CLAUSE 4.—(Further power to give guarantees.) (Hansard, 2 February 1939)

§ Mr. Pethick-Lawrence
This Clause is the main new departure in the Bill. It is purely an experiment, and the Committee will await with interest the report which the Minister promises in the Bill with regard to what is done under this Clause. There is one point about which I should like to get some further information. The point is really contained in the Financial Memorandum to the Bill, which says in the last sentence: The guarantees given under the Export, Guarantees Act, 1937, and earlier enactments, imposed no charge upon the Exchequer as the premiums received exceeded the total of claims paid and administrative expenses and it is anticipated that guarantees given under this Act will similarly impose no charge on the Exchequer. I should like to be enlightened about these last few words. As I understand the Bill, the first part ending with Clause 3 is more or less on the existing lines. We are to have the benefit of the 417 advice of the Committee, which gives advice on commercial grounds, and it is, therefore, reasonable, as far as the first three Clauses are concerned, to assume that any operations under them will be of the same commercial character as in the past and not likely to involve any loss. If I am to believe the Financial Memorandum, the operations that are conducted under Clause 4, in spite of the fact that they are no longer to be on purely commercial lines and of the fact that they are not to have the approval of a council especially set up for the purpose, are also likely to be directly remunerative. That is rather surprising, because I think the object of Clause 4 is to enable the Board of Trade, in circumstances in which it thought fit, to engage on guarantees of a rather doubtful character. I should like to know which is the case. Are the operations under Clause 4 to be of so doubtful a character that they might well result in a loss, in which case Clause 6 will undoubtedly come into effective operation, or am I to believe the Financial Memorandum, which suggests that, though we are not to have the commercial safeguards of previous Bills or of the first three Clauses of this Bill, we are still to expect that there will be no loss to the Exchequer?

Mr. David Adams
The question I wish to raise traverses almost the same ground as that covered by my right hon. Friend, namely, as to how this money is to be guaranteed under Clause 4. This is apparently a new departure and provides further powers to give guarantees. The Tyneside mayors met recently to discuss this question. One raised the question whether it would be competent to set up an industry by the aid of these guarantees to engage in the export trade. Another raised the question whether these guarantees could be utilised for running steamships in the export trade. It was generally felt that they might be a means by which districts which are suffering like the Special Areas could have money placed at their disposal to enable them to engage in the export trade which, owing to lack of funds, they are at present prevented from doing. Is there any possibility under Clause 4 of money being utilised in that way?

§ Mr. R. S. Hudson
I think, at first glance, the answer to the questions of 418 the hon. Member for Consett (Mr. David Adams) is in the negative, but I would like to have an opportunity of looking into them more carefully. The answer to the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) is, I think, that this is, we hope, not a Bill with the short title of "A Bill to incur losses." Although some of the transactions under Clause 4 may contain an element of risk, we shall do our best to see that they are not such as will involve us in losses. Therefore, we hope that the guarantees in the Bill will impose no charge on the Exchequer. In order that the House may from time to time be kept fully acquainted with what is going on under the Clause, we do not propose to include provision for transactions which are undertaken under Clause 4 in the existing Vote for the Export Credits Guarantee Department. As and when such provision is found to be required separate Estimates will be presented to Parliament. We are endeavouring to keep the two sets of transactions separate.