HC Deb 12 February 1931 vol 248 cc742-50

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. T. Kennedy.


I want to raise with the President of the Board of Trade the question of Russian trade. Hon. Members in all quarters of the House will agree that the present situation as regards trade with Russia is very unsatisfactory indeed. I am not going to weary the House with a long list of statistics with regard to trade with Russia during the past few months, but there is one fact which I think cannot be disputed, and that is that during the last year the trade results have been very much more satisfactory to the Soviet Government and to Russia than they have been to this country. We are allowing at the present moment Russian wheat to be dumped into this country without let or hindrance, at prices with which our own farmers cannot possibly compete. We allow timber to come in in almost unlimited quantities, produced under conditions which are, to say the least of it, dubious, without any let or hindrance, and it is well-known that the Russians are importing large quantities of goods of all sorts and kinds into this country with the avowed aim and object of furthering, so far as they can, the completion of what is known as the five-year plan. [Interruption.] An hon. Member opposite asks "Why not?". I am not objecting to that by itself, but I do not see why this country should turn itself into a sort of benefit society for the purpose of furthering the five-year plan in Russia, while it gets nothing out of it itself at all.

It is a well-known fact, and hon. Members in all quarters of the House know it, that one of the articles which we in this country are most anxious to export to Russia is cured herrings, and the right hon. Gentleman will forgive me if I deal with them specifically and in detail, because I happen to have some knowledge of that trade. I said just now that we are importing without let or hindrance the very things that the Russians are most anxious to send to us. What is the position with regard to the article which, perhaps, of all articles, is the one which we are most anxious to send to them? In this country during the past year we cured 1,530,000 barrels of herrings, approximately. At the present moment there are lying whipped on the quays of this country no fewer than 222,348 barrels of herrings, and, of these, it is estimated that at least 140,000, and perhaps 150,000 barrels, are unsold. Last year the Soviet Government did come in at the last moment and more or less saved the herring position. They bought something over 70,000 barrels. This year, up to date, the Soviet Government has not purchased a single barrel of herrings. What is the point of all these diplomatic readjustments, all this exchange of Ambassadors, and all the paraphernalia that has been carried out with such a blowing of trumpets by right hon. Gentlemen opposite, if we are going to get nothing out of it whatsoever?

I do not want to create an atmosphere of panic, but only two years after we have resumed diplomatic relations with the Soviet Government the position in the herring fishery industry gives cause for greater anxiety than at any other time in its history, even in the last 10 years, which have been so serious for it. The Soviet Government has up to the moment not come into the market for the purchase of a single barrel of herrings and there are over 200,000 barrels of which it is estimated that 150,000 are unsold. I believe negotiations are going on, which are almost bound to break down, for the sale of a small parcel of these herrings which are still unsold at a price which will mean a loss of 6s. or 7s. a barrel to the curers even if they were sold. The only excuse for resuming relations with Russia is if we are to do an advantageous trade. I voted in favour of the resumption of diplomatic relations simply and solely on that ground. We are passing through the gravest economic crisis in our history. I take the view that if we can do a trade with Russia which will be advantageous to this country and which may perhaps save the herring fishing industry, which is vital to the future of Scotland, which may put men into employment, it is worth while to shut our eyes to some of the things that are going on inside Russia; but I certainly do not take the view that we should resume diplomatic relations and exchange Ambassadors for the simple purpose of helping the Russians to carry through their five-year plan and get nothing out of it ourselves.

What is there to prevent the Government entering into direct negotiations with the Soviet Government for a trade agreement under which we shall only take from Russia goods in proportion as they take goods from us? There was a trading agreement at one time and it was advantageous to this country. We are getting nothing whatever out of the present agreement. We are only doing a good turn to Russia, and I cannot see why we should do that. Only to-day I had an interview with the head of the Russian trade delegation and I asked him if he had any objection to entering into negotiations for reciprocal advantages whereby if we took a certain amount of goods that they were particularly anxious to send to us, they would take goods that we were particularly anxious to send to them. He said the Russian Government had no objection whatever but they had never received any invitation to enter into direct negotiations for an agreement of that kind. We are giving unlimited credit through the Export Credits Scheme to the Russian Government. They are doing nothing for us. We are buying timber produced under very dubious conditions, and wheat dumped at a price with which we cannot compete. That is entirely unfair, and I ask the right hon. Gentleman to give me the reasons that prevent him from entering into direct negotiations with the Soviet Government. When I asked him a question the other day he replied that it was impossible to isolate Russia as a country and enter into a separate trading or commercial agreement. Why is that? I should have thought that if there was any country in the world that was peculiarly suitable for such isolation it was Russia, because its Government is in absolute control of all imports. My friends in the herring fishing industry have represented to me that they themselves are too small to negotiate with so vast a machine as the Russian Government. Nothing but the whole machinery of the Government of this country is capable of achieving a fair and square deal with Russia. Therefore, I ask the right hon. Gentleman if he would give me any reason why he does not enter into negotiations on the lines I have attempted to outline?


When I was Minister for Overseas Trade. I remember hon. Gentleman opposite, then in Opposition, howling at me for not giving credits to the Russians which would enable them to buy herring. Now we are giving to the Russian Government credits amounting probably to £5,000,000 or £6,000,000—I will not go into the question of whether that is justified or not—and the Russian Government are only buying about £3,000,000 from us and are using the rest of the money to buy elsewhere. The fishermen of this country are a bulwark of the nation. Apart from the monetary interest of these men, we need them for the sake of the Navy, and their trade must be kept alive. It seems to me that if we are giving credit to the Russian Government, the least we can do is to ask them for fair-play. We can say to them, "Inasmuch as you carry in your own hands the whole of the export trade of Russia, we shall insist upon your taking among the goods you buy from us a certain amount of our fishery products." We cannot let the matter go on as it is. We are blaming hon. Members opposite not merely for failing to look after the interests of the fishermen, but, on the grounds of hypocrisy, for not doing now what they blamed us for not doing.


I would like to plead for the fishermen of the East Coast but I do not share the point of view of hon. Members who have spoken. There were other reasons for breaking relations with Russia, apart from trade. But throughout the whole of the East Coast of our country there was a great expectation that when relations with Russia were resumed our hard-pressed fishermen would find it easier to resume trade with the Baltic and other ports than it was when relations were disrupted. I hope the right hon. Gentleman will do all he can, and I hope he will be able to get a settlement which will give the fishermen of the East Coast some encouragement to look for an increase of the markets that they want badly.

The PRESIDENT of the BOARD of TRADE (Mr. William Graham)

I approach this subject in the spirit in which it has been presented by the hon. Member for Leith (Mr. E. Brown). The existing trade agreement which was con- cluded some time ago is temporary in character and proceeds on the usual lines of affording facilities for trade, one way and the other. That is the basis of our trade relationship at the present time. We are all anxious to try to promote the recovery of the herring industry, more particularly on the East Coast. During the time we have been in office, a certain amount of progress has been made, and last year 180,000 cwts. of herrings were sold to Russia. That is a, marked advance upon the very small export of 1929, and it is appreciably better than the export of herrings, in, at all events, a number of recent years, during the period when our predecessors were in office. Of course, it is very far short of what we would like to see sent to this and other markets.

This trade agreement is open and wide in its terms, but the House must observe to-night that what the hon. Member for East Aberdeenshire (Mr. Boothby) asks for is, in fact, a form of bargain. Ho wants us to get some kind of guarantee that against, say, the timber we import into this country a certain quantity of herrings shall be taken from Great Britain in return. That is what his speech means if it means anything at all. Of course, it is a very earnest appeal on behalf of his constituents, and one which is quite properly made. If we have to deal with the case in that way we have immediately to consider what that will involve. I have been in touch with this problem ever since we have been in office, and there is no direct suggestion by the Russian Government, according to my information, that they are willing to conduct trade on those lines.

Plainly, there is only one method, that we must suggest some form of embargo or restriction on the goods imported into this country, and that points at once either to some form of tariff or a form of prohibition or regulation. That prohibition runs absolutely counter to the terms of the temporary trade agreement, and anything to give enforcement to this class of bargain could only be achieved by ripping up that agreement. I have not the slightest hesitation in saying that if we did anything on those lines, we should do a less aggregate trade than we are doing at the present time. Moreover, it would run counter to the policy of this Government, which is hostile to imports and exports prohibitions. Our attitude on that matter has always been quite clearly defined. We take the view that the aggregate volume of trade would be restricted, and that on balance this country has nothing to gain but a great deal to lose by such a development at the present time. This is the state of affairs, and, accordingly, we have to fall back upon a policy which has been very widely criticised, and, I think, very largely misunderstood.

Hon. Members have not suggested long credit terms as applicable to herrings, because they are a highly perishable commodity, and I have never heard it seriously suggested that the financial arrangement is in particular an obstacle in this case. We did open the Export Credits Scheme to Russia, and during the time we have been in office the value of the contracts completed and guaranteed by the Export Credits Department is approximately £6,000,000, on which it has undertaken a liability in the neighbourhood of £3,500,000, some of which Las run off. There can be no doubt whatever that a very large part of that trade has been directly promoted by the existence of the Export. Credits Scheme as applicable to Russian enterprise. While it is true that there is a larger flow of commodities from Russia into this country than from this country into Russia, it is admitted that we have stimulated the volume of our exports in return materially by the scheme. That is the state of affairs at the present time. We have done what we could to bring the representatives of the herring fishery into contact with the head of the Russian Trade Delegation, and I am very willing to continue our efforts to that end because no one can read the reports of the Fishery Board for Scotland without appreciating the remarkable extent to which markets have been lost to the Scottish herring fishery, more particularly in Russia and in adjacent parts of Europe. We will do everything in our power to that end, but the obstacles to any form of direct barter are very great, and can only be overcome in the manner which I have described, and which I regard as not being practical politics.


I hope that the right hon. Gentleman realises that we do not condone the taking of Russian timber—that we do not condone the buying of slave-produced timber.


That may be the attitude of my hon. Friend, but it must be remembered that pretty much the same charge is brought against a wide range of Russian commodities, and, if there is to be any form of barter at all, herrings must be set against some class of goods taken from Russia. Even in recent times, in my experience—and it is a pretty crowded experience, as hon. Member's will realise from the Parliamentary questions in regard to these matters—the charge has been made against a multitude, a whole range, of Russian products. The hon. Member for East Aberdeen (Mr. Boothby) has made his suggestion, and I must reply to the proposal which he has made. The direct form of barter is not, in my judgment, practical politics, although I have a great deal of sympathy with the point raised by the hon. Member. I can make no promise to-night because I am not in a position to do so, but I undertake to make further inquiry into the matter, and I will do my best to bring the fishery interests and the head of the Russian trade delegation together, and we will build as largely as we possibly can upon the 180,000 cwts. of herrings that. were exported last year until we get back as great a proportion as possible of the Russian market for Scottish herrings.


I have been associated with the question of Russian trade since 1921, and I am sure that the House will absolve me from any desire to Burke the question of trade with Russia. I was one of the first to hold out the hand of friendship to Russia, and in return I was treated—or perhaps the nation was treated—with the contempt they reserve only for the people who show them friendship. America, which all through has treated the Russian Soviet Government with contempt and contumely, has received far more favours from Russia than ever we have been able to achieve. The fact is that when you show favour to Russia they think: "This is the kind of people we can kick." They proceeded to kick us with a venom and vehemence over a period of years, and we suffered it until our patience ultimately became exhausted. Then there came into power a Govern- meat weak enough to resume relations with Russia, the Soviet Government having declared that the only support they would give to Mr. Ramsay MacDonald—I am using the term that they used—wae that which the noose gives to the man who is to be hanged. That is the kind of contumely with which they beat people who are friendly to them. To those who are their enemies they kow tow, and give great advantages and benefits.

I suggest that the right hon. Gentleman should show some stiffness in this matter. He has shown great courage with regard to other matters. He has entered into negotiations immensely more difficult. He has sought to bring the European countries into the position of having no tariffs against each other. He has collected the nations together and has proposed that the tariffs should be broken down and then, having induced many of the leading nations to raise their tariffs against us, has agreed that we should remain with no tariffs against them. Even then, he only succeeded in getting the nations of Northern Europe to come to some kind of arrangement. The man with the courage and optimism and enthusiasm which the right hon. Gentleman has showed in that matter might perhaps take a definite attitude on this simple matter.

What is the propositon? Here is a country, Russia, which desires above all to be able to sell her goods in the best possible market. But ours is the easiest market for them. Without our market, where would they be? We are a market to-day for Russia to the extent of £26,000,000 a year, but, on the other hand, we are only able to sell to them the comparatively small amount of about £5,000,000 or £6,000,000. Is it not possible to say to them that, unless they take more of our goods, we are going to take fewer of theirs? Is it not possible to meet the Russian plenipotentiary, and say to him: "We are going to adopt a new attitude. You are not in the position of any other Government in the world, for other Governments trade with us through their nationals. Every person in America is free to send their goods into England, and so is France and Germany. You adopt an entirely different attitude. You confine the whole trade of Russia in your own hands. You are in absolute control. It is for you to say what you are prepared to do. Are you prepared, or are you not, to take more of our goods in exchange for those you send to us, because if you are not, we must begin to consider what we are going to do about it. We are not going to allow you to send us all this enormous quantity of commodities you are sending us to-day unless you consent to take more of our goods. As one Government to another that is our ultimatum to you?" What could Russia do under those circumstances? Could she forgo her trade with us? Where would she find a market for the £26,000,000 of goods she is sending to us to-day? Who is going to take those goods from her? America has decided to shut out timber—


On moral grounds.


We no longer consider moral grounds. There was a time when we became excited about slave labour, but no longer is that so under a Socialist Government which has professed these ideas of humanity—ideas which were going to cover the whole world. Here are the very people who maintain a condition of slave labour in Russia, because without our market that condition never can be maintained.

I suggest to the President of the Board of Trade that he has here an opportunity for negotiations such as he cannot find in any other country in Europe. Let him abandon his futile efforts to induce other countries to reduce their tariffs, and let him for once try to do something for British trade, something real and material. Let him say to Russia definitely and firmly, "We take no goods from you except in exchange for what you take from us."

Adjourned accordingly at Twenty-nine minutes after Eleven o' Clock.