EXPORT CREDITS (SPECIAL GUARANTEES) (Hansard, 19 February 1947)

§ Mr. Peake
This is a somewhat unusual Supplementary Estimate, and I rise to ask for your guidance, Mr. Deputy-Chairman. There is only one Subhead to the Supplementary, and that indicates that the appropriations in aid, originally anticipated at £100,000, will be £65,000, and that, therefore, the additional sum required is £35,000. Now, you, Mr. Beaumont, and your predecessors in the Chair, have ruled that we cannot discuss appropriations in aid. This appropriation in aid is reduced by a sum of £17,000, an anticipated saving on another Subhead. It has also been ruled from the Chair that we cannot discuss anticipated savings. Am I right, therefore, in thinking that, though we are pleased to see the Secretary for Overseas Trade in his place, no contribution what- 1328 ever which either he or I could make to the discussion of this Supplementary Estimate would be in Order?

§ The Deputy-Chairman (Mr. Hubert Beaumont)
The right hon. Gentleman has put to me a very difficult question, and a rather unusual one. Discussion can be allowed, but only on the deficit, and why the deficit has occurred.

§ Mr. Peake
I am glad to have you: Ruling on this, but it does seem to me to cut across previous Rulings, that we cannot discuss either a short fall or a surplus in appropriations in aid. If we are so permitted, I would ask the hon. Gentleman to give us a very short explanation of the short fall.

§ The Deputy-Chairman
I must point out that, unless one grants that permission on this Estimate there can be no discussion at all. It will, I hope, be sufficient help to have a discussion on the deficit, and why it has occurred.

§ The Secretary for Overseas Trade (Mr. Marquand)
The original Estimate made necessary provision to cover all contracts the Department might have to make in respect of export contracts entered into by British exporting firms. One of these contracts, which it was fully expected would be entered into during the period, fell by the wayside, and has not eventuated, and has not been entered into. Consequently, the premiums expected to be received in respect of it will not be received, and, equally, the liabilities expected to be undertaken will not have to be undertaken.

§ Mr. Spence (Aberdeen and Kincardine, Central)
Am I to understand from what the hon. Gentleman has just said, that the fact that this contract has not been entered into means that the cost of running the Department has not been covered by the premiums received? I have had experience of the use of the Export Credit Department in my own business, and it is a most admirably run Department, and serves a very useful purpose in what I may call normal times. But here—

§ The Deputy-Chairman
The hon. Gentleman is now getting out of Order. We can discuss only the deficiency, and why it has occurred.

§ Mr. Spence
I beg your pardon. I do feel that today there ought to be no real reason for a deficiency to be shown by this Department if it is being run with due economy.

§ The Deputy-Chairman
It is not a question of economy. It is a question of receipts.

§ Mr. Spence
I am sorry. It seems, then, that the deficiency has been caused by the non-receipt of sufficient premiums to cover the working of the Department. In view of that it would appear that the proper thing to do is to wind up the Department.

§ Sir John Barlow (Eddisbury)
In view of the importance of the export trade, it seems remarkable that there is deficiency in premiums, especially since we, are told that there is' an increase above prewar values. Is this facility for export credits being used for the purpose for which the Department catered at first? In view of the relatively small exports and the shortage of these premiums, even greater economies were made and considered advisable, but in winding up these export credits entirely, it was problematical whether it was wise to start them in the first place.

§ The Deputy-Chairman
The hon. Gentleman is going very wide of the Resolution. He is now on the question of policy.

§ Sir J. Barlow
May I ask, then, if, in view of this deficiency in premiums, it would not have been (better for the export trade that the export premium system were entirely removed?

§ The Deputy-Chairman
That would be a matter of policy, and the Minister would not be able to reply.

§ Sir William Darling (Edinburgh, South)
May I venture to say something on Class VI (5), Sub-head No. 111? The item is: "Z.—Appropriations in Aid: Deficiency in receipts from Premiums, etc., £35,000." What is the percentage of premium charge which has resulted in this deficiency on woollen textile goods and upon electrical machinery? If the Parliamentary Secretary would give this information, it would be very helpful, and then I can see how this deficiency arises. 1330 The conduct of business by premiums is a well known one, although perhaps not so well known in Government circles.

§ The Deputy-Chairman
The hon. Gentleman cannot make any reference to policy.

§ Sir W. Darling
With respect, I will not, then, pursue my curiosity as regards policy. Instead, I will ask for facts. First, what are the amounts of these premiums? To what does 35,000 relate—to the value of the goods exported, or intended for export? This sum of £35,000 is stated with a barrenness which conveys very little to me, and I am sure that the Secretary for Overseas Trade is anxious that the Committee should know what lies behind his mind in seeking these appropriations in aid. In business, a large amount of circumlocution is necessary so that the simple minds of ordinary business men which, I realise, are inferior to those of Members of Parliament, may be enlightened. This matter needs detailing. It is one of those fundamentally simple matters which I think the Parliamentary Secretary will welcome the opportunity to explain in detail, and if I have provoked him sufficiently to give this guidance I shall be grateful. The country tomorrow will have this renewed interest in overseas trade. It will be stimulated by the clarity or otherwise of the answer given to Subhead No. in, which deals with "Appropriations in Aid: Deficiency in receipts from Premiums, etc." I shall be glad to hear the answer.

§ Mr. Marquand
I will direct my remarks, Mr. Beaumont, to the section to which the hon. Member for South Edinburgh (Sir W. Darling) referred, and not to the remainder of his speech, which, of course, did not refer to that section at all. He was talking, during his speech, of the normal export credit guarantee work of the Department which runs every year into millions of pounds, and about which full information is given in the ordinary Estimates. We are concerned, here, merely with a section of the Department's work where, under a special Act, there are special guarantees given on occasions where the Advisory Committee find that the political condition of a particular country is such that normal commercial insurance cannot take place. In this case the contract concerned was one into which we expected to enter with the Greek Government. After the contract 1331 had proceeded a certain way the Government in Greece changed, and the new Government who came into office did not feel, for reasons of their own, able to take up the contract. When the estimate was brought forward originally, there were one or two other contracts also in it, and it was estimated that the total appropriation required to meet all possible liabilities under these contracts in the year concerned would be £200,000. The total receipts of premiums estimated to be received in the year concerned—and these contracts run for many years, and it is only over a long period of years that the whole thing is discharged—were £100,000. If we subtract from these figures the part which relates to this contract with Greece, we get estimated payments of £183,000, and estimated receipts of £65,000. If we subtract £100,000 from £200,000, in the first column, we get the net estimate of £100,000. If we subtract £65,000 from £183,000, we get the estimate of £118,000. We are asking tonight for a mere bookkeeping entry of£18,000, which will put the account right.
It may be out of Order for me to say this, but the rest of the work of the Department does not cost the taxpayers one halfpenny. It is a very profitable concern.

§ Sir W. Darling
On a point of Order. Before the hon. Gentleman sits down, I would point out that I asked for some particulars of the nature of the contract.

§ The Deputy-Chairman
That is not a point of Order.