DEBTS CLEARING OFFICES AND IMPORT RESTRICTIONS ACT, 1934. (Hansard, 24 February 1936)

§ The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison)
I beg to move: That the Clearing Office (Spain) Order, 1936, dated the ninth day of January, 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 twenty-second day of January, nineteen hundred and thirty-six, be approved. The Order explains itself, and I have not the least doubt that hon. Members have seen that the purpose of this Order 215 is to give effect to an agreement between His Majesty's Government and the Spanish Republic.
The object of the Agreement is to provide a means of liquidating a debt that has accrued in trading accounts between the two countries. The method taken is that of a Clearing Office. His Majesty's Government hope by this Agreement with the Spanish Government, if the House approves this Order, that we shall have this debt owed by Spanish traders to our traders liquidated in a short time. As soon as the debt is liquidated, and as soon as payments are made without delay by Spain to our traders, this Order will cease to have effect and trade will resume its normal relations.

§ Mr. PETHICK-LAWRENCE
Though I am not enamoured of the proceedings under these Clearing Agreements, which in the main are restrictive and inconvenient, the explanation which the hon. Gentleman has given on this particular use of the system seems to remove it from the category of permanent and injurious restrictions on trade. I am glad to hear that it is intended only to be temporary, and I hope that it will not be long before it can be dispensed with. I would like to ask whether as this Agreement was made with what is now the late Spanish Government, any attempt has been made to obtain the views of the present Spanish Government on this matter?

§ Mr. PETHERICK
Even at this time of night an Agreement of this kind should not be passed without comment. I should like to make sure that we are on safe ground in this Agreement. I understand that we are owed a considerable amount of money by Spanish traders, and that all sums due to Spain are to be paid into the Bank of England for the Account of the Anglo-Spanish Clearing Control by the Treasury. I understand that these sums are not to be applied to all the debts due to the United Kingdom from Spain. We are taking moneys due to Spain for the benefit of our own subjects who are owed money by Spanish subjects. This is an improvement on the Italo-British Agreement concluded about a year ago, which I thought then was an unfortunate 216 Agreement so far as British nationals were concerned. Under the Italian Agreement, debts in respect of goods passed through the Customs prior to 19th March did not come into the sterling agreement. I hope this is not a parallel case. The result under the Italian Agreement was that those British subjects who were owed money in respect of goods passed through the Italian Customs prior to 19th March have not received their money, and they are likely to be obliged to wait a long time until the present international debts with Italy are settled

§ Mr. DEPUTY-SPEAKER (Sir Dennis Herbert)
I think the hon. Member is now going too far. He can discuss the Order now before us, but not one that was dealt with a long time ago.

§ Mr. PETHERICK
I am sorry. I was trying to make a parallel case. We have had little time to consider this Order, and I hope we shall have from the Financial Secretary an explanation that this Agreement will facilitate debts due at the present time and prior to the date named in Agreement to British subjects, and will not, as in the case of the Italian Agreement, invalidate debts prior to the date named.

§ Mr. W. S. MORRISON
In reply to the hon. Member opposite I would say that this Order was made on 9th January, and has been in operation since 13th January. In respect of it negotiations have been continually going on with the Spanish side, and though there has been a change in that Government there has been no change in the policy of that Government with regard to the observance of this Order. In reply to the hon. Member for Penryn and Falmouth (Mr. Petherick) the operation of the Agreement is as follows: After the date when it came into force, 13th January, it covers all outstanding debts at that date. In regard to other debts contracted after that date, only debts on account of the sale of United Kingdom goods and certain other specified debts will be included in it. The interests of our traders are adequately met. Assuming that our trade with Spain remains the same as it is at the moment, that is, favourable for Spain, we hope that there will come into this Account in the Clearing Office sufficient sterling to liquidate the debts 217 within a measurable time. After that has been done we shall resume normal trading relations.