a political discrimination against all proposals affecting Anglo-Russian trade. On a previous occasion the hon. Member for Spelthorne (Sir P. Pilditch), who at that time was a member of the Advisory Committee, 2143 stated that the Committee would be quite prepared to consider proposals relating to Anglo-Russian trade entirely on their merits as commercial propositions. The hon. Gentleman who is now the Financial Secretary to the Treasury at once said definitely that under no circumstances would he allow proposals dealing with Anglo-Russian trade to be even considered by the Committee. I appeal to the Government to change their attitude, because there is now an entirely new factor in the situation. We have ended the Trade Agreement with Russia; I do not propose to go into the question of whether that action was wise or justified; but for good or ill, we have taken that step. Therefore, we have created a condition of affairs in relation to Anglo-Russian trade which is even more unsatisfactory than that which existed prior to the break. It is now quite impossible for British firms to consider long term credit negotiations with Russia in an atmosphere that will give them that political security which is a necessary basis for confidence in transactions of that kind, simply because of the attitude of the British Government in relation to Russia. Because this has created a new factor, our exports to Russia have almost disappeared.
I therefore suggest that in the present circumstances it is the duty of the Government to consider any proposal for extending our export trade even to Russia. It is our duty to give consideration to a proposal of that kind entirely upon its commercial merits, and from the point of view of the advantage which it will be to the people of this country, rather than from the point of view of those who live in Russia. It is the plain duty of the Government to enable manufacturers, who desire to do trade with Russia, to have the same facilities that exist with regard to trade with any other country. The hon. Gentleman, when speaking on the Financial Resolution, said that he was already alarmed at the losses that have occurred under this particular piece of machinery. Where were those losses incurred? They were not incurred in Russia, and I challenge the hon. Gentleman to give a single instance in which any British citizen has lost a penny piece as a result of the present Russian Government dishonouring any of the commer- 2144 cial commitments into which they entered. Will he state a single case where a bill has been dishonoured, and where loss has fallen upon those who have done trade with Russia? If he cannot, it is a direct argument for ending the political discrimination which is preventing the development of trade, and is directly responsible for a considerable amount of unemployment.
I am not asking that credit should be extended ad libitum to the Russian Government without proper consideration and adequate guarantees. What I am asking is that proposals of a commercial character shall be considered from the purely commercial and economic point of view by the Advisory Committee. If the proposals are sound, if they will bring work to this country, they should be considered, just as proposals between this country and France or Italy or any other nation would be considered. I stress this very strongly, because the ending of the Trade Agreement has increased the difficulties; and, if the hon. Gentleman will take the trouble to see what is happening in other countries, he will find that they are not allowing their political bias to ruin their trade. For instance, imports into Russia from Germany, France, Czechoslovakia and the United States are rapidly increasing as a result of the diminution in Britain's trade. The total turnover between Russia and the United States has now reached nearly double the pre-War volume. Quite recently a contract has been concluded between the Amtorg Trading Corporation, one of the Russian trading agencies in the United States, and the General Electric Company of America, which involves a sum of 26,000,000 dollars, and provides that credit for five years shall be allowed on 75 per cent, of the value of the contract.
I appeal to the Government to drop their attitude of political discrimination. I represent a constituency which has suffered very severely by the loss of the Russian market, and by the political uncertainty which has resulted from the refusal to take any steps to end the present unsatisfactory situation. Some time ago negotiations which would have made an enormous contribution to the solution of unemployment in that constituency had reached an advanced stage. Those negotiations were based not upon Socialist propaganda, but upon a desire 2145 of the manufacturers to keep their works going and their men employed, and to sell their goods. When I asked the President of the Board of Trade and the Chancellor of the Exchequer to receive a deputation to see whether it would be possible to bring that volume of work into the country, they declined to receive the deputation or to go into the facts of the case. We could make a great contribution to the solution of the unemployment problem even at this late period if the Government would drop their attitude of political discrimination. Let manufacturers and traders feel in regard to _Russia that there is no danger of a political rupture, and that they have a proper protection in trading with Russia, such as they are entitled to expect from the British Government. If the Government will make their contribution to the solution of the problem I am certain that in Lincoln and other centres in this country we can secure employment for a great many people. I beg the Government to drop their stupid attitude of political discrimination.
§ Mr. REMERThe hon. Member for Lincoln (Mr. Taylor) has told us a good many things, but he omitted some which I had expected to hear from him. He told us about a contract which had been placed by the General Electric Company in the United States of America.
§ Mr. TAYLORWhat I said was that the Amtorg Trading Corporation had concluded a contract with the General Electric Company of America.
§ Mr. REMERI understood from him that that contract had gone to America when, according to his argument, it might have come to this country. He did not disclose whether behind that contract there was any guarantee from the United States Government, such as he is asking the British Government to give. If the facts of the case are examined, I think it will be found that the United States Government have consistently refused to have anything to do with the Soviet Government of Russia. He told us, also, about other countries and their trade with Russia, and it might have advanced his argument if he had disclosed such information as may be at his disposal as to which countries in Europe have given a guarantee to their traders 2146 such as he is asking our Government to give in this particular case. As one who happens to know his constituency and the orders to which he is referring—
§ Mr. TAYLORI do not think you do.
§ Mr. TAYLORYou may do, but I do not think you know the facts.
§ Mr. TAYLORMay I ask the hon. Member to what concern he refers?
§ Mr. TAYLORI am not talking of Marshall and Sons, of Gainsborough, but the Lincoln firm of Ruston and Hornby.
§ Mr. REMERI have no doubt you are Deferring to the three firms of Ruston and Hornby, Limited, Clayton and Shuttle-worth, and Foster and Company, Limited. They are the principal firms there making agricultural machinery. Knowing the facts of the case, I think that without a Government guarantee every one of those firms would have been absolutely foolish to have taken on orders; and I also say the Government would have been absolutely foolish to have given any guarantee, knowing the facts of the case as I know them.
§ Mr. TAYLORBut you do not know them.
§ Mr. REMERI think there is more hot air to the square inch talked about this question of trade with Russia than about anything else. The question is whether we are going to be paid or whether we are not going to be paid; that is the question which any business man has to face. If it is not good enough for the business firms in his constituency to continue trading with Russia the Government ought not to take on risks which no private firm would take. I am surprised that the hon. Member should not have given more examples of foreign Governments who are prepared to take the risks. I believe that if we only rest quietly for a short time we shall find a different 2147 Government in Russia, one which can be trusted, and if we only wait for that to come we shall find that satisfactory trade will come to us.
§ Mr. TAYLORThat is the Tory idea—do business with those whose Governments you like.
§ Colonel WEDGWOODI am amazed at the speech of the hon. Member for Macclesfield (Mr. Remer). I always regarded the hon. Member as being a business man with considerable knowledge of the trade in which he is engaged, but if his business is carried on on the principles he has enunciated to-day, I am afraid we shall very soon have a by-election in Macclesfield, which may result unfortunately for his party. In the position in which our trade is at present we do not want more handicaps than are necessary thrown in the way of its recovery, and to import into this question of the recovery of trade these old international jealousies and hatreds is futile and disastrous to any such recovery. This Bill is one of a great series of Bills which the Government have brought forward with the object of making it easier for our manufacturers to put their goods on the markets of the world. In other words, it is one of a series of Bills directed towards cheapening production, cheapening the article sold to the consumer, in order to encourage British trade and to develop international trade. We have had Measures such as this to reduce the risk on orders sold abroad; we have had the Government's Measure for de-rating productive industries, which works in the same direction, towards cheapening production. I only wish they had carried their proposals a step further, and cheapened production still more by making all land and all raw material cheaper.
§ Mr. DEPUTY-SPEAKER (Mr. James Hope)I do not see how this can be relevant to the subject under discussion.
§ Colonel WEDGWOODIt seems to me we ought to consider this Measure in conjunction with other Measures directed to the same object, whether it be by the taxation of land values or whether it be by the de-rating of improvements—
§ Mr. DEPUTY-SPEAKERIf this goes on I am afraid that in a short time we shall get into a Debate on safeguarding.
§ Colonel WEDGWOODI cannot think that safeguarding will cheapen production or assist British manufacturers. My point is that all these Measures are directed towards improving trade, and each of them ought to be considered purely from the point of view of whether it will facilitate and cheapen production. It only complicates matters and makes them worse when what should be purely a trading department, what should be purely a Bill to facilitate marketing, introduces this age-old question of whether we are friends with the Russian people or not. The hon. Gentleman in charge of this Measure stated his position on an earlier stage of this Bill. I have read his statement and I must say that I wish he would ride on one horse or the other. I wish he would make up his mind. In answer to a question which was put to him then, he said, referring to the question of whether these facilities ought to be given to Russian trade:
In the first regulations"—The first regulations, mark you—which were ever published in connection with export credits it was positively laid down that it was not intended to apply the scheme to Russia.Not intended! It is like Al Coolidge, who "does not intend to stand." Does he mean that it was not intended then but that it may be so intended now? Does he mean that those first Regulations have now been changed? He deliberately leaves those words ambiguous. He goes on to say:But my department is really a nonpolitical department, and I am speaking from that point of view."—[OFFICIAL. REPORT, 19th November, 1928; col. 1443. Vol. 222.]Then he goes on to say that the sole question so far as his Department is concerned is the security of the credits which are granted. By a side wind we are told that the Russian security is not good enough and losses might occur. Is it not the case that the Government are not allowing these schemes to he extended to Russia because of the political reasons contained in the first Regulations published eight years ago. Probably the Government are not allowing these credits to be given to Russian trade because they do not think the security is good enough. It must be either one reason or the other.
§ Mr. HACKINGBoth reasons.
§ Colonel WEDGWOODIf that is so, why does the hon. Gentleman say that his Department is not swayed by political reasons? Obviously it is so, because he has not shown that the security of these credit schemes in Russia would be worse than the credit schemes given to Rumania, Turkey, the Balkans or other Eastern countries. If the hon. Member knows anything about trade with the Baltic States, he must know that trade with Esthonia involves us in much greater risks than trade with Russia. We have no evidence against the Russian Government except the old prejudice and spite which were embodied in the first Regulations. The scheme we are considering may be a good one, but undoubtedly it does not facilitate the placing of British goods on the Russian market. Under a Bill like this, why should we not only exclude trade with Russia but deliberately make it more difficult for people to trade with Russia. Irrespective of credits, by making this purely political exception you are putting up the backs of the Russian people against our English manufacturers. In America where they have no Acts of Parliament like the one we are discussing, the Russian people do not feel that they are being specially singled out in a prejudicial way by the United States. It is a well-known fact that the agricultural machinery being used in Russia is of American manufacture and a large trade is going on between Russia and America which is profitable to both countries.
§ Sir HENRY CAUTLEYThe American Government refused to allow the Soviet representatives to enter America.
§ Colonel WEDGWOODThat is quite true, because the American Government take no steps at all to facilitate export trade to Russia or anywhere else.
§ Sir H. CAUTLEYThen why should our Government facilitate export trade to Russia?
§ 2.0 p.m.
§ Colonel WEDGWOODWe have discouraged trade with Russia. What must be the inevitable result of our action upon the Russian Government? They say that England gives facilities to every other Government except Russia, and naturally they are reluctant to put orders from Russia with firms in this country. We are injuring our prospects of trade 2150 with Russia by the political element which is introduced into this Bill, because you are by that means preventing trade growing up between this country and Russia. We all know that trade is developing between America and Russia, and it is very likely that trade will develop between Germany 2.0 p.m. and Russia as well. I have not been to Russia, but I have recently been in Germany and Rumania, and I have been told that the whole agricultural machinery in Russia is of American manufacture. Here we are in this country cutting off our noses to spite our faces and deliberately antagonising the Russian people by making this childish exception. Although I think this Measure may do some good to our normal trade, for the reasons I have given, I think it is likely to injure the possibility of further trade being done between this country and Russia.
§ Mr. WELLOCKI think it would have been an advantage if, under the Bill we are discussing, we had been able to do something to improve our relations with Russia. I am sure that would have had a very salutary effect upon trade between those two countries. No one can deny that our relations with Russia have been very unsatisfactory in the past, and this has acted very detrimentally to trade relations between Russia and other countries. There is one thing that we do not seem to have realised in regard to Russian trade. We had a good trade with Russia before the War, and after the revolution in that country and the introduction of new ideas there were possibilities of developing in Russia an unlimited amount of trade with this country. I happened to be in Russia last year, and I was amazed at the 'activity and the development of new industries there which were quite unknown before the War. I found out that with regard to agricultural machinery, Russia was putting up a huge works outside Leningrad for its production.
Russia is developing her agricultural industry very rapidly, and I will give just one example. Whilst I was in Russia I went into the country and I arrived in a particular village on the same day that the first tractor had been introduced into that district. I saw the village people assemble to watch the tractor being worked. Some of the women seemed to 2151 imagine that a diabolical instrument had been introduced into their midst and they crossed themselves before the machine. In this instance the tractor had just been sent down by the Russian Government to be used as an experiment in order to encourage the people of the village to purchase a tractor by co-operative methods. The tractor got to work and the people were absolutely amazed with the result. Two women and a young man were flailing wheat in the next field by the old method and the villagers had an opportunity of seeing the two methods working side by side. I know that there is a revolution proceeding in the industrial world of Russia to-day, and we might be participating in this enormous social development in Russia but for our political prejudices. When I came to the end of my sojourn in Russia, I left the port of Batoum, and there I must say I felt very humiliated, when, standing on the quay, I saw American machinery being unloaded. I saw Ford tractors and other agricultural machinery being unloaded there, and I thought of our agricultural machinery workers in Lincoln and other places who are unemployed as the result of our political stupidity. It would have a very salutary effect upon our commercial and industrial relations with Russia if Russia could be brought into this scheme, if for nothing else than as a gesture in that direction.
§ Mr. HACKINGThe fact that no other Member has risen to speak may, perhaps, be taken as an indication that it is desired that I should answer a few of the questions that have been addressed to the Government this afternoon. In the first place, I should like to make reference to the speech of the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham). That speech was delivered with the right hon. Gentleman's usual charm of manner, and, moreover, was a most helpful speech in many ways. He said, among many other things, that he was afraid that the new scheme, of which the House has full knowledge owing to the distribution of the booklet a few days ago, might be open to difficulties and to the possibility of losses such as had not occurred in past days. The answer to that is that we have taken many precau- 2152 tions which were not in existence when we had less experience than we have at the present time.
One main difference between the policy to-day and the policy of some years ago is that originally the guarantee started from the moment when the goods left this country, and hon. Members can realise what that means on a falling market. If, by the time the goods reached the foreign importer, it was possible for him to buy them at a cheaper rate than that at which he had contracted to buy them originally, it was quite natural that he should, if possible, find some excuse for refusing delivery of those goods. Many excuses were made under which the goods were not taken up eventually by the importer, and, as a result, they were in many cases left in the hands of the Government, whose guarantee that payment would be made had been given from the moment the goods left this country. The position to-day is very different. On much of our business our guarantee only starts on the bill being accepted by the importer in the overseas country. Many additional precautions have been taken as the result of past experience, and I do not think that the right hon. Gentleman need be anxious as to the future. That is so far as losses are concerned.
The right hon. Gentleman also said that the Estimates Committee did not suggest that this scheme should revert to private enterprise. That is quite true; I do not think that the Estimates Committee did say that within a definite time this scheme should revert to private enterprise; but, nevertheless, there was a suggestion, perhaps veiled, in their Report, and, moreover, other Committees have certainly suggested, that this should he the ultimate end of the scheme. Incidentally, it is also the Government's intention that this should be the end of the scheme, and, if a Committee were set up to consider other problems, it is just as well that, they should suggest plans whereby it would be easier to hand over the scheme finally to private enterprise. There is nothing to be gained by setting up a special Committee to investigate that problem. The right hon. Gentleman also made a very constructive suggestion when he said that the reports of our overseas officers should have more publicity. We do give a great deal of publicity to the 2153 reports of our overseas officers, which are all works of very great value to the trading community of this land. If we can give them any additional publicity beyond that which we now give, I will certainly see that it is given. I will look into the matter myself to see whether or not our present policy in that connection is sufficiently advanced.
The hon. Member for Rochdale (Mr. Kelly) asked why there was in the Bill a limitation of the period of extension of the scheme, and why it was such a modest period. During the Committee stage of the Financial Resolution I said that private enterprise was getting very much nearer to our scheme, and I added that, as private enterprise was getting nearer to our scheme, so we should work in the direction of private enterprise. I hope that by 1931 private enterprise will be giving exactly the same facilities that we give to-day.
§ Colonel WEDGWOODBy private enterprise, do you mean the banks?
§ Mr. HACKINGNo, private insurance companies and other companies of that nature. Perhaps the right hon. Gentleman does not know that there are other insurance companies which are giving facilities at the present time in connection wth export credits, but they are not giving exactly the facilities which we give, and are demanded by the traders of the country. They are, however, getting nearer to us, and there is no use in putting a date into the Bill which is very far in advance of the time when we anticipate that they will be able to do this work. The hon. Member for Rochdale also asked whether political considerations will enter into the working of the scheme. As he knows, it is the Government who lay down the policy, and it, is the duty of the Department to carry out its work under that policy. Subject to the policy of the Government, political considerations, of course, will not enter into any scheme. The hon. Member for Lincoln (Mr. Taylor), who is specially interested in Russia, asked why Russia was not included in the scheme. I gave my business reasons on Tuesday, and I said that, in addition to the business reasons, there were reasons of policy, which were well known to the House. So far as the business reasons are concerned, we must consider the future. Looking at 2154 the present and considering the future, nobody will say that the position of Russia is satisfactory, and most people will admit—
§ Mr. WELLOCKIs Britain's?
§ Mr. HACKINGNo. Most people will admit that the future will probably be worse than the present. Russia has no available surplus of grain for export—
§ Mr. TAYLORWhat about oil?
§ Mr. HACKINGRussia's grain collection policy has been a failure, and the exports of Russia are not what they were some time ago. If you consider the present position in Russia and look to the future, as you must do, and to the probability of the position in Russia getting worse rather than better, I, personally, am not prepared to run the risk of a worse position 12 months hence, when our bills may become due.
§ Mr. TAYLORThere will be another war, I suppose.
§ Mr. HACKINGThe hon. Member mentioned that the United States are doing more export trade with Russia than we do, and he said also that the amount of export trade that the United States are doing with Russia is increasing, while ours is diminishing. He is quite right. He quoted figures to substantiate what he said. I have here the Russian official figures. In 1926–27, for the 10 months from 1st October to 31st July, we exported to Russia 118,000 tons of various goods and products. In 1927–28, in the same 10 months, we exported 66,528 tons, a difference of 52,000 tons. The main decline was in raw materials and semi-manufactured goods. It was 46,000 tons out of a total of 52,000. So there was not much difference in the actual manufactured goods. During that same period in 1926–27 the United States of America exported 152,600 tons to Russia, and in 1927–28 188,073 tons, an increase of 35,000 tons.
§ Mr. TAYLORCan you give us the figures in dollars and pounds sterling?
§ Mr. HACKINGI have not got them with me. This increase in exports by the United States and the decrease of our exports are not due to any difference in the treatment we give to Russia as compared with the treatment the United 2155 States give her. We treat her in exactly the same way. I want to give now the details in connection with manufactured goods, or rather divide up the total exports so that the House may appreciate what portion of that is manufactured goods. The breach with the Soviet Union took place on 26th May, 1927.
§ Mr. TAYLORDo the American figures include imports and exports by the concession companies operating in Russia?
§ Mr. HACKINGI am not quite certain, but I think so. As far as manufactured goods are concerned, we have not suffered very much. In 1926–27 we exported to Russia 21,527 tons. In 1927–28, most of which period was after the breach with Russia, we exported 20,862 tons, a difference of only 665 tons.
§ Mr. TAYLOROrders en route before the break.
§ Mr. HACKINGNot necessarily. Orders are placed with Russia at very short notice. There is very little that is in advance, and in any case Russia could have refused to accept the goods if she had not desired to have them, though they had been on the books some time. The United States do not acknowledge the Soviet Government any more than we do. In 1926–27 they exported to Russia 29,000 tons as against 40,123 tons in 1927–28, a difference of approximately 11,000 tons. I maintain that there is no difference between the way we treat Russia and the way the United States treat Russia.
§ Mr. PONSONBYWe have broken off relations, whereas the Americans never had any relations.
§ Mr. HACKINGThat may be, but the United States do not to-day have any relationship with Russia, and we do not either. They do not give credit facilities to Russia, and we do not. We stand in exactly the same position. If we look for the reason of the difference in our export trade compared with that of the United States we have to look to another source, which is not our fault. We have always been, and are still, desirous of trading with Russia. If Russia wishes to trade with us, she can do so. If there is a difference it is not our fault, but the 2156 fault of Russia herself. The hon. Member for North Aberdeen (Mr. Benn) twitted me yesterday or the day before that policy and politics had entered into the decision to exclude Russia from these facilities. Policy is the art of government, politics is the science of government, and all we have done is to combine the art with the science. He knows our policy as well as I do, and it is not my intention to repeat it. I say again that we are anxious and willing to trade with Russia, and hon. Members know it, and if we extended these trade facilities to Russia it would make very little difference to our trade with Russia. If hon. Members would do more in the direction of telling Russia that we are anxious to trade with her instead of telling her constantly, as they do, that we are trying to put hindrances in the way of our trade with her, which is not true—
§ Mr. TAYLORIt is true, and men are unemployed because of it.
§ Mr. HACKINGThey would be doing something which would be of much greater service to our unemployed.
§ Question put, and agreed to.
§ Bill read a Second time, and committed to a Standing Committee.