LEND-LEASE CONTROL (RELAXATION) (Hansard, 25 January 1945)

§ Captain Duncan (Kensington, North)
My object in raising this question of the relaxation of Lend-Lease control to-night is to attempt to obtain from the Board of Trade more specific information for the benefit of manufacturers and exporters as to what articles, made from raw materials, can be exported. This matter has been the subject of a considerable amount of Parliamentary attention through statements, Questions and answers, and if I may be allowed, very shortly, because it is late, I would like to read three short extracts from previous statements. First, there was the Prime Minister's statement of 30th November: Thus, from that date"— that is, 31st December, 1944— we shall no longer receive shipments to this country under Lend-Lease of any manufactured articles for civilian use which enter into export trade, nor of many raw and semi-fabricated materials, such as iron and steel and some non-ferrous metals. Consequently, in accordance with the White Paper of September, 1941, we shall then be free to export a wide range of goods made from those metals."—[OFFICIAL REPORT, 30th Nov. 1944; Vol. 406, c. 72.] That statement, as far as it went, was welcome, but I think it will be agreed that it was a little vague. Although in general it gave hope to manufacturers, it did not give them much guidance. So I asked a Question of the Department of Overseas Trade on 12th December. I asked whether a representative list of the manufactured articles for civilian use, which enter into the export trade, could be given and also a complete list of the raw and semi-fabricated materials which we would 1134 cease receiving under Lend-Lease from America after 1st January, 1945. The Parliamentary Secretary to that Department said, among other things: restrictions on export will be relaxed as conditions permit and announcements will be made from time to time. For the present manufacturers should consult the Board of Trade for information on any particular class of goods, subject to export licensing, with which they are concerned."—[OFFICIAL REPORT, 12th December, 1944; Vol. 406, c. 1047.] The third statement comes from one which was made by the Chancellor of the Exchequer on the same subject on 21st December, when he said: … we hope there are no potential exports of any importance likely to be affected by any restriction arising out of Lend-Lease."—[OFFICIAL REPORT, 21st December, 1944; Vol. 406, c. 1977.] But what are the implications still appears vague to manufacturers. For instance, up to now, under Lend-Lease, if one part of the manufactured article has been obtained under Lend-Lease the whole article has been prohibited, and I understand that some valuable contracts have been lost for that reason. So far as manufactured articles are concerned, I would like to know whether we have, in fact, as the Chancellor hoped, complete freedom to export articles which we make in this country to-day and, if not, what are the articles, or the raw materials of which they are made, which are still restricted. Further, if it is a fact that there are few raw materials or semi-fabricated materials which are still restricted through Lend-Lease could the Minister give the House a list of them for the benefit of the export trade?
I recognise that Lend-Lease has been of tremendous value to us, but time is going on. We hope the war is coming to an end, at any rate against Germany, and if we are to have a high level of employment, not only in the change-over from war to peace but afterwards, we must ensure that we get into our export markets at the earliest possible moment, gain them and hold them. For that purpose an immense amount of work in planning ahead must be done by manufacturers. Assuming that the difficulties of labour and materials may be easier by the end of the year, now is the time for manufacturers to plan their production, to regain their overseas contacts, to send their agents overseas or reopen agencies, and so on. 1135 But they cannot do all this unless they know whether they have freedom to use the materials which they will require. It is for that reason that I was dissatisfied with the answer of the Secretary for Overseas Trade. It was, in part, that if a manufacturer was in doubt he should write to the Board of Trade. What a dangerous answer that was. I believe that hundreds of exporters are in doubt and, if everyone writes, the Board of Trade letterbox will be full and necessarily there will be undue delay in getting answers. Would that be satisfactory either to the Board of Trade or to the manufacturer or to the exporter?
May I say how delighted I am that the President has come himself to answer my point? Here is an opportunity for him to clear up a great deal of doubt and, maybe, dissatisfaction to exporters and manufacturers. I hope he will make a clear statement as to what materials exporters can use, what manufactures they can export, and what raw and semi-fabricated material they can use.

§ The President of the Board of Trade (Mr. Dalton)
I am obliged to the hon. and gallant Gentleman for the kind remarks he made regarding myself. The Secretary for Overseas Trade and I are both spending a good deal of time on these matters and we are anxious that there should be as little doubt as possible in the minds of exporters as to the extent to which export freedom has been broadened, consequent upon the agreement in Washington, on which the Prime Minister made his statement. At the same time it is not altogether easy to make a statement in the form that the hon. and gallant Gentleman desires. The difficulty in the way of exporters becoming acquainted with the present position is by no means insuperable. After all, most exporters belong to some trade association or other, and one of the chief purposes of such associations is to furnish service in regard to such items of intelligence as are now in question. We are, of course, constantly in touch with a large number of important associations covering between them the great bulk of the export trade, both actual and potential. We have a heavy mail now, but I do not think that the continuance of these contacts, already very useful for other purposes and of use 1136 in the future in order to elucidate these problems, will add appreciably to our labours.
Since I have been President of the Board of Trade, I have taken particular interest and pains in the staffing of the Board by reinforcements in certain directions so as to make it better able than it was, perhaps some years ago when these problems were less pressing, to deal with just this kind of issue which has now become acute. It has been done both in the field of recruitment of certain permanent civil servants from other Departments and by securing the assistance of a number of business men to assist us in our work, the most notable of whom is Sir Charles Bruce-Gardner. He is paying particular attention to the questions my hon. and gallant Friend has raised and he is daily and constantly maintaining contacts with, and giving information to, leading industrialists and representative men from various organisations interested in this matter.
The reason why it is not possible to answer my hon. and gallant Friend's question exactly in the form in which he put it is because Lend-Lease is not the sole determining factor, and never has been, as to whether particular exports are possible or not. The White Paper of 1941 did, indeed, lay down certain principles and we gave certain undertakings which we have kept, as was our duty. We have gladly kept them in the light of our comradeship with the Americans in our common enterprise of fighting the common enemy. That White Paper has not been set aside by the Lend-Lease discussions in Washington, but arrangements have been made whereby certain goods are progressively removed. It will be a progressive arrangement whereby we cease to import certain goods altogether from the United States, or, alternatively, pay for what we import instead of taking them on Lend-Lease.
Much the most important of the relaxations, which have a great interest to the whole of the engineering industry and other industries, is the relaxation, which I referred to in the Debate on the export trade on 6th December and which the Prime Minister referred to in his statement, on iron and steel. That is really what the engineering industry wanted and what they are extremely glad we have got. There are also aluminium and mag- 1137 nesium, particularly aluminium. These are the principal relaxations. These newly acquired freedoms are of great potential value to our export trade, but I must give a warning here in the context of this Debate that the value is potential and in the future. It would be wrong if, as a consequence of any discussion here, an idea were to spread in the business community that there is going to be a great spate of exports pouring forth, even though they made be made now of goods freed from the Lend-Lease limitations which previously attached to them. That is why it is not really helpful to the business community to answer the question in just the form my hon. and gallant Friend put it, because there are many other considerations which still limit the volume and channel of our exports, at any rate, until the end of the German war and to a lesser extent until the final stages of the war against Japan.
The real test of the matter is whether or not we are able to grant an export licence for the particular goods. That is determined by no means solely, and in many cases not predominatly, and now in many cases not at all, by Lend-Lease considerations. It is determined by considerations of supply, of total shortage, of alternative uses—whether we require the materials in question for munitions of war or for other urgent needs, or whether we have, as is very often the case, and as I was being urged to do, it is interesting to observe, at another stage of our proceedings, to restrict exports from this country to countries which may be requiring the goods, because it was stated that our own people at home were so short of them that we should give the goods to our own people first.
Therefore, it would most usefully serve the purpose which my hon. and gallant Friend and I have equally at heart, namely, that there should be no misunderstanding in the business world of the position, if I approached the question from a slightly different angle, and if I drew the attention of the House, and through the House attracted the attention of the public and the business world outside, to what we have recently been able to do by way of relaxation of export licence requirements. That would be useful if it were widely apprehended outside. I would like, before I give certain particulars, to refer to the statement made by the Chancellor of the Exchequer, 1138 which my hon. and gallant Friend quoted and which ended up by saying: Any exporter who is in doubt about his position should make inquiry of the Board of Trade, but he must remember that it is only as existing shortages of labour and material are overcome that the freedom to export which we have secured will become gradually effective."—[OFFICIAL REPORT, 21st December, 1944; Vol. 406, c. 1977.] It is very important, so that false hopes shall not be raised and the whole thing got out of focus and possibly psychological damage be done to the maintenance of the war effort, that that should be emphasised. What we have secured is, in large degree, a freedom in principle rather than a freedom which is going to be widely applied in practice for some time to come.
Having said that, which I hope will not be thought unduly discouraging, I would like to draw the attention of the House to two Orders, the cumulative effect of which is not insignificant. In the first place, we have made an Order, with effect as from 15th January, 1945, regarding the countries on what are described as the "All Goods" List. I would like to explain what that means. There are certain countries—until now a long list of countries—which are affected largely on economic warfare grounds and partly on supply grounds here, and partly also in order to oblige administrations and organisations in those countries—the Governments of those countries sometimes. Being translated into simple and intelligible English, the jargon to which I have referred means countries to which no exports of any kind may be made from this country except under export licence. An export licence is required for all countries on this list, for all exports, no matter of what character.
I have been very anxious to cut this list down. I think it will be at once observed that one of the great alleviations for the exporter is to know that certain countries are no longer on the "All Goods" List and that, if a certain article is free to be exported without export licence anywhere, then it can go to certain countries, and that no longer will export licences be required in all such cases. There has been a very considerable cut, and I have been very glad to be able to issue an Order effecting it, in the number of those countries. I would like to be able to read out the countries which have been removed from the list. This list has 1139 been published and I have no objection—indeed a Question already on the Order Paper will enable me to do it next week—to circulating it in the OFFICIAL REPORT. This list which I now have in my hand is a list of the countries now removed from the "All Goods" List, and to which, therefore, export licences are no longer required or are no longer indispensable for all classes of export.
Taking one or two of them, it includes Algeria, the Sudan, Corsica, Cyprus, Egypt, various French Possessions, Somaliland, Iran and Iraq—both of great importance in the Middle East—French Morocco, Palestine, Saudi Arabia, Transjordan, Tripolitania, Tunisia, and last, but perhaps not least, the Vatican City. To all these countries a considerable amount of exports may now pass without any export licence, whereas previously export licences were necessary. I have not yet been able to remove from the "All Goods" list, nor am I in a hurry to do so, what are called the "contiguous" neutrals or "semi-contiguous" neutrals. It is desirable to keep a tip of the finger on Sweden, Spain, Portugal or Turkey, but these European neutrals stand in a special class for economic warfare reasons and war reasons. We retain them on the "All Goods" list, but I am anxious to assure my hon. and gallant Friend that we have reduced this list as far as possible at the moment, and that nothing will give me greater pleasure than to reduce it still further, having regard to the wider considerations of the war. So much for the list of countries.
In addition I gave certain instructions some time ago to my officials, who have been working on the matter with great energy and application. I wanted the export licensing system to be simplified as far as was practically possible, and I shall be very glad to make Orders from time to time removing in sections various commodities from the requirement of export licences except to countries remaining on the "All Goods" list. I made an Order which was dated 22nd December applying as from 1st January. It is very long. It contains a lot of detail and all the articles here set out, many of which are made of iron or steel, are now free from all export licensing requirements. That is to say any exporter who makes, and wishes to export, any articles on this list, may do so without 1140 any export licence at all from the Board of Trade, provided it is not destined for one of the countries on the "All Goods" list. Even if it is destined for a country still on the "All Goods" list, he will very often be able to secure an export licence. It will depend largely on circumstances connected with the war.
I will merely mention that the list contains among other things appliances, apparatus, accessories and requisites for sports, games, gymnastics or athletics. I have been very anxious to enable our manufacturers of these things to get going, particularly in the export market. They are all free now. Burial caskets are free now.

§ Captain Duncan
Is Canada on the list?

§ Mr. Dalton
No. Canada is not on the "All Goods" list. The list to which I was referring contains, apart from such items as dog collars and so on, articles of substantial importance. This is an example of how, consequential upon the agreement in Washington—as these goods contain iron and steel—we are beginning to lift export licensing requirements over a considerable field. From time to time I hope to extend further the field of exemption.
I hope I have succeeded in making clear what has been done. We have to take account not only of the Lend-Lease obligation, which remains morally binding upon us, and which it would be morally wrong to attempt to dodge. That obligation will gradually be lifted by this agreement. I shall be no party to any attempt at evasion of our obligation nor will the House wish me to be.
We must keep all our promises to all our Allies; and this is a very solemn and definite promise. But other considerations will also, I hope, in the course of time, just like this Lend-Lease alleviation, permit of an alleviation as we march past the defeated Germany into the last stage of the world war. I would recall the Prime Minister's statement that there can be no significant release of resources, whether for the export trade or for the improvement of our own very depressed civilian standards at home, until Germany has been brought down. Thereafter we shall progressively be able to take advantage of the freedoms which will come partly from this re-arrangement of the 1141 Lend-Lease programmes with America, and partly from the release of resources from the war effort. This will diminish the shortages from which we are now so severely suffering in our domestic life and improve our possibilities of export. It is not necessary to emphasise that labour is now very short. Even if there were no limitations at all other than the labour supply—and there are many others—that would hold our total exports at a very low level.
I have, I hope, given information which will be of interest to the House, and I will take whatever steps I can to give it wider publicity, whether by 1142 answers in Parliament or in other ways. I am most anxious that business men should be acquainted with the position from time to time, and I will continue to give attention, with the help of my right hon. Friend the Secretary for Overseas Trade, who devotes a very large part of his time to this matter, to perfecting our machinery, and to seeing that, in the easiest way from the point of view of the exporter, the position shall be made clearly known.