CLEARING OFFICES. (Hansard, 1 March 1938)

§ Lieut.-Colonel Colville
The Committee will not wish me to discuss the policy of clearing offices, nor should I be in order in doing so, but I will explain why it is necessary to come for this token Estimate to-night. When the original Estimate for 1937 was presented in February, 1937, the Anglo-Italian Clearing Agreement had been in force for a comparatively short time, and only a very approximate estimate of the amount to be provided for the current year was possible. It happens that additional staff has had to be provided at an extra cost of £3,000, and additional provision was also required for what is called payment to agents; the only agent in question is the Bank of England, which holds the Controller's accounts into which payments are made by United Kingdom debtors. The payments are based on the amount of sterling collected by the Clearing Offices, and since the actual receipts of the Anglo-Rumanian and Anglo-Turkish Offices considerably exceeded the amount which might reasonably have been anticipated, the additional amount required under that Sub-head is £6,000. The total increased expenditure on the Vote is thus £9,000.
As regards the receipts to be set against the expenditure of the Clearing Offices the amounts to be received in any year in respect of commission depend on the amount of sterling available for distribution to United Kingdom creditors and the speed at which it is paid out. The excess of the Clearing Office receipts over the original Estimate resulted in an increase in the payments on which commission is charged, and an additional sum of £8,990 will be appropriated in aid. To make this appropriation I have to come to Parliament with a token Supplementary Estimate of £10. There is no 1061 change in policy of any kind, but the amount of business transacted has been more than was anticipated, and it is therefore necessary to increase certain expenses which are met by corresponding appropriations-in-aid.

§ Mr. Pethick-Lawrence
I am not quite clear whether the items on the receipts side and the items on the payments side arise from the same or from different causes. I understand that the amount of business which the Clearing Office had to transact is considerably greater than was anticipated, and that the increase in receipts does not come at any rate solely, even if mainly, from that cause, but owing to a change in the exchange value of sterling. I should like to be clear whether the increase in business has re-suited in larger receipts, and, if so, what part of the additional receipts roughly is due to that cause. I should also like to know whether the change in quantity of the work is due to the satisfactory smooth working of the scheme, or whether again it is a pure accident?

§ Lieut.-Colonel Colville
To some extent trade is seasonal, and at certain times of the year there is a great flow of business in one direction. In point of fact, trade has flowed rather more freely in the months since the Estimate was made. That has brought about an increase in the direction referred to by the right hon. Gentleman. He asked me whether the scheme was working smoothly. In certain periods there have been difficulties. In the Anglo-Spanish clearing, for instance—

The Deputy-Chairman
I do not think that that arises on this Vote.

§ Lieut.-Colonel Colville
I can assure the right hon. Gentleman that the cause of the increase has been an increase in trade which was not expected at the time the Estimates were made.

§ Mr. Pethick-Lawrence
The right hon. and gallant Gentleman told us that the increase was due to the exchange value of sterling. Now he says it is due to trade. What, I imagine, has happened is that it is due partly to one and partly to the other. Could he tell us roughly how much is due to each?

§ Lieut.-Colonel Colville
I am afraid I could not give that information to-night.

§ Mr. A. V. Alexander
The Committee must be interested in one aspect of this Supplementary Estimate, namely, the reference on page 25 to the fact that additional provision has to be made for increased staff owing to the volume of work in the Anglo-Italian Clearing Office, and that the salary provision for the period under review is no less than £3,000. It, therefore, seems that the volume of work to be dealt with by the Clearing Office in the case of Anglo-Italian trade has very much increased. It does not seem, from the provision we are now asked to make, that trade relationships with Italy are proceeding in exactly the smoothest possible way. It seems to indicate that there must be considerable economic disturbance in Italy if there is to be such a vast amount of business going through the Clearing Office which cannot be met by the direct liquidation of liabilities between the traders concerned. If that is the position, there is a great deal in the fears which have been expressed by some of my hon. Friends, especially at Question Time in the last few days, as to the possibility of any further facilities being offered to Italy from this country.

The Deputy-Chairman
We cannot discuss that on this Estimate.

§ Mr. Alexander
With great respect, we are being asked to vote extra public money for the Anglo-Italian Clearing Office, and that extra cost will fall on the taxpayers. Surely we are entitled to ask questions as to the policy of the Government in relation to the matters covered by this office?

The Deputy-Chairman
Not on the Supplementary Estimate.

§ Mr. Alexander
It may be a very nice point of procedure, and one must always bow, as far as one gracefully can, to the Ruling of the Chair. It is a little hard on the taxpayer, who is asked to find the money, that when he wants to know why he has to pay, the answer he gets is that the matter cannot be raised on this Supplementary Estimate, the very occasion when he has to provide the money. Here is the sum—£3,000 extra 1063 required. In view of the provision we are asked to make, the Department of Overseas Trade and the Treasury ought to give some attention to the complaints which are made regarding the time British traders have to wait for settlement of accounts in respect of Anglo-Italian trade. A number of business men have mentioned the matter to me, and I have also had particulars of a large number of other cases—concerning other countries besides Italy—in which trade has been lost because of the long interval between the execution of orders and the receipt of the cash in this country by the tortuous route of the clearing house. If the economic difficulties between the two countries involve this tortuous arrangement and the increased volume of work calls for another £3,000, then we axe entitled to say—without embarking on a long Debate which would be contrary to your Ruling, Captain Bourne—that it is an additional warning to the House and to the Government not to furnish any further facilities in the way of credit to that country in her present attitude.

§ Mr. Kirkwood
I wish to call attention to the item dealing with payments to agents. The Financial Secretary to the Treasury told us that these agents were the Bank of England. There is £6,000 extra for them, and I should like to know what extra service they have given for that money.

§ Mr. Tinker
We have been told that this is a Vote for only £10, but on examination of the Estimate one sees rather big figures, and there has been mention of £3,000 in respect of Anglo-Italian trade and £6,000 for agents. I agree that the hour is late, and that we want to get away, and that is why items are sometimes passed over which ought to be examined more fully, but I must ask for a fuller explanation of these two items, because they total £9,000, and but for them there would have been a balance in hand.

§ Lieut.-Colonel Colville
When the Act of 1934 which authorised the setting up of Clearing Offices was passed it was provided that expenses of those Clearing Offices should be borne on Votes, but the Clearing Offices were entitled to 1064 charge a commission on the sums they distributed, and the intention of Parliament was that the rate of commission should be sufficient to cover the expenses, including the payment of agents and "allied services." The hon. Member for Dumbarton Burghs (Mr. Kirkwood) seems to see something sinister in the reference to agents. There is nothing sinister about it. It is work done by the Bank of England in connection with the Clearing Offices, and involves the handling of very large sums of money. It is the intention that the expenses should be recovered from those who use the Clearing Offices, and it is expected that in the present year the receipts will be sufficient for the purpose, but I have to present a Supplementary Estimate for £10 to enable me to appropriate the money which is coming in against these additional outlays.
I agree with one point made by the right hon. Gentleman the Member for Hillsborough (Mr. Alexander), whose arguments I would like to follow, but I am afraid that I, too, would be out of order. I agree that clearing is a tortuous method that we should like to do away with. This Supplementary Estimate will not enlarge our commitments in respect of setting up clearings, but if there are delays in payment it is all the more necessary to have the requisite staff to deal with the matter.

§ Mr. Alexander
Will the extra salaries involve an extra rate of commission on account of the business passing through?

§ Lieut.-Colonel Colville
The right hon. Gentleman asks me a question on which I think I might reasonably ask for notice. There is no intention of using the taxpayers' money in this connection.