DEBTS CLEARING OFFICES AND IMPORT RESTRICTIONS ACT, 1934. (Hansard, 15 December 1936)

§ Lieut.-Colonel COLVILLE
I beg to move, That the Clearing Office (Turkey) (No. 2) Order, 1936, dated the twenty-seventh day of November, nineteen hundred and thirty-six, made by the Treasury under the Debts Clearing Offices and Import Restrictions Act, 1934, a copy of which was presented to this House on the seventh day of December, nineteen hundred and thirty-six, be approved. We have been dealing for some hours past with the question of beef and veal. I wish now to turn the attention of the 2418 House to Turkey. This Order provides for the establishment of an Anglo-Turkish Clearing Office, for the payment to that Office of debts due for Turkish goods imported into the United Kingdom, for the disposal of the sterling collected by the Clearing Office in the manner provided by the Agreement of 2nd September, 1936, between His Majesty's Government and the Turkish Government, and for the administrative measures necessary to secure the observance of the Order. Briefly, the position is this: Prior to the agreement of 2nd September trade payments were regulated by the Anglo-Turkish Payments Agreement of 4th June, 1935, and that Agreement provided that debts due from Turkey for United Kingdom goods imported into Turkey should be paid in Turkish pounds to a special account at the Central Bank of Turkey. On the other hand, debts due to Turkey from the United Kingdom for Turkish goods imported into this country were payable into a sterling account at the Bank of England. Payment by United Kingdom debtors to the sterling account was not, however, compulsory, and the account, therefore, received only part of the sterling due to Turkey, with the result that arrears accumulated, and by September of this year they had accumulated to the equivalent of about £1,000,000 sterling. Long delays were therefore being experienced by exporters in this country in receiving payment for their goods exported to Turkey. To remedy this position, a new agreement was made providing for the establishment of an Anglo-Turkish Clearing Office to which it would be compulsory for United Kingdom debtors for Turkish goods to pay their debts. In view of the delay which had previously occurred in securing payment by United Kingdom exporters to Turkey, the establishment of a compulsory clearing, which was desired by the Turkish Government, was considered essential for our trade.
I have a word of apology to offer to the House. A Treasury Order was made on 8th September, and under the Debts Clearing Office and Import Restrictions Act of 1934 this Order should have been laid before, and approved by, Parliament by 29th November, that is, within 28 Parliamentary days of the making of the Order. I regret, however, that by a pure oversight this was not done, and the 2419 Order lapsed on 29th November. The Act, however, provides for such eventualities and provides that such lapsing of an Order shall be without prejudice to anything done under it or to the making of a new Order. The position, therefore, was regularised by the making of a new Order on 27th November, to operate as from 30th November, and that is the Order which we are laying before the House to-night. These clearing offices are not a desirable expedient if they can possibly be avoided, but the Turkish Government have for some time insisted that foreign trade should be conducted in this way, and for over a year what was happening was that a clearing was in existence with Turkey which was effective only at one end. We want to make it effective at both ends, and that is what this Order does.

§ Mr. BENSON
I must say that I was rather surprised at the careless apology which the Financial Secretary threw to the House for what is really a grave dereliction of Parliamentary procedure. These Orders are made under the Act of 1934 and they must be approved within 28 Parliamentary days or lapse. That approval is not merely a conventional piece of machinery; it is something a great deal more than that. It is a safeguard given to this House so that it may control and check the actions of executives; but so little do this Government care about the rights and privileges of this House that they actually forgot about it; and when they do put themselves right all they have to offer is a very casual apology offered with a smile, as if the matter were a joke. One would have thought that on this particular Order the Treasury would have been especially prompt to see that it had early sanction from the House.
This Order was made on 8th September, seven weeks before the meeting of Parliament, in non-Parliamentary time, but one would have thought that when Parliament laid down that an Order shall not run for more than 28 days without Parliamentary sanction an Order which had been running for seven weeks without Parliamentary sanction would be submitted for sanction at the earliest possible moment. Instead, the Government have run the Order for 28 days, and, 2420 indeed, 44 days of Parliamentary time will have elapsed before this Order will have received sanction. In the face of those dates the House ought to have had a far more serious apology than was offered by the Financial Secretary. He said they had forgotten it, but as a matter of fact they did not forget it later than the 27th November, because the Order set forth is dated then. However, it was put on the Order Paper of the House of Commons only last week, 10 days or a fortnight after they had recollected, and the Order itself was available to Members of this House in the Vote Office only yesterday. It is true that it was laid on the Table of the House, but it was only available in the Vote Office yesterday. When they did recollect they might at least have taken steps to see that the matter was brought to the notice of the House at the earliest possible moment.
With regard to the Order itself, like all these clearance Orders, it can operate only if the imports into this country are as great as or greater than the exports from this country. Exporters can receive payment only as a result of the accumulation of a fund from imports sufficiently large to pay them. In the case of Turkey the reverse is the position. Our exports to Turkey are greater than our imports from Turkey, so that in no circumstances, while that balance of trade exists with Turkey, can we pay the total amount of the debts due from Turkey to this country. In this Order, we find that the normal trade situation is made worse.
Before I pass to that point, I would mention that the last trade figures obtainable, those for 1930–34, show a balance of trade for those five years of £1,000,000 between ourselves and Turkey, which is, in fact, an adverse balance for the Clearing Account of £1,000,000. In this Agreement which we have entered into with Turkey, only 70 per cent. of the total amount of money due from imports from Turkey, to be paid into the Clearing Account for the payment of debts to this country, is available. The other 30 per cent. is earmarked as money for the Central Bank of Turkey. Not only have we insufficient imports from Turkey to pay for the exports, but of the imports that come in, 30 per cent. is taken out of the Clearing Account and is not available for the pay- 2421 ment of debts to this country. I am not sure, although it may have the effect of making some sterling available, whether it is not likely to be more harm than good. Had there been no agreement at all exporters to Turkey would have realised that they were exporting at their own risk. With a clearing house there may be an entirely false sense of security. Exporters may feel that the existence of a clearing agreement means that they will get their money. Under the Agreement as it stands they cannot possibly get more than 70 per cent. of it. The clearing agreement into which the Government have entered makes it by no means certain that English ex- porters to Turkey will receive payment.

§ Lieut.-Colonel COLVILLE
I hope that the House will not think, because I spent a short time in apologising to-day for the oversight as a result of which this Order was not taken earlier, that I did not sincerely apologise for the situation. The hon. Member must not imagine that errors of this sort do not take place even in the best regulated Departments. If some day he finds himself in a position of responsibility in any of the Departments, I am sure that he will realise that errors occasionally take place. I would correct him in one respect. The Order has been available to hon. Members since 7th December.

§ Mr. BENSON
I applied for it at the Vote Office on Wednesday last, and they had not got it and had never heard of it. I wrote to the Stationery Office, and although there were two or three days in which I might have received it, I received it only this morning.

§ Lieut.-Colonel COLVILLE
I am sure that the Order was available on 7th December, and I will look into the matter of the hon. Member's experience. I agree that when Parliament has set down machinery for dealing with an Order of this nature the machinery should be strictly complied with. I have told the House that this was an oversight. In regard to the point which the hon. Member raised about the balance of trade with Turkey, it is the case that in former years the balance was quite perceptibly in favour of this country, but that tendency has decreased until, in 1935, the balance of trade was very close 2422 between exports and imports. In the first nine months of this year the balance was still very close, but was slightly in favour of this country. Imports from Turkey are, however, heavier in the last quarter of the year, so that it may well be that the balance will be of a different nature over the whole of this year. At the same time I agree that exporters should be rather cautious, and should not rush into trade in the belief that payment will be made certain because this Order has been made. I would join issue with the hon. Member on the point that the Order will make no difference to traders' prospects of payment. What used to happen under the voluntary clearing arrangement was that many people who imported goods into this country from Turkey paid for them, not through the special account in this country, but direct to the exporters with whom they had trading relations, so that the special account did not receive all the sterling it should have done. Any information that hon. Members may wish to have on this matter they can readily obtain from the Clearing Office, which is in Cromwell Road, opposite the Natural History Museum.

§ Mr. BENSON
Does not the Financial Secretary agree with me that a mere equalisation of our trade with Turkey will not meet the necessary balance, but that, in order to meet the 30 per cent. of free money for the Bank of Turkey, we shall have to have an adverse trade balance with that country of something like 50 per cent.?

§ Lieut.-Colonel COLVILLE
The question of the 30 per cent. is not a new feature; it was in the earlier agreement of a year and a half ago. A certain free balance was left to Turkey for non-commercial payments. I am quite sure that the arrangement which has been made is much the best that can be made in the interests of exporters in this country, who up to the present have experienced serious delays in getting payment. At the same time I would re-echo what the hon. Member has said about the need for some degree of caution in trading with Turkey.