§ Considered in Committee under Standing Order No. 69.
§ [Sir DENNIS HERBERT IN THE CHAIR.]
§
Motion made, and Question proposed,
That it is expedient—
§ 12.35 p.m.
§ Mr. R. S. Hudson (Secretary, Overseas Trade Department)It would, perhaps, be convenient to hon. Members if I gave a very brief sketch of the history of this particular Department. In 1919 the Government of the day were very anxious, as might be expected, to do everything possible to re-establish as quickly as possible this country's export trade, and among the measures that they took was one empowering the Board of Trade to make advances to exporters in respect of the value of orders shipped to certain countries, particularly those in Central and South Eastern Europe, where financial and commercial conditions had, of course, been completely disorganised by the War. The advantage taken of that Measure was very small, and therefore in 1921, a different method was tried —that of guaranteeing bills drawn by traders. Judging by the response between 1921 and 1926, that method did not seem to meet the requirements of export traders in this country. A Committee was set up to consider the matter, and as a result of its report, the system of guaranteeing bills drawn by traders was replaced by a standard form of contract which in its essentials, corresponded to an insurance policy. That scheme was very much more successful, and the Select Committee on Estimates, in 1928, reported that the facilities then granted by the Export Credits Department were of substantial advantage to the traders of this country. They were in favour of 2137 the continuance of that work, they suggested that commercial accounts should be published every year to show the actual results of trading and they were particularly anxious that the Department should be made entirely self-supporting. The Government accepted those recommendations, and certain changes in the Department's organisation took effect from 1930.
The essence of the guarantee which is given by the Department in favour of the exporter is that, in return for a premium paid by him, the Department will guarantee him against 75 per cent. of any loss that he may incur as a result of failure to receive payment from his buyer, whether that failure is due to a default of the buyer or to some interference with the ordinary channels of payment arising out of exchange restrictions imposed by the Government of the country in which the buyer lives. Two methods are followed. By the first method, the Department issues what is called a comprehensive guarantee under which the exporter in this country asks for cover for the whole of his turnover, the Government Department then guaranteeing 75 per cent. of losses arising from the insolvency of any of his buyers abroad.
The second method is known as the transfer risk. Exporters in this country, provided they sell in sterling and not in the currency of the country of the buyer, are guaranteed against the risk of frozen debts. So much for the machinery. If hon. Members will look at the White Paper which was issued under the heading "Memorandum Explaining the Financial Resolution," they will see that in the last four years the traders of this country have been taking advantage of these facilities to an increasing extent. For example, in 1933–34, we covered £7,500,000; in 1934–35, £15,000,000: in 1935–36, £20.500,000, and in 1936–7, the figure had risen to £35,000,000. I would like to emphasize that all that business has been done, in accordance with the suggestion of the Estimates Committee in 1928, at no cost to the Exchequer, and over the period there has been a slight profit which has been paid into the Exchequer.
§ Mr. HudsonI will find out and let the hon. Member know. The Committee will also note that at the present moment 2138 we are working subject to Statutory limitations both as to date and amount, arising from the fact that at the beginning, quite rightly, the Department was regarded as experimental. The limitation as to date is that no guarantee shall be issued after March, 1940, and no guarantee shall be issued in any case which will not expire by March, 1950. The limitation as to amount is £26,000,000. I think the experience of the last few years has proved that this Department may now be properly regarded as part of the permanent trade facilities available in this country for the assistance of British exporters, and it is for that reason that I am now asking the Committee to sanction the abolition of the limitation as to the date. As regards the limitation of the amount, the figures I have quoted show that traders in this country are taking advantage of this scheme to an increasing extent, and the position now is that if something is not done we shall have reached the permissible limit of £26,000,000 and shall be compelled drastically to curtail the facilities which we are at present able to offer to British exporters.
The facilities cover, in the main, consumable goods, where the credit required is comparatively short—three months or so—and naturally the liability soon runs off. There is a further development which, I think, is of considerable value, that is to say, medium-term guarantees for credits extending from one year to five years, which are naturally rather shorter than the credits available in the case of a long-term loan, but are at the same time considerably longer than those normally required for consumable goods. It has been found that these medium-term guarantees are of great value to traders in this country in that they enable them to do business with foreign Governments, and the goods covered by these medium-term guarantees range from an order for a single motor truck to one for a complete iron and steel plant. I hope I have said enough to show the Committee that there are great advantages in continuing this work, and to justify me in asking for the limit of £26,000,000 to be raised to £50,000,000.
We propose, also, if the Committee pass this Financial Resolution, to take advantage of the opportunity to consolidate the existing powers of the Department which at present are scattered over many Acts 2139 of Parliament. Apart from the original Act of 1919, Acts were passed in 1922, 1923, 1924, 1926, 1929, 193o and 1934. We propose to bring in a Bill to consolidate those Acts and at the same time to make one or two minor alterations and modifications which our experience has shown to be useful and desirable. It would be out of Order to go into the details of those modifications now, but I will, of course, explain them fully when we come to discuss the Bill. It will, perhaps, suffice to say here first that they will deal, with a change in the Title of the Act. Secondly, they will widen somewhat the scope of the scheme as to the firms whom we are allowed to help and the goods which we are allowed to cover. They will also enable us to cover expenditure in the countries of the buyers, where that expenditure is a necessary part of the placing of contracts for capital works abroad with exporters in this country. Finally, in order to make the cover granted by our guarantees formally complete, we propose to provide that if the emergency arises any losses shall be paid out of the Consolidated Fund in so far as they are not met out of moneys voted by Parliament.
That is a brief review of what we propose. I would like to add something on the question of the continued need for the existence of this Department. In 1919, the Department was set up originally in order to help British firms to overcome and withstand the difficulties and hazards attending international trade as a result of the disorganisation caused by the War. Many of those difficulties have disappeared and others have diminished with the passage of time, but I am afraid that their place has been taken by others, different in nature perhaps, but none the less serious in the obstacles to trade which they present. The Department is, I think, required to help in getting over those difficulties. Earlier Debates this week have shown that agreement exists on all sides of the House of Commons as to the necessity for not merely maintaining but increasing our export trade. I think I shall have the general agreement of hon. Members on the proposition that, while times are good, we ought to neglect no opportunity of broadening the foundations of that export trade, so that if the time comes, as some people anticipate it 2140 may come in two or three years, when the home demand decreases, we shall have laid those foundations on proper lines, to enable openings to be found abroad to compensate for any decrease in the home demand.
In my opinion the newer and lighter industries which have developed in this country in recent years, will particularly need those new openings. Industries of that type will need our assistance, because they have not had the long-accumulated experience of the creditworthiness of buyers abroad, which older-established firms and businesses possess. While the newer and lighter industries, therefore, will definitely need our assistance, the heavier industries, as I have already said, find these medium term guarantees of great advantage. In two or three years time, I believe, they will find those arrangements of even greater benefit if, as some anticipate, the home demand decreases. I submit to the Committee that to deprive ourselves at this moment of a weapon which has proved valuable for the last few years and is likely to prove even more valuable in a few years time, a weapon which has been forged and used at no cost to the Exchequer, would be exceedingly foolish. Therefore, with great confidence I commend the Resolution to the Committee.
§ 12.51 p.m.
§ Mr. Pethick-LawrenceI believe that this is the first occasion on which the hon. Gentleman has made a speech to us in his new capacity, and he will allow me to tender him my congratulations upon his promotion to the office which he now holds. I would like to couple with those congratulations an expression of pleasure at the extreme lucidity of his speech, and the fact that he has been able to explain the provisions of this proposal to us without too much attention to notes, which often mars the effectiveness and clarity of speeches made from the Government Bench. I wish also to congratulate the hon. Gentleman on the fact that he holds an office concerning the work of which there is little controversy between the two sides in this Committee. It has not in the past caused any divergencies of opinion between the party represented on the benches opposite and the party represented on this side, except on one or two matters concerning the extension of 2141 this proposal, and the necessity for this has now been admitted on all sides. In fact, this export credit scheme has been built up by Governments of both parties. Successive Governments as they came into office have co-operated in working out and extending this scheme, and therefore no party controversy arises on this subject, and certainly, from our point of view, none arises in relation to the proposed extension.
We welcome the valuable work of the Department since its inception. We are glad to note the particulars set out in the White Paper showing the great progress made in the use of these facilities during the last few years. I confess that when I first saw these figures I was astonished that the growth had been so rapid. In 1933–34 the value of the exports covered by the guarantees was only £7,500,000, but in 1936–37, three years later, it amounted to over £35,000,000—an almost five-fold increase in three years. We on these benches share the view of the Minister that that growth is a healthy sign. It proves indisputably that the traders of this country welcome and make full use of this scheme, which successive Governments have built up and put into operation.
The Minister comes here to-day and asks us, in view of the success of the scheme, that the obstacles to its further growth should be removed, and I cannot understand anyone, recognising the value of this facility and recognising that so far from being a cost to the Exchequer it has actually brought in revenue, being so churlish as to deny the Minister the opportunity of enlarging these proposals in such ways as may be necessary. This afternoon we are concerned only with the Money Resolution, and although the Minister sketched out to us briefly what the Bill will cover, the actual details will have to be filled in, and we shall not be able to judge precisely what it is intended to do until we see the Bill before us. But in so far as I understand what the Bill is to do, I do not think the Minister need fear any opposition from this side of the House; on the contrary, it should receive our welcome. The proposal to remove the limit of date seems to me quite sound, and the extension to 50,000,000 also seems rendered necessary by the fact that the facilities in use are 2142 already pressing hardly upon the £26,000,000 which has been the figure up-to-date.
With regard to the question of putting the charge on the Consolidated Fund, I understand that it is, as it were, painting the lily, giving added assurance to the bona fides of this House, and making sure that future Houses of Commons will not refuse what it is the intention of the present House to grant; but we shall no doubt have an opportunity of disussing that matter more particularly when the Bill is introduced. As I said before, the Department of Overseas Trade is one in regard to which there has been a very small amount of cross purposes between the two sides of the House, and this Bill is certainly not one which we shall have any desire to obstruct or to oppose. This Money Resolution, which is the first stage in the introduction of that Bill, will therefore have our full support.
§ 12.58 p.m.
Major HillsI want to add a very few words in support of this Resolution. I had the honour of succeeding Colonel Sir Sidney Peel as Chairman of the Committee to which my right hon. Friend has just referred, which was set up in 1925. Colonel Peel, as he then was, was sent to China on Government business at that time, and I took his place. That Committee practically formed the scheme which has been so successfully operated. I will not refer to its earlier history, for it is rather an unhappy one. It filled a gap perhaps in the post-war conditions, but a good deal of money was lost there-under. Since the new scheme, initiated in 1926, has been in operation, a profit has been made by the Exchequer, and very great assistance has been given to business men in this country. We came to two conclusions as to the form which assistance should take. The first was insurance up to 75 per cent. of the loss to the exporter. We felt that obviously the exporter ought to bear some part of the loss, but we insured him against three-quarters of the loss, and that insurance was given without recourse to him. The second form of assistance that we recommended was a guarantee by the State of the bills which he received for the goods exported, a guarantee up to 75 per cent. or so, but here there was recourse to the exporter, if the buyer failed to pay him. The exporter got the advantage that he could negotiate that bill with his bank.
2143 The business has been extremely well conducted, and I wish to pay a strong tribute to the branch of the Civil Service that is conducting the export credits scheme. It has been very useful. It has filled a gap between the schemes that were too speculative for anybody to guarantee and, at the top of the scale, schemes wherein the exporter of the goods could get assistance from his bank. There was a real gap there, and this scheme, which was initiated by the Committee in 1926, showed that insurance could cover those classes of cases and cover them without risk to the State. We were told at starting by some of the witnesses that there was no such middle land and that export schemes were either good or bad, that if they were good, the banks would guarantee them, and that if they were bad, they were not worth having. The experience of the Export Credits Department has disproved that contention and shown that there is this middle land where guarantees are safe and where they are extremely useful and can be given without loss to the State.
I entirely approve of the raising of the limit from .26,000,000 to .50,000,000, but there is just one question that I should like to ask my hon. Friend. The original Act only authorised the giving of guarantees in connection with the export of goods wholly or partly produced or manufactured in the United Kingdom, excluding munitions of war. In the Resolution on the Paper the exclusion of munitions of war remains, but the limitation of guarantees to goods manufactured in this country is not included. Is it intended to extend the guarantee to the export of all goods? I agree that there is a strong case for that, but, of course, it is extending the intention and operation of the original Act, and I should like an explanation of it. I believe that trade in goods not manufactured in this country is a valuable trade, and there may be a strong case for extending the guarantee to cover that class of business. Finally, may I join with the right hon. Gentleman opposite in congratulating my hon. Friend the Secretary to the Overseas Trade Department, whose career I have always followed with admiration and sympathy? I am delighted to see him in his present post, and I agree with the right hon. Gentleman that he has made a very good beginning.
§ 1.5 p.m.
Miss WardI also, should like to offer my congratulations to my hon. Friend the Secretary to the Overseas Trade Department, and I hope he will lend sympathetic consideration to the points that I have to raise. We are all impressed with the valuable work which the Export Credits Department has done, and we hope that with an extension of its powers it will prove even more beneficial to industries in this country than it has been in the past. I rise to make a comment on behalf of one industry which, owing to a decision of the Cabinet, has not up to the present been able to take any benefit from the Export Credits Department, but which feels now, particularly with regard to its future, that it is entitled to the same consideration as other industries. I refer to shipbuilding. There is no provision in the Bill which prevents the granting of credits to shipbuilders in the same way as to other industrialists, but ever since the withdrawal of the Trade Facilities Act the Cabinet has taken up the position that it is not in the interests of industry in this country that shipbuilders should partake of the benefits of this provision.
I will give an illustration. A few years ago Poland wished to build two important transatlantic liners in this country at a time when shipbuilding here was at its lowest ebb, when our skilled men had had no employment for many years and there were practically no orders to be obtained. The shipbuilding industry of this country was very anxious to take this order, but it was refused because no guarantee or credit could be given to the industry on the ground that it was not desirable to add to the surplus world tonnage. I spent a long time going from one Government department to another. I informed the Board of Trade I understood that if an order were not placed in this country it would go to Italy. I was told by the Board of Trade that that kind of story has been heard before, and they were of opinion that if we did not grant facilities to shipbuilders in this country these two liners would never be built. Anything that I said naturally made no impression on the Board of Trade, but the fact remains that these transatlantic liners were built by Italy, and they are now sailing on the high seas. Poland paid Italy in coal, and as far as I can see there was no advantage of any 2145 kind to this country. What is far worse, Italy has now got orders from Poland for shipbuilding which she is likely to continue to obtain, and Poland has got her coal into the Italian markets in which previously we had a great deal of trade. There is still the increase in world tonnage, and the workers to suffer were not only the shipyard workers of this country, but the miners as well. I put that forward as an illustration of the fact that whether the surplus tonnage argument is logical or not, we have been a loser all round.
Years have gone on. It is true that the shipbuilding industry is looking up considerably but, as my hon. Friend pointed out, we are not only concerned with laying the foundations of trade for the present, but with laying the foundations of trade for the future. At the beginning of this year we were in negotiation with Turkey for an order to build 15 ships—a very valuable order. I did not take it that the ships were to be run in competition with this country, because some of them included ferry boats to be used on the Bosphorus. We have made every attempt to induce the Overseas Trade Department to regard our claim for credit facilities as substantial, but up to the moment we have not succeeded, and eight of those ships have gone to Germany. It was not a question of price. Our shipbuilders are to be congratulated on the fact that their price was better than that at which Germany were prepared to build. Turkey, however, had had a difficult time financially, and consequently was not in a position to accept the whole financial responsibility of paying for such a large order immediately. The result was that eight of these ships went to Germany. We continued to negotiate, but the Government remained adamant, and subsequently the rest of the order went to Germany. I cannot see what advantage there can be to anybody in the world except Germany. There are other orders coming from Turkey to this country, and I am hopeful of persuading my hon. Friend to reconsider the whole position with regard to shipbuilding.
The other point that may be argued is that we should not give guarantees for the building of ships which will run in competition with the shipowners of this country. I agree that there is probably a substantial point in that argument. I would point out, however, that a large 2146 proportion of other orders which have been guaranteed have been for things which are, in any event, going to be in competition with other industries in this country. I would refer my hon. Friend to the agreement which has just been signed between Turkey and the iron and steel industry in this country. I simply cannot understand why it should be any worse for this country to build ships for other countries which will run in competition with the ships of this country than for us to guarantee, provide and set up iron and steel works in Turkey which will operate in the world markets, presumably in competition with the iron and steel industry in this country.
We have recently sent out one of our colleagues as chairman of the Export Credits Department in China. Am I not right in saying that some of the assistance which we are, presumably, to give to industrialists in China in one way or another, such as textile machinery and things of that kind, will be used in competition with certain manufacturing interests in this country? The whole basis of argument which has been used against shipbuilding could equally be argued against the credits which are given for other industries in many instances, except in the one point of surplus world tonnage. As long as the tonnage is added to the world, I do not see that we are assisting by not building it ourselves. We like, however, to act according to tradition and, as we argue that surplus tonnage should not be produced, to say that we cannot very well produce it ourselves. There are wider considerations than that to be taken into account.
There is one other point which, I think, is of importance. In a recent speech the chairman of Swan Hunter and Wigham Richardson specifically referred to the difficulties with regard to export credits. He stressed the point which was stressed by my hon. Friend to-day and has been emphasised on many occasions by Mr. Runciman as President of the Board of Trade, that we have to lay foundations for the future. We know very well that many of the difficulties of our shipbuilding industry in the past few years have been due to the fact that many countries which previously were not competitors in shipbuilding have started building ships of their own. There are now shipyards in Holland, in Sweden, 2147 and in Italy, and we know that nearly every Government is subsidising the shipyards of its country. We are not asking for that, but only for the same kind of help, the same kind of credit, to be available for this one important industry as is being given to other industries. I would refer my hon. Friend to the speech made by the chairman of Swan Hunter and Wigham Richardson on this very important point, and I hope that after mature consideration he will agree that the provisions of this Bill shall be extended to that industry.
We who represent the shipbuilding industry—practically, if not technically—feel that we have had a very hard deal. It is important that we should continue to be the nation which builds ships for foreign countries. When our rearmament programme has been carried out we shall be in the same position as we were a few years ago, depending upon shipbuilding orders from foreigners, and if foreign countries which have been our customers are tied up with financial supports and subsidies which they have got from other foreign shipbuilding countries there will not be the slightest chance of our getting back into their markets. Therefore, I hope that my hon. Friend will give real and grave consideration to this point, and that he will be able to persuade the Cabinet to lift this ban and to give us what we think is our right: equal terms with the other big industrial undertakings in this country.
§ 1.18 p.m.
§ Mr. LewisI was glad to hear from the report given to us this morning by the Secretary of the Overseas Trade Department how useful this system of export guarantees is proving and how, in consequence, demands for the facilities are increasing. I think it argues a certain lack of enterprise on the part of the City of London in general, and the banks in particular, because if the Government can carry on this business without making a loss, I should have thought that some of our great financial institutions ought to have been able to undertake it and to make a modest profit. But the gap did in fact exist and the Government, with general approval, stepped in to fill it. I doubt whether any member of this Committee would object to the contention of the Secretary of the Overseas Trade 2148 Department that the time has now come for the introduction of a Bill to consolidate the various Measures dealing with these matters, but before we agree to this Financial Resolution we are entitled to ask for a little further information.
This system of export guarantees is, as has been explained, in effect a system of insurance, and in all insurance business two things have to be borne in mind if it is to be conducted properly. The first is that the premiums collected should be greater than the claims paid and the expenses incurred, and the second is that the risks of the business should be so evenly spread that there will be no fear that some one heavy loss at a future time may upset the calculations which have been made. As to the point about income from premiums covering the claims and expenses, the Memorandum circulated to explain the Financial Resolution is not very informative. It merely states that these guarantees have not involved any charge on the taxpayers, as the premiums received had exceeded the claims paid and the administrative expenses. That might indicate a profit of a few hundred pounds or a profit of millions. When I made an interjection just now the hon. Gentleman was kind enough to say that he would give us the correct figure, and that he thought it was in the neighbourhood of £1,000,000. I think a figure of that kind on the information given to us, would be not unreasonable.
I would point out, however, that whatever the figure—let us assume that it is £1,000,000—it does not tell the whole story, because it takes no account of cases in which importers have failed to meet their obligations and are in arrears with their payments but in which the Government have not yet paid claims. I understand that on 31st March last there was under this head some £210,000 which should have been paid to the exporters of this country. It is overdue, but the Government have not as yet paid any claims, and therefore no part of it is brought into consideration when the Government estimate the profit made in the past year. It may be that only a small portion of that total will prove an eventual loss to the Government, but it will be evident that we must bear in mind facts like that in coming to a conclusion as to the financial results of the operations. I do not think it is reasonable to 2149 leave those figures out of account, and merely to give us the statement that so far there is a balance on the right side.
Major HillsI am sure it is the case now, as before, that the premiums paid not only cover the losses and the expenses of management, but also provide an insurance reserve against unascertained risks. That is a condition of all insurance.
§ Mr. LewisI was not aware of that. Perhaps the Minister in his reply will enlighten us on it. With regard to the point that risks should be evenly spread, it must be evident to the Committee that if precautions are not taken there may at some time be a disproportionately heavy loss which will upset the balance of the fund altogether. For example, it would be possible to do a large and profitable business with a particular country over a number of years, and for there then to be a complete cessation of payments from the country, owing it may be to the outbreak of a war or to an internal revolution. It might be impossible to recover the money in future, and a dead loss of great magnitude might be incurred. There has been a marked reluctance on the part of the Government to give information to the House on this question. I contend that we are entitled to have information. Last Monday I asked the following question of the Secretary to the Overseas Trade Department:
What is the greatest total liability of the British Government at the present time in respect of exports guaranteed to any one foreign country?The answer which I received was:In the interests of British trade, it is not considered desirable to state the amount due at any particular moment by any particular country."—[OFFICIAL REPORT, 7th June, 1937; col. 1421, Vol. 324.]Members of the Committee will notice how deliberately disingenuous that reply is. I did not ask the name of any country. I asked that we might be told the greatest individual risk, that is to say, the greatest amount of liability outstanding in respect of any one country, no name of any country being asked for. Surely it is obvious that, if we are to form an opinion as to the risks of insolvency in this business, it is material to ask the extent of risk that we are undergoing in respect of any one country, compared with the total business done.2150 I would press for that information, to which, I think, we are entitled, and I hope that, before the Debate concludes, the question will be answered.
The only thing I wish to say about these proposals is that we are asked to give the Government power, in effect, to double the total amount of their operations by raising the £26,000,000 to £50,000,000. I do not think that anybody would claim, having regard to the information which has been given to us this morning, that, in addition to increasing our liabilities in that way, we should also forgo the time limit which ensures periodical parliamentary control of the matter. We were told that the Government wished not to have to come before this House at the end of five or six years, or whatever definite period it is, to ask for further powers, and, of course, to give an account of their stewardship. They desire this thing to be extended to an indefinite period. I suppose it is true to say that all Executives dislike parliamentary control, but I submit that it is for us to insist that the Executive in such matters does submit to parliamentary control. I imagine that an opportunity will arise when the Bill is before us of raising this point as a specific issue, but I wished to take this early opportunity of calling attention to it, because I think it is a matter of great gravity.
§ 1.29 p.m.
§ Mr. HudsonIn replying to the points which have been raised, I would thank the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) for the very kind things he said, especially as he was at the Treasury when this Department in its present form was developed. The right hon. and gallant Gentleman the Member for Ripon (Major Hills) paid a well-deserved tribute to the work of the Civil servants who have run the Department so successfully with entirely new methods and new material and I entirely agree with him. They will appreciate the tribute which he paid to their successful learning of a new technique. He asked the meaning of the alteration in the words about goods. If I am in order in answering his question—the point really arises on the Bill—I would say that under our present system we can insure only consignments of goods, or the turnover of a merchant, when he limits his shipments to British goods.
2151 It frequently happens, as a matter of practice, that a large consignment of British goods includes one or two articles of foreign manufacture. We are, therefore, proposing to take powers to cover such cases but we shall not insure the consignment where more than 25 per cent. of goods are not of British manufacture. We shall also limit the actual cover to the proportion of a merchant's shipments at the end of the year which have been of British origin. The hon. Lady the Member for Wallsend (Miss Ward) also raised a question about shipping. She has for a long period been pursuing this matter with my Department, and has shown much persistence in trying to get advantages for her constituents. She was promised that the matter was being reconsidered. I am afraid it has rather slipped into the background owing to the pressure of work of the Imperial Conference, but I will give her this promise: I will personally, during the next few weeks, make a point of looking into the matter myself to see whether the position has sufficiently changed since 1931 to justify revision.
In case undue hopes may be raised, I would add, in regard to the two particular cases which she mentioned, that I am sure she realises that it does not follow, even if the ban which covered shipping were removed, that it would be possible to grant facilities in those two cases. As Poland wanted to pay in coal, I am sure she will realise that we could not accept such payment without injuring our own coal interests. Turkey was the other case. A very substantial order had been placed in this country through our facilities, but of course, as the Committee on Estimates said, we have to be self-supporting and the question of any further credit to Turkey would have to be considered with due regard to the large credit which had been granted.
Miss WardI think the question of payment by Poland in the form of coal was the second negotiation. The first was upon a basis of cash. I am bound to say that Poland asked for very long credit, longer, I think, than the Export Credits Department approved. When that was turned down, they started on a basis of barter. That is my recollection. As to the orders by Turkey for iron and steel, I imagined that the shipbuilding 2152 negotiations were going on at the same time. I understand that the Export Credits Department sent out some most able Civil servants to Turkey in order that the whole agreement might be upon a sound financial basis, and that they had a most tremendous success. I am entitled to say that, if the Government could give us the same facilities for shipbuilding, the work of the Civil servants might be equally effective.
§ Mr. HudsonThat may or may not be so. At all events, I wanted only to give the warning that, even if the ban were removed, those facilities would not necessarily be granted.
The hon. Member for Colchester (Mr. Lewis) raised a question about surplus profits and the actual surplus accumulated on 31st March, 1936. It is quite true that my hon. Friend was given a figure of some £200,000 that was due on a particular date, but it does not necessarily follow that we shall lose the whole of that sum, or even any substantial amount, because clearly it might include accounts that were only a day or so overdue. But taking the period of the last few years during which the present scheme has been in operation, there is a surplus of some £2,000,000 which has been paid to the Exchequer, which can be regarded as a reserve against any extraordinary loss in the future. My hon. Friend asked whether we were satisfied that there was no undue risk of piling up credits in the case of any particular country, and suggested that we ought to give fuller information here in the House. I would remind him, however, that one of the conditions of carrying on this business is that it is subject to the continuous close control of the Treasury, and also that we have a very strong expert Advisory Committee consisting of independent outside persons who know British trade and who are continually looking after our operations, and we are entitled to look to them to see that the Department takes no undue risk, having regard to all the circumstances of the case, in regard to any particular item.
§ Mr. LewisCannot my hon. Friend answer the specific question that I asked as to the greatest liability with regard to any one country at the present moment?
§ Mr. HudsonNo, Sir. I am sure that my hon. Friend, on reconsideration, will realise that to give that information would 2153 be to give information of very considerable value to our trade competitors in other countries. It really would not help Members of the House, and I hope the Committee will agree that on balance it is desirable to continue the practice we have followed, and refuse to give the amount outstanding in respect of any particular country.
§ 1.38 p.m.
§ Sir John Wardlaw-MilneMy hon. Friend has not dealt, except in one sentence of his opening speech, with a very important part of this Resolution, dealing with the change in the source of the amendment required for fulfilling any guarantee. In future, this is to come from the Consolidated Fund instead of from moneys voted by Parliament. I do not propose to delay the Committee further than to ask my hon. Friend to bear in mind that, when the Bill comes before the House, the House will probably want to know why that change has been introduced. It is one that the House from time to time has looked upon with grave suspicion, and I think the House is entitled to know the reasons which have induced the Government to suggest the change. I would ask my hon. Friend to bear in mind that, when the Bill comes before us, we should like some explanation of the reason.
§ Question put, and agreed to.
§ Resolution to be reported upon Monday next.