EXPORT GUARANTEES BILL

HC Deb 20 February 1952 vol 496 cc317-64

Order for Second Reading read.

7.45 p.m.

The Secretary for Overseas Trade (Mr. Henry Hopkinson)

I beg to move, "That the Bill be now read a Second time."

The House will be aware of the series of Acts which have been passed over a period of years for the purpose of developing a system of encouragement of our export trade. Credit insurance by the Government was first introduced after the First World War in a very modest form under the authority of the Overseas Trade Credits and Insurance Act, 1920. The scheme took the form of cash advances, and credits were limited to£26 million a year.

This system was discontinued in 1929 in favour of a system of guarantees, which is the basis of the present scheme. The powers given to the Board of Trade under the original Act were exercised by the Department of Overseas Trade until April, 1930, when the Export Credits Guarantee Department became a separate unit under the Secretary of the Department for Overseas Trade. Before and after the Second World War, there were further extensions by Acts of Parliament both in regard to the scope of the Department's activities and its financial powers.

In 1949, the Export Guarantees Act was passed with the general approval of all sections of the House. This Act, which was introduced by the right hon. Member for Huyton (Mr. H. Wilson), was, broadly, a consolidation Act, modifying and simplifying existing legislation; but it also took powers to increase the amount of the liability of the Board of Trade in respect of guarantees given by the Export Credits Guarantee Department. There was also a further short Export Guarantee Act in 1951, which conferred certain minor additional powers on the Department covering overseas subsidiaries of British companies. That is the legislation up to date.

The object of this Bill is to secure a further extension of the aggregate limits of liability of the Board of Trade, acting through the Export Credits Guarantee Department. This is for the purpose of meeting the still further expanding demand for guarantees. Before dealing in detail with the need for this, it would, perhaps, be for the convenience of the House if I were to outline the way in which the Export Credits Guarantee Department operates.

The guarantees given by the Board of Trade can be divided into two main groups: First, the commercial guarantees, which are in practice a form of insurance given on a broad, commercial basis. I must, however, make it quite clear that it is not a question of the Department giving credits or providing money in any form. They simply give guarantees of payment. These guarantees are given with the consent of the Treasury and after consultation with an Advisory Council, which consists of eminent bankers and business men and representatives of organised labour. Guarantees are only given in cases where the Council considers that a guarantee can be offered as a reasonable commercial risk.

The guarantees are divided into short-term credit contracts, which mainly cover consumer goods and raw materials, and medium-term contracts, which are directed towards capital goods and where the terms are different in each case and, generally speaking, longer than in the case of consumer goods. In the majority of cases in this second category, the buyer is a public authority. In both cases, the risks covered include such matters as the insolvency of the buyer, difficulties over the transfer of sterling, the risk of war or civil disturbance and a number of other contigencies. Under the 1949 Act, the limit of liability of the Board of Trade for the commercial guarantees was fixed at £500 million.

The second group consists of special guarantees given, again, with the consent of the Treasury under Section 2 of the 1949 Act, for specific transactions which are considered to be desirable in the national interest. They are not necessarily acceptable as reasonable commercial risks, and consultation with the Advisory Council is not required. These guarantees cover a wide number of projects, such as certain aspects of the dollar drive and such things as the export of herring to Poland and many other projects.

In the case of North America, there are all sorts of new schemes which have been devised, including policies covering losses involved by market research, advertising or other forms of promotional activity. Special guarantees also include trade with the Iron Curtain countries amounting to £13,240,000 on 31st December last. They also included recently £10 million for the sale of buses to Cuba, to provide transport for the city of Havana, as the right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley) knows very well. The liability of the Board in the case of the special guarantees is at present limited to £100 million.

It is the object of the present Bill to increase the limits for the commercial guarantees and the special guarantees to £750 and £150 million respectively. It has always been the practice of the Export Credits Guarantee Department in administering its policy to seek increased limits as and when they are needed, rather than to obtain from Parliament sanction for powers which would be sufficient for all contingencies and circumstances for a long time ahead.

When the limits were last raised in 1949, I doubt whether anyone expected that the Government would be obliged to ask for a further large increase quite as soon as this. At the same time, I hope to be able to make it clear to the House this evening that, if the Export Credits Guarantees Department is to have the flexibility to operate which it requires, these increased limits of liability are necessary.

I shall first take the commercial guarantees. The volume of business under this heading has been constantly expanding since before the war. The average annual value of policies for the three years before the war was £43 million. By the year 1945–46, the value of policies issued had reached £71,800,000. This figure again rose each year until, for the year 1950–51, the total volume of business was valued at£511,200,000. The value of policies issued for the nine months up to the 31st December. 1951, amounted to£470,600,000.

I should explain that, broadly speaking, guarantees given by the Department cover a percentage only of the loss which an exporter may incur. The percentage in the case of individual guarantees is a high one, up to 85 per cent. in cases of the buyer's insolvency and 90 per cent. for other risks. On this basis, the total value of the Department's commercial liabilities was fixed in 1939 at£75 million. In 1945, it was raised to£200 million, and in 1948 to£300 million.

In 1949, when the right hon. Gentleman the Member for Huyton asked the House to agree to raise the figure from £300 million to£500 million, the maximum liability outstanding at the end of the previous year was £224,500,000. The right hon. Gentleman said that, in seeking this increase, he was asking the House to agree to make provision for further increases in business.

These increases have now occurred, with the result that, by October last year, the maximum liability of the Department in respect of these commercial guarantees had reached the figure of£415 million. The House will realise that, at this point, officials of the Department were inevitably becoming nervous about the possibility that they might be faced with the necessity of turning down business as a result of the present statutory limit of liability.

At the end of December, 1951, the latest date for which figures are available, the liability in respect of guarantees given and offered under Section 1 of the 1949 Act had fallen to £387 million. This fall, however, must be regarded as fortuitous and to some extent seasonal, and it must be assumed that the figure will rise again sharply. It is possible that the extra £250 mill ion now in question may not be required in the immediate future, but it would be dangerous to assume this in view of current high prices and an increasing number of applications at this particularly difficult time.

Mr. Harold Wilson (Huyton)

I did not catch the exact figure of the fall under the Section 1 guarantees. Will the hon. Gentleman now repeat the figures?

Mr. Hopkinson

Over a period of years?

Mr. Wilson

No. When the hon. Gentleman said there was a fall, which he said might be temporary or fortuitous, what was the date to which he referred?

Mr. Hopkinson

The fall was from a figure of £415 million in October last to £387 million at the end of December.

I now turn to the position regarding the special guarantees, which is a matter of real urgency. These guarantees, as I have explained, refer to transactions which are undertaken as a matter of public policy. The House will realise that, in regard to certain of these guarantees, the risks are far heavier in relation to the premium receipts than in the case of the commercial guarantees, and claims, when they arise, may be substantial.

Special guarantees given under Section 2 of the 1949 Act are also generally of long duration, and most of them have not been running long enough for a sound judgment to be formed of claims experienced. In the year 1949–50, the volume of business was £1,600,000. By the following year, it had risen to £45,200,000, and for the nine months to 31st December, 1951, it amounted to £55,800,000.

As regards the liability of the Department for the special guarantees, the figure at the end of December, 1951, stood at £63 million. In October, it had been as high as £70 million, and I understand that, at that time, there was a question of a guarantee of £15 million which, in fact, did not materialise, but which would have brought the figure up very close to the maximum limit. Having regard to the nature of this type of business, notably the size of the transactions and the short notice at which demand for facilities may arise, this figure was regarded by the Department as dangerously high in relation to the total statutory liability of£100 million.

There is another point, which is that credits under this Section do not revolve as quickly as those under Section I, and each has a cumulative effect. Once the balance available is near exhaustion, as might happen at any time now, credit proposals of real urgency and of national importance might have to be abandoned, or, alternatively, the Government might have to come to Parliament for emergency legislation.

It is in the light of these facts which I have described that the Government consider that it is prudent to ask the House to agree to raise the maximum liability in the case of commercial guarantees from£500 million to£750 million, and in the case of the special guarantees from£100 million to£150 million.

The reasons for the increase in business which has rendered this action necessary are not far to seek. It is partly due to the rise in prices and partly to the success of our export drive, or perhaps I should more properly describe it as a combination of both. The total value of United Kingdom exports rose from £2,171 million in 1950 to £2,580 million in 1951, an increase of 19 per cent. Moreover, the United Kingdom export prices also rose quite sharply during the past year.

Average export prices during the year were nearly 20 per cent. above the 1950 average. We must expect this trend to continue during 1952, and it is quite possible that the 1952 average export prices will be nearly 30 per cent. above the 1950 average. The volume of United Kingdom exports in 1951 was some 3 per cent. greater than in 1950, and, given the Government's determination to increase the resources devoted to production for export, there is no reason to suppose that there will be a reduction in export volume. On the contrary, we must devoutly hope that there will be a further increase in volume.

In the engineering field, all the Government's policies are now directed to increasing the proportion of total output devoted to the export trade, and therefore we must expect that capital goods and machinery will form an even larger proportion of total export earnings than in 1951. This will inevitably have a substantial influence on the Export Credits Guarantee Department's medium-term operation.

This fact, coupled with the expected increase in export prices, makes it clear that the conditions governing the flow of our export trade will almost certainly be such as to require a very substantial increase in the use of the facilities offered by the Export Credits Guarantee Department.

Her Majesty's Government are satisfied that in the circumstances the proposed increases to a limit of£750 million for commercial guarantees and £150 million for special guarantees, which I have explained and which includes the dollar export drive, are not too high. I must, however, say that the increases which we expect to occur in the business of the Department cannot be solely attributed to higher prices of exports or to the initiative and performance of our exporters. Part of the credit—for it is a matter of very great credit—must go to the officials of the Department itself.

Generally speaking, the history of the Export Credits Guarantee Department is a success story. Since the Department became independent in 1930, its staff has increased from 79 to 580. The amount of business transacted, however, has increased at least 50 times. I feel certain that hon. Members opposite who speak in this debate this evening will be tempted to describe the success of the Department in building up this large and prosperous business as a perfect example of what a publicly-owned enterprise, and indeed an actual Government Department, can do in the commercial field. We on our side of the House would argue no less vigorously that the Departments success lies largely in the fact that in its 22 years of independent existence it has deliberately based its operations on the methods of operation of private enterprise in its most modern and efficient form.

This policy has been encouraged by successive Secretaries for Overseas Trade of all parties. They have all given this Department their warm support. From its earliest days its headquarters have been in the City of London where the officers are in daily contact with bankers, brokers and merchants. In addition, there are six district offices and six branch offices from which the operations of the staff completely cover the British Isles. These people in the branches particularly are responsible for selling insurance like any other insurance agent, and providing a constant service to policy holders.

To further the export drive and to consolidate its resources, the Department must increase its spread of risk, its gross income and its service to exporters. It must satisfy its existing clientele, and at the same time it must make sure that no export effort fails because its legitimate services are not exploited by potential new policy holders.

I feel that the whole House would wish me to take this opportunity of paying a tribute today to the success of members of the Department from the highest to the lowest in achieving these aims. The Department's commercial success may be measured by the fact that not only has it succeeded in affording this remarkable assistance to the British export trade; it has also been a source of revenue to the Treasury.

Since April, 1930, until the present time it has made a contribution to the Exchequer of no less than £7,387,568. This in the case of the normal insurance company would be regarded as part of its reserves against future contingencies, but under the system operated here it goes into what is known as a "notional reserve" in the Treasury, and the Department has never had access to it again, and probably never will. This figure covers payments on claims as well as the administrative expenses of the Department.

The House may be interested to know that since 1930 the gross payments on claims have amounted to £9,400,000. Of that, £5,800,000 has actually been recovered, leaving £3,600,000 outstanding. A part of this has been written off as irrecoverable, but it is quite possible that at least a part of that sum of £3,600,000 will be recovered and will go to swell the notional reserve in the Treasury.

There is one final aspect of the Department's work to which I wish to refer. A good export is an export paid for. It is almost a platitude to say that our whole future depends upon the development of our export trade. But it is not enough merely to register an increase in physical exports listed in the Trade and Navigation Returns. What you have to do is to get your money.

In this connection, the Export Credits Guarantee Department make two important contributions. In the first place, their assessment of the credit risk involved does in many cases make the difference between a good and a bad export. In the second place, it is the duty of the Department to follow up particular transactions for which they have given guarantees so as to assist exporters in obtaining the ultimate cash recovery, even though in some cases the immediate payment has been frustrated. The Department has special facilities for dealing with this type of work which it carries on in close consultation with our commercial diplomatic officers abroad and our trade commissioners in the Commonwealth which undoubtedly results in recoveries being made which would otherwise be lost.

After this explanation of the operations of the Export Credits Guarantee Department and of the possibility, and, I would say, the necessity, of its extending its activities, I hope the House will feel able to give a Second Reading to this Bill today. If there are any questions on which hon. Members require further information, my right hon. Friend who will be speaking later in the debate will be glad to answer them.

I hope, however, that I have succeeded in convincing the House that the Department is doing valuable work which is increasing in importance, and which is, indeed, becoming of overwhelming importance at this particular time. Its success over a very long period is something of which all parties and, indeed, the whole nation can feel proud, and I hope that the confidence which the Department has earned may be rewarded by the extension of its financial powers and scope which I am asking the House to accept tonight.

8.10 p.m.

Mr. A. G. Bottomley (Rochester and Chatham)

Upon the subject matter of the Bill I think there will be unanimity, but upon the comments made by the Secretary for Overseas Trade I am sure there will be some differing opinions from this side. My hon. Friend the Member for Hamilton (Mr. T. Fraser) earlier today talked about educating the Conservative Party. This is part of that process.

The Secretary for Overseas Trade said that the State entered this insurance business after the First World War. It is in the midst of war that the Conservative Party generally thinks of putting the national interest first. In the First World War, bearing in mind that we had to reestablish our overseas trade, a Measure was introduced and the Export Credits Guarantee Department was established. It carried on smoothly for a time, but it was not long before the Conservative Party were out to destroy that newly-created organisation and it was necessary for the Labour Government to be elected before it was possible for the Department to be put on a sound and reliable basis. In 1930 a Committee was established and as a result the Export Credits Guarantee Department carried on the work it was originally set up to do.

One of the ways in which the Department does its work is by the aid of an Advisory Council, a body of men who have done a very good job. In the days of a Conservative Government the Advisory Council was made up of nine financiers and one manufacturer. Things are different today. There are not so many financiers on the Council, but there is an exporter and a trade unionist. I think it will be agreed that that has given the Council a broader view and some of the success of which we have heard tonight has resulted from that change in the membership of the Advisory Council which has given better service than was given by the earlier body. I should like to say to the Advisory Council that they have done a good job and we appreciate it.

As the Secretary for Overseas Trade said, the Export Guarantees Act was consolidated and we raised the amount of money available in order that credit should be given. Since then, as the hon. Gentleman rightly said, there have been many other additions, such as special arrangements for boosting the dollar export drive, which was so necessary, the holding of stocks and the provision whereby overseas subsidiary companies are able to obtain credit insurance, too. All this has been very useful and worth while.

The Secretary for Overseas Trade said that the value of exports has gone up by so much and that the volume had also risen but that he was not able to give the figures of volume. If it is possible for the President of the Board of Trade, when he comes to reply, not only to give the value but also some idea of the volume we shall be in a better position to judge whether the amounts asked for tonight are those that can be reasonably sought at this time.

I should like to join with the Secretary for Overseas Trade in congratulating the staff of the Export Credits Guarantee Department. They have done a very good job. I should like to know from the President of the Board of Trade whether the Government economy drive will affect the Export Credits Guarantee Department in any way. I struggled a long time ago to obtain and increase the staff and eventually secured it. I hope the Department will keep that increased staff, because it is by having a high standard of service from those employed that the work can be carried on. Any interference with the staff might result in Government economies on the export drive and that would be most undesirable.

I should like to know how the export drive generally is being covered by credit facilities. I do not know how successful the dollar drive has been and what proportion of credit it takes. I should like to know what has happened in Asia and Europe and how the Commonwealth countries are affected. We should like to know how the credit facilities are operated in different parts of the world. That knowledge would be useful for some of us in doing all we can to help along the work of the Department.

I understood that when the Secretary for Overseas Trade said that the money had gone in the past to the Treasury the President of the Board of Trade said, "Never again." Is this a new policy? If so we should like to know something about it; perhaps the President can give us more information.

The Export Credits Guarantee Department helps our traders to do overseas work, to export and to enable this country to secure a viable economy. The resources and craftsmanship of our industry merit that, but the oil is provided by the Department in the form of credit facilities. It is most essential that the export trade should be maintained at the highest level. This Department helps to do that. It is the best compliment that can be paid, and again a very strong reason why the Conservatives should take more notice than they do of the Labour Government that here are a body of civil servants doing a thoroughly commercial and technical work with great success. We on this side of the House will do all we can to foster that work and help its development.

8.16 p.m.

Mr. Edwin Leather (Somerset, North)

I should like to make three points, very briefly. As it is the custom of the House when we discuss these Export Guarantees Bills—the third with which I have been concerned—to declare one's interest, I must tell the House that last year I said I was one of the Department's customers. Today I am far and away its biggest customer, and I have had the pleasure of negotiating with it on matters involving millions of pounds.

First, in reply to the right hon. Member for Rochester and Chatham (Mr. Bottomley) the development of this Department had nothing to do at any time with any political party. To endeavour to take credit to his friends for its development was a great deal less than generous and somewhat unusual for him. The most notable of the people responsible were the present Comptroller-General and his predecessor, Sir Frank Nixon. It will be a great pity if it went out of this House that any group of politicians was endeavouring to steal the credit.

Mr. Bottomley

I gave praise to the work of the Civil Service, but what I said was that the policy as a result of which they carried out that work was decided ultimately by the Labour Government.

Mr. Leather

It was, of course, decided by the Government in power, but only after the greatest pressure had been brought to bear upon them by the two gentlemen I have named.

Mr. H. Wilson

I am sure the hon. Member would wish to be fair to the successive Comptrollers-General. I am sure he would wish to list the Comptrollers-General who preceded the present Comptroller-General. I am sure he did not intentionally wish to miss them out.

Mr. Leather

I am much obliged to the right hon. Gentleman for that intervention. I want to be fair to them all.

This Bill gives an opportunity of a general review. I probably deal with the Department a good deal more than the Minister does or his predecessor did and I am always glad to pay my tribute to the staff. I know them all personally and we know what we think of each other. They are going through a very difficult time and would ask the Minister to take a careful note of that fact. In the course of the last year or two they have become so overloaded for domestic reasons that there are dreadful delays in getting decision from the Department. It has been said rightly that the Department is a successful Department because it operates on a commercial basis.

The Secretary for Overseas Trade has given a very clear illustration of how the Department works and of the job it does to help the export drive, but when an exporter has an offer it is most important that he should be able to give a decision. Somebody sends an order from Bombay or an agent arrives from New York and wants to place an order. It is absolutely no good whatever if we have to wait five, six or even seven weeks to hear whether or not we can do it.

I have here detailed figures if my hon. Friend would like to see them. I do not intend to burden the House with them. They concern technical matters. But the average time for getting decisions is over four weeks and for getting approval for particular credit limits—a technical matter of great importance—it is running from two to three and even four weeks. This does very real harm. I believe that one of the reasons is because of the shortage of staff, and in case anybody on the other side of the House should hasten to make capital out of a Conservative argument for more civil servants, may I say that that is precisely what I am doing, because this is a commercial Department and not an ordinary Government Department.

It is quite unlike all other Government Departments. This particular Department operates as a commercial concern. [Interruption.] Hon. Members opposite have very little experience of commerce and perhaps they do not understand. This Department does operate as a commercial concern, and whatever extra staff it has it will not cost the taxpayer anything. On the contrary, it will earn more money for the Government and give a greater service to the taxpayer. I hope that the Minister will very seriously consider this question of the shortage of staff and also the question of delays.

There is one further point which I had not intended to raise, but which I think comes up in view of some of the very interesting figures which my hon. Friend gave the House. He noted the volume of business which has been turned over in the last 10, 15 and 20 years. He also noted the amount of claims paid and the amount of recoveries from the claims. In other words, one gets a comparison of the net loss of this Department, compared with the turnover from which I, knowing something of that turnover, can make a fairly quick calculation of the premium earned. I would say that it indicates that the rates are far too high.

This is a point which I have frequently argued with the Civil Service. They say that in relation to the liabilities on their books the rates are not too high; that, if anything, they are too low. But insurance is a commercial proposition and the loss ratio in any insurance should bear some reasonable relationship to the volume of business done; and when the loss ratio is about 5 per cent. far too much money is being made.

These figures—which I had not heard before and about which I did not know—indicate to me, as an insurance man, that there is a real argument for reviewing these rates, not only as the Civil Service must do in relation to the liabilities on their books but, over a 30-year spread, in relation to the profit margin during that time, because it is fair to say that the more we can get the rates down the more business will be done and the more service this Department can give, as it has done in the past, to exporters in this country.

8.25 p.m.

Mr. Harold Wilson (Huyton)

The hon. Member for Somerset, North (Mr. Leather), with his customary vigour, has this time turned the usual Conservative argument right over on to its head. The thing we usually hear from the Conservative Party is that the Civil Service are all right doing a job such as that of the Prison Commissioners and the usual things which they allow Government Departments to exist for, but that when one gets the Civil Service running a commercial department they cannot do it efficiently—that is a job only done by private enterprise. But the hon. Member now says that it is only when one gets the Civil Service running a commercial department that they can do an efficient job—

Mr. Leather

I did not say that.

Mr. Wilson

And the other Government Departments are—

Mr. Leather

I did not say that.

Mr. Wilson

If I misrepresented the hon. Member, I apologise.

Mr. Leather

The right hon. Gentleman did.

Mr. Wilson

I do not intend to spend much time on the speech of the hon. Gentleman, because I hope to hear a little more about the Bill—what the Bill is for and whether it is necessary. I must say that it gives me very great pleasure to support my right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) in expressing a welcome to this Bill. I was at the Board of Trade for four years in both the capacities represented on the Front Bench opposite, and I saw a good deal of the Export Credits Guarantee Department.

As the hon. Gentleman said, it has been the desire of both parties in this House to further the work of that Department, and we have had successive Acts, of which the Overseas Trade Act, 1929, was quite a remarkable Act in its way. Then there was the Export Guarantees Act, 1937, the Export Guarantees Act, 1939, the Overseas Trade Guarantees Act, 1939, and the Export Guarantees Acts, 1945, 1948, 1949 and, of course, the latest Act of 1951, which confirmed and extended certain of the powers of the Department.

I think that the success of the Department has been shown by the tremendous growth in the volume of business transacted by it. The hon. Gentleman gave some figures but I do not think he gave them all. Before the war this Department was handling business to the tune of about £61 million. In 1941–42—the war years—that had risen to £108 million; in 1947–48 it was £186 million; in 1948–49 it was £280 million; in 1949–50, £362 million, and last year, 1950–51, it was £466 million. This is a tremendous development in the work of this Department.

There is no doubt—and the hon. Gentleman is quite right in saying this—that it has played a very large part in the development of our post-war export trade. The Secretary for Overseas Trade gave the figures of exports in 1951 and showed how much they had increased compared with 1950. There was an increase of £500 million. I could not help thinking, when he gave those figures, of the broadcast of the Prime Minister on 11th February, 1950, at the time of the Election, when he said that our native enterprise, contrivance and genius was paralysed by a Socialist Government. Yet we saw under a Socialist Government the tremendous increase in export figures referred to by the hon. Gentleman.

Mr. Leather

Despite it.

Mr. Wilson

I will not enter into a discussion of a doctrinaire nature with the hon. Member for Somerset, North, but it was because of and not despite the work of the Export Credits Guarantee Department that this great success was achieved. One reason the volume of business done by this Department has risen so much in post-war years is that post-war trade has been so much more risky all over the world and there has been far more risk to insure against. The Export Credits Guarantee Department have not merely provided their traditional service for dealing with those risks, but they have expanded their service as the risks became greater and more widespread.

Though the hon. Gentleman said little about this—and I hope the President of the Board of Trade is going to say more about it—I think the interesting development is the support given by the Department to third-country trade, that is, export merchants based on this country trading between second and third countries abroad, and—something which was dealt with in the last Bill before the House— the development of trade through subsidiary companies operating in this country.

I am sure the whole House will join the Minister and my right hon. Friend the Member for Rochester and Chatham in paying credit to the staff of the Export Credits Guarantee Department and especially to the Comptroller General, Mr. Somerville Smith. I think it is right to say that all the staff of this Department —and this is equally true of their regional offices, which are a very important development—are a complete denial of the usual Tory Press cartoons of the Civil Service. They are enterprising, business-like, commercial-minded, and not at all like the cartoons one sees in the "Daily Mail" and other newspapers favoured by hon. Gentlemen opposite. I have never met civil servants like those. One only sees them on the benches opposite. As my right hon. Friend has said, it is the success of public co-operation, carrying out a job of public enterprise in a field in which private enterprise has not dared to tread.

The Department has not only done that, but it has consistently covered its costs, taken more and more risks over a period of time and yet has provided something in the nature of a profit for the taxpayer. It has given good service. I think the hon. Member for Somerset, North, is almost alone in his complaint of excessive premiums. I have heard quite the reverse from many business men all over the country, and certainly in the matter of dollar exports, about which I wish the Secretary for Overseas Trade had told us a little more, they have been extremely enterprising and have taken far more risks than many firms in private enterprise who are supposed to be venturing into the dollar markets.

Mr. Leather

I am sure the right hon. Gentleman appreciates that I speak with some knowledge in that I deal with several hundred exporters, and I speak not just for myself but for many others. I can assure him that my remarks about the premiums are quite justified.

Mr. Wilson

I am well aware of the hon. Gentleman's activities and the particular form of insurance work which he carries on. It is perhaps significant that he, one of the largest private enterprise operators in this field, has to underwrite himself with the Export Credits Guarantee Department, even at this high premium about which he complains.

In the export drive of 1949, 1950 and 1951, obviously the thing on which this country had to concentrate above all was dollar exports, and one of the biggest tests which we could apply to the Department is—how did it co-operate in the field of dollar exports? The Department itself thought up one or two extremely enterprising ideas for giving aids to exporters. The Board of Trade suggested one or two ideas to that Department. I myself produced one or two ideas which I thought were extremely risky and venturesome to see what the Export Credits Guarantee Department thought of them, and the Department took them up, worked them out and put them into effect.

There have been facilities to finance, or to guarantee against the risks involved in, building up stocks in dollar markets; market research—referred to by the hon. Gentleman; even the financing of risks in connection with sales and advertising campaigns, which is a very risky development, as I think the hon. Member for Somerset, North, would agree; and in special cases assistance with tenders and insurances in respect of tenders for public works contracts abroad.

I will admit to the House quite frankly that I expected there would be losses on this kind of activity by the Export Credits Guarantee Department. I thought that at best they would be able to make up those losses from profits made on other sides of their business. I was quite prepared, if necessary, to come to the House for a vote of money to cover those losses, because this export trade was so important. What happened in fact was this—and I may not be quite up-to-date with this, and I hope the President of the Board of Trade will bring the House upto-date—that the Department has rendered most valuable service in the dollar market and has not involved itself in losses in its business with the dollar market. If that is so, I think it is a tremendous tribute to the work of the Department.

What we did not get from the Secretary for Overseas Trade was some statement of what the policy is to be for the future, especially with regard to the dollar export trade. Is it still the policy that the Export Credits Guarantee Department should provide this special form of assistance for dollar exporters? Are they still being as successful as they were? Will the President tell us how many dollar exporters there are now registered with the Export Credits Guarantee Department and enjoying these special facilities, and how they are getting on?

There was a rather disturbing letter in "The Times" this morning from a prominent business man who referred to his experience in the United States market. He said: The United States exports heavily to the rest of the world but has surrounded herself by high tariff walls. We all know that that is so. She requires to import only a few commodities like rubber and tin, and a few luxuries. A company, of which I am chairman, has established its own selling organisation in the United States for the sale of British textiles. But we are closing this down as we find that the expense of building up one's own sales organisation is not justified by the results, for the slightest trade recession cuts off foreign imports into the United States. That was a very determined letter to be in "The Times." I do not know whether the firm in question were aided by the Export Credits Guarantee Department, and it would be wrong of me to ask the President to tell us, because it is not right for the House to be told details of the transactions of individual companies with the Department; but I think the right hon. Gentleman should tell us whether that kind of letter is symptomatic of what is going on in the dollar market today. Is it general? Are firms which established themselves in 1949 and 1950—in some cases not without a good deal of pressure—now closing down their sales organisation and deciding that the dollar export market is too risky a market in which to stay?

Perhaps the right hon. Gentleman will tell us how many organisations which have been specially aided by the Department have had to close down their activities, perhaps in the past few months. I am sure he will tell us that the Board of Trade are giving both help and advice to dollar exporters and especially to new dollar exporters, and, in particular, encouraging people to get away from the New York beachhead and to get to New Orleans and the Middle West and the Far West, and so on. I have no doubt that he will be able to tell us that the Export Credits Guarantee Department is in a position to help with developments in those parts of the United States as well as in New York and in the principal selling areas in Canada.

I hope the President will not fail to tell us what progress is being made with the third country trade and trade with subsidiaries to which I referred earlier, because these are forms of trade which are very important to this country. I think the last two Bills before the House enabled the Department to give some very valuable help to that kind of trade.

There is one point which I am sure the hon. Member for Somerset, North, has come across many times in the course of his work. It is often said that the Department is unable or unwilling—that is often the suggestion—to make longer-term credits available for trade covering some little period ahead. It is pointed out by our exporters, and quite fairly pointed out, that other countries provide longer-term credit than is possible, for instance, with E.C.G.D.

I am not suggesting that E.C.G.D. would ever be in a position to compete with the American Export-Import Bank and offer a 15 to 20 years' credit for trade with South America. It is important, however, that there should be elasticity in individual cases. There have been such cases. I remember a year or two ago when it was important to get a development of trade in equipment with South America, which would involve a considerable amount of replacement and spares. That is a kind of trade which it is desirable to press and in which it is necessary to have some of these special credit arrangements.

Medium-term credits are obviously of importance, especially in trade with the Middle East. It is perhaps right that I should mention to the House that I brought such a problem to the attention of the Department some time ago. In the development of trade with Israel, I think we shall need a good deal more extension of the period of credit available to British exporters through the Export Credits Guarantee Department. There are other European countries, no better off financially than the United Kingdom, which are making credits for one year and two years for shipments to Israel and to certain other Middle Eastern countries—particularly shipments required for the development of those Middle Eastern countries, for constructional work and so on.

Obviously, everyone who knows anything about Israel appreciates that the biggest problem they have at the present time is their housing problem. It is common knowledge in this respect that there are firms in this country which have developed techniques of prefabrication which could give tremendous help in developing housing in Israel with no loss at all to the housing programme in Britain. I am thinking of some of the firms dealing in concrete which could provide the "know-how" to Israel and could also provide some of the equipment without any loss to our own housing programme. It is most desirable that this should be done.

In saying this about the Department, I am making no reflection whatever on the Department. Anyone who has had anything to do with them knows perfectly well that they are allowed no elasticity in this matter whatsoever. They are completely regulated by the Treasury. I hope the President will be prepared to fight the Treasury on this time and time again, for it is important. I hope he will be prepared to put up a fight for British trade and industry sometimes against the Treasury, whose interests are a little restricted and whose ideas, too, about this sort of thing are a little restricted.

I hope that more facilities will be given to the Export Credits Guarantee Department to provide rather longer-term credits in appropriate cases. I know that the country is not in a position to go in for any large overseas investment or any credits over a long period of time, but I mentioned the case of Israel just now, and Israel has obviously got a very great future in its industrial development and trade development, and it is right from every point of view—the political and diplomatic points of view, and from every other point of view, and not least from the point of view of the trade of this country—that this country should be closely integrated with Israel's great development, and we should not throw away this great opportunity because of the credit policy dominated by the Treasury's conception of what Wordsworth called "The love of nicely calculated less or more."

This Bill increases the limit to £750 million. We shall all welcome this fact. We shall all welcome it if the President comes back to the House—if he does: I do not think he ever will, though I am not referring to his expectation of political life, but to certain other considerations, so that I do not think that he will so come back—to ask for an extension of this figure of £750 million; but if anyone does come back to ask for it, we shall welcome that extension.

The reason we shall not see anyone come to ask for that in the near future is the doubt whether they will need this £750 million. In the first place, are exports going to go on increasing at the same rate as they have been increasing over the last two or three years? I know that the January figures were good. No doubt they sent the President home to bed happy the night he announced them, but it will not be long before he finds that there are seasonal variations and that usually January is a very good month. But we are, of course, facing greater difficulties in the export trade. Hon. Gentlemen opposite and on this side who are closely in touch with British industry know what difficulties we are facing now in the export trade.

The post-war development of exports, and the figures quoted by my hon. Friend, have been dependent as to about 50 per cent. on engineering exports. Can the President tell us whether he thinks that engineering exports will or will not continue? That has a direct bearing on the need for this Bill. I saw in the "Manchester Guardian's Commercial Review" one of the best reviews I have seen of the new industrial situation, and it said: It would be useful to be able to say whether business opinion as a whole, believes that British engineering exports can be maintained in 1952. We cannot draw any honest conclusion. In our own inquiries the majority of answers was undoubtedly against the maintenance of such exports. A number of firms expect defence contracts to divert some part of their output from exports. In some cases this has already happened. Others fear that raw material or labour shortages will reduce output, or at least prevent any growth. It stated lower down that a minority considered that engineering exports will increase, but it went on to say: It is useless to hope that re-armament will not interfere with exports. One firm was quoted as having said: The Ministry of Supply frowns on our exports. I hope that the right hon. Gentleman will wipe that frown off the face of the Minister of Supply and get all Departments to encourage engineering exports even if it may mean some interference with the re-armament programme, about which he made eloquent speeches in the country not very long ago.

It will be interesting to know whether the right hon. Gentleman expects engineering exports in 1952 to increase markedly above the 1951 level, because by this time he must have given up much hope of a big increase in textiles, clothing, and other consumer goods. There is a world slump in those commodities, and if engineering exports are to be limited he has really got to make a second speech to make a case for this Bill and to make a case for the extension up to £750 million.

My right hon. Friend asked for a little more information about the facilities being provided for trade to individual markets or groups of markets. I think that is important, and I think it is a deficiency on our part not to have asked more. We ought to have more information, and have it broken up by groups of countries, about the work done by the Department. It would be interesting to know how much is going to South America, the Middle East, the Commonwealth, and so on.

One of the things that disturbs many of my hon. Friends as regards this Bill is the use that is to be made of the Department in financing trade to Eastern Europe. When I moved the Second Reading of the previous Measure on 2nd February, 1949, I said: I know that those who have experience or knowledge of trade with Eastern Europe at present realise how valuable the Export Credits Guarantee Department has been, and how much more valuable it might be under this new Bill, in helping trade with that part of the world."—[OFFICIAL REPORT, 2nd February, 1949; Vol. 460, c. 1688.] I mentioned capital goods to Eastern Europe at that time. It would be interesting to know what assumptions the right hon. Gentleman is making about the exports to Eastern Europe in 1952. It is a problem of capital goods and of the strategic controls which were put on, and for which I take my share of responsibility, though I still say that it is wrong and would be wrong to aid the shipping of munitions equipment. I say that, in the present state of world affairs.

But I hope the right hon. Gentleman will look at this from the trading point of view of this country and not the international political point of view. I suggest to him that the time has now come for a thorough, expert, practical review of the controlled list of shipments to Eastern Europe. I think he ought to look, for instance, to shipments of rubber, because this is at the present time restricted by certain controls. It is really very hysterical to say that, because this might be used strategically, we ought not to let them have it, since in return for it we are getting timber which is going into our strategic reserves.

The Government made a Supplementary Estimate which had the purpose of putting Russian timber into our strategic reserves. The Russians are sending us strategic material, and really some of the controls that we have on shipments at the present time are very pedantic indeed, and at this time, when our dollar problems are so greatly affected by the demand for rubber and by the price of rubber, obviously to open up a new market for rubber at this time would not only be useful in itself but would help to put up the price of rubber and to increase the dollar earnings of the sterling area.

We have had—and the Board of Trade have always been very closely identified with this—during the past two or three years about 350,000 standards of timber from Russia coming into this country—the equivalent of about 250,000 houses. In 1948–50, in three years, we have had £38 million worth of feedingstuffs from them —about one-third of all the feedingstuffs coming to this country—and hon. Members who earlier today were debating agriculture know how important that is. That was in 1948–50, and there has since been about another £20 million worth. That is a total of about £60 million worth of grain from Eastern Europe. If the right hon. Gentleman would divert his attention—when the Chancellor will let him—from some of the irrelevant Measures which are to be introduced, and which it would be out of order to discuss tonight, and pay more attention to the prospect of trade with these countries and other parts of the world, he would be doing far more for the industrial and economic recovery of Britain.

I hope that he will tell us something of the guarantees required for commodity trading, particularly between third countries. There is the question of Hong Kong —obviously an important centre for the activities of the Export Credits Guarantee Department. I hope that the right hon. Gentleman will tell us tonight that his influence is such that all these paralysing restrictions on Hong Kong trade are to be removed. He has had plenty of time to get down to that by now, and I hope he will make that announcement tonight.

Recently "The Economist" carried a very disturbing article on the Hong Kong trading situation, which I am sure he has read, showing a decline in the quantity of their trade of 30 per cent. over the past year, and a decline in their trade with China of 80 per cent. over the past year. I commend to the right hon. Gentleman some of the things "The Economist" says about that, and about the very serious effect it is having upon the trade and prosperity of Hong Kong, the earnings of the sterling area—which are of great importance to this country at the present time—and also the growth of unemployment in Hong Kong because of these paralysing restrictions. "The Economist" says particularly: There is acute mistrust in Hong Kong of Japan and growing fear that Japanese trade competition, encouraged by the United States, may deal a heavy blow to the Colony's interests. It is felt to be unfair that the Americans should strongly condemn British or other Allied interests suspected of trading with Communist areas; but if the Japanese do the same thing it is always considered a necessity, and even sometimes a virtue. Recently, for instance, $1 million worth of Japanese grey sheeting was sold to Communist China, and the deal was financed through Hong Kong. I do not know whether that deal was financed by the Export Credits Guarantee Department, but if it is financing trade of this kind with China it ought to be financing Hong Kong trade and not Japanese trade.

The other thing which I hope the President of the Board of Trade will tell us is something about which I asked him in the last debate, when I was very disappointed not to get an answer—although I am sure he intends to make that good tonight. What is he doing about shipments of rubber to China, because that is of direct importance to this Bill? If he says "No" to all these things, or that he does not know, then he is not making his case for this £750 million. If, on the other hand, he says there is to be some resumption of rubber shipments to China, then he is making a very good case for these facilities being voted to the Export Credits Guarantee Department.

In the famous debate when the Prime Minister used those alarming words about following America at all cost, I was disturbed and concerned that my right hon. and learned Friend the Member for St. Helens (Sir H. Shawcross) should have announced a policy of cutting off supplies of rubber to China until the end of 1951. We are now past the end of 1951 and into 1952, and as far as I know there has been no statement from the Government about whether rubber shipments are to be resumed. If we are not told that rubber shipments are to be resumed, even on a restricted scale, they are in effect announcing a change in policy, because the policy was a stoppage until the end of 1951. If shipments are not to be resumed in 1952 there is a change in policy, and the right hon. Gentleman ought to come to the House and tell us about it.

I have asked a number of questions, and I wish to leave sufficient time for the right hon. Gentleman to reply to them, as I am fully confident he will. I am not opposed to the Bill. I very much welcome it. However, I am not yet convinced that the right hon. Gentleman's policy is such that he will need the Bill. I am sure we should all like to be certain that he will alter his policy so that the money voted for the Department will be needed. All parties in the House have welcomed what the Department have done, and have complete confidence in those who run the Department. But I, for one, have not confidence that the Department and Britain's export trade will be allowed a clear run to do everything they are capable of in the export market.

On the specific question of trading facilities of particular kinds with particular countries, and the granting of credits for a period of time, I hope that the Treasury will allow more elasticity, both to the Board of Trade and the Export Credits Guarantee Department. The right hon. Gentleman used the phrase "operating with freedom and flexibility." He should make those words mean something, but to do so he will have a fight with the Treasury first, and I wish him luck. The Export Credits Guarantee Department know more about trade than the Treasury will ever know; they have a vast experience.

It has been interesting in these postwar years that the commercial diplomatic service, of which the right hon. Gentleman has had experience, has been expanded, and has drawn on staff provided from the Export Credits Guarantee Department. There has been recently an ambassador, much admired by everyone in this House, who served his apprenticeship in the Export Credits Guarantee Department, and we all deplore his passing a few months ago.

That fact has shown that the Foreign Office, at any rate, have recognised the great commercial knowledge and experience of the Export Credits Guarantee Department, and if only the Treasury will for once recognise that the Department—even if they will not recognise it in the case of the Board of Trade—know more about trade and industry than they do, then the export trade of the country will be given a freer hand. If that happens, then the £750 million which the House is being asked to approve will be an instrument in the hands of the Export Credits Guarantee Department of inestimable value to the trade and future of this country.

8.56 p.m.

Mr. William Shepherd (Cheadle)

I am sure that the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) has gone out of his way politically to make much heavier weather of many things than is really necessary. I do not believe for one moment that he thinks that the need for the increased figure for which my hon. Friend has asked depends upon whether we free to some extent our trade with the East and with Eastern Europe. I agree that all these problems are of great consequence to this country and to the whole world, and that they admit of far more than one point of view; but I am certain that he is running a political hare in this discussion.

My sole reason for rising tonight is to plead with the Board of Trade to do something for my part of the Manchester area. We are, as I think the House knows, a very substantial trading area and we have particular problems, especially those connected with the textile industry. We have tried for some time to get a representative on the Advisory Council but we have not so far succeeded. I hope that my right hon. Friend the President of the Board of Trade will take an early opportunity of getting a Manchester representative on the Council. The Council has become very important, and the Manchester area and the textile trade would be extremely gratified if this could be done.

I approve wholeheartedly of the Bill. I doubt, as did the right hon. Member for Huyton, whether this total amount will ever be needed, but I do so, perhaps, for rather different reasons, and I hope that the Department will continue to give the service to trade which it has done in the past.

8.58 p.m.

Mr. I. Mikardo (Reading, South)

I, too, should like to intervene briefly to give support to this Bill, which is designed to extend the activities of a nationalised enterprise which, in the first place, does a considerable service to private industry which it is either unwilling or unable to do for itself, and, in the second place, makes a handsome profit in the course of doing it.

I do not understand how right hon. and hon. Gentlemen opposite who have today paid tribute, and well-justified tribute, to the helpful and profitable activities of the Department can reconcile what they have said now with all the things which they have said in public in the past, especially during the Election in October last, about nationalisation always resulting in losses. I heard a great deal about that, and about anything which is run by a Government Department being bound to be inefficient.

I listened with great interest, during that hectic period, to many people now sitting upon the benches opposite discoursing upon industry, both public and private, and I confess that for so long and as carefully as I listened I did not hear anyone pay any tribute at all to the work and performance of the Export Credits Guarantee Department. They seem to have discovered it for the first time.

I am sure that the President of the Board of Trade knew of the existence of the Department before he brought this Bill along. I am sure he knew about it between 5th and 26th October last, but, though I read with great care reports of many of the orations he made, and even went to his constituency to get some first-hand account of what he was saying, I found no record whatever, in his speeches to the good people of Monmouthshire, of any tribute to the work of the Export Credits Guarantee Department. The right hon. Gentleman's interest seemed to be road transport and something of which I never really got the hang—analgesia.

It is good to see the education of right hon. and hon. Gentlemen opposite proceeding at this fast pace. It will be a sheer delight, the next time some of them rant about the inefficiency of people in the public service, to quote some of the delightful and flowery language which they have used tonight. They will find that equally difficult to reconcile with whatever it is they keep in the place where other people keep a conscience.

We always listen with great interest to the contributions by the hon. Member for Somerset, North (Mr. Leather), which are sometimes well-informed and always lively. His principal complaint against the department was that its premiums are fixed too high. One is entitled to ask two questions of anyone who takes that view. First, if the premiums are too high, how does it come about that the business which the Department has done has shown this enormous increase in almost geometric progression from year to year?

Surely this is a matter in which the proof of the pudding is very much in the eating? If the premiums had been such as to injure the prospects of doing export trade—that is the only thing that can be meant by saying that they are too high—one would have expected the amount of insurance placed with the Department constantly to decrease; but, as we have heard, instead of doing that, it has increased very sharply.

The hon. Member for Somerset, North, said that he was not alone in thinking that the premiums are too high and that many other people thought it. The hon. Member is not only an honourable but also a very persuasive Gentleman, and I daresay that the opinions of the other exporters to whom he has referred have not been formed without some influence from the hon. Gentleman. If that is what is thought by these people, one is entitled to ask them: If the premiums charged by the Department are too high, how does it come about that other insurers do not cut into this highly valuable business? where is the law of supply and demand?

Mr. J. R. Bevins (Liverpool, Toxteth)

The hon. Member has put the question which the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) also put: Why do not private insurers come into the market to compete with the Department? I should have thought the hon. Member would have known that the principal reason for that is that private insurance companies do not cover the same risks as are covered by the Department.

Mr. Mikardo

Why not?

Mr. Bevins

I will tell the hon. Member. One of the risks they do not cover is loss to traders as a result of war. I do not suppose that any hon. Member would suggest that war risk is a legitimate risk for private insurance to cover.

Mr. Mikardo

I am deeply grateful to the hon. Member for making for me in advance the point I was about to make. I am glad to have his support. I am making precisely the same point, that here is a class of business which the private insurance companies were unwilling to take and are still unwilling to undertake.

There is no law which limits the risks which private insurance companies should cover.

Mr. Bevins

rose—

Mr. Mikardo

If the hon. Gentleman will wait a moment I will give way as much as he wants. I am enjoying his interventions.

Insurance companies can cover anything they want. There is very little they are statutorily debarred from covering; indeed, in the past they have shown no reluctance to extend the type of risks which they would cover when they decided so to branch out. They went into one class of insurance, then into another and then into another. They agreed on each extension at the moment when they decided the extension was profitable or had a lot of cream in it. There is nothing to prevent an insurance company insuring any man against his wife having triplets or against the Conservatives winning the next Election. That can be insured for about Is. 6d. per £100. I have never known the insurance companies to be very diffident about dipping into any gravy that was lying about.

Mr. Bevins

I can clarify the hon. Member's mind by putting to him a simple question. Most of the insurance companies in this country are proprietary companies which are doing a wide range of insurance business. Would the hon. Member like the company which had a life assurance on his wife and was looking after his money to undertake war risks?

Mr. Mikardo

The company which insures my wife does not ask my permission to undertake any new sort of insurance. The hon. Gentleman's question clarifies nothing, which, in advance, is what I feared.

It really does not matter what the policy holder thinks about the scope of the activity of the insurance companies. It is the directors, the shareholders and the managers who decide upon this scope. I see that the hon. Gentleman does not controvert the statement that I made, that in the past insurance companies set out to cover one sort of risk and never hesitated to add fresh sorts of risks without considering the feelings of the policy holders, the policy holders' husbands or any other single factor other than the simple question of how much profit there was in the business. I do not blame them for it, and I do not make any criticism of it. The insurance companies were set up to insure and to make a profit, and they never launch out into any new venture if it is not profitable.

I am quite sure that if they thought there was any undue amount of gravy in this business of E.C.G.D. they would have been in it first. If it were a fact, as the hon. Member for Somerset, North, has said, that E.C.G.D.—let us not mince words—were profiteering there would be a queue of prospective profiteers all the way from here to the head offices of every insurance company. In fact, the absence of any competition in this difficult field indicates that the rates fixed by E.C.G.D must be about right.

Here is this law of supply and demand, which hon. Gentlemen talk about as a classical feature of free competition. They argue that nobody would be able to exploit the community, because as soon as anyone began to demand more for his commercial services than they were worth, along would come some other person and offer the same commercial services for less money. No competitor has come along and offered the same services as E.C.G.D. for less money, so I am prepared to be sufficiently, if temporarily, an apostle of the doctrine of free competition in order to accept it as a fact from that premise that there cannot be any exploitation of the commercial community by the Department.

I had not expected to dwell so long on that topic, Mr. Speaker, but, as you will have observed, I have been subjected to a certain amount of provocation, and of confusion which arose undoubtedly out of a well-motivated but somewhat ham-handed attempt to clarify the situation.

Another point arises—it was raised by my right hon. Friend the Member for Huyton (Mr. H. Wilson)—about the desirability of encouraging, as far as possible with the help of E.C.G.D., exports to the Middle East, and particularly to Israel. I spent some time in the Middle East a year ago and I found almost everywhere there a passionate desire to buy British capital equipment. In some cases they wanted capital equipment which we could not have supplied, or would not have wanted to supply because it was of greater use in this country. In other cases they were willing and anxious to buy British capital equipment of types which British manufacturers are anxious to export, but they found themselves using equipment from Switzerland, Sweden, France and the United States of America.

They were doing so unwillingly and would sooner have had the British equipment. They believed that in many cases they would have got more reliable equipment and, equally important when you are using capital assets in the shape of machinery from overseas, a more reliable spares service. Over and over again I went into a factory and found equipment being used which was less suitable for the purpose than British makes, such as machine-tools and woodworking machinery. In one great plywood factory they were using American veneer cutters much less suitable than British cutters. I asked them why they had chosen the less suitable type of equipment. They replied, "We know it is less suitable and we are not very keen about using it. We have to run it below its proper speed for the job. We use it because we get some credit in respect of the American machines and none on the British machines."

In fields like this, a single capital sale is valuable—I am sure that the Secretary for Overseas Trade appreciates this point —because it results in continuous spares sales. The machines I have mentioned use quite a lot of spares. We may get a one-time sale worth £50,000, and thereafter a steady, and probably cash, business of £4,000 or £5,000 a year in spares for the one machine. It seems a pity to lose this trade from unwillingness to give credit, or willingness to give it only for periods very much shorter than it is given by other nations, including some whose economic stresses and strains are no less great than our own.

One has to keep a sense of proportion in all these matters and to weigh up relative priorities and needs, but other countries do the same as well and I have the feeling—if I am wrong, I hope I shall be corrected—that in some of these matters we are taking a slightly less longterm view than some of our competitors in other countries. That is not because the manufacturers and suppliers take a less long-term view, but because it is taken by those who have it within their power to create and to grant the credit facilities without which so much of this business cannot be done at all.

In spite of the general welcome which this Bill has received, I hope that when the President of the Board of Trade winds up the debate he will give us the information for which he has been asked. I hope, in particular, that he will be able to tell us that there is some hope, not even of increasing but of maintaining our exports overseas and the exports for which the services of E.C.G.D. are required.

It now becomes all too patently evident that those who were saying rather less than 12 months ago that the rearmament programme was an economic possibility for this country, that our export drive was an economic possibility for this country, but that the two taken together would be like trying to get a quart out of a pint pot, were right in their forecasts. It is now all too sadly evident that those who were saying then that one effect of the re-armament programme would be to slow down enormously our rate of exports were right in their forecasts. Nobody takes any pleasure in having been right in those forecasts, but it is a fact which we have with us and which we have to face.

Perhaps the best way to face it is for the right hon. Gentleman to do something to reverse it. If it is the fact, as has been said publicly in the "Manchester Guardian Review," from which my right hon. Friend the Member for Huyton (Mr. H. Wilson) quoted, that the Ministry of Supply are telling firms to stop manufacturing for export in order to release capacity for the armament programme, then that is something about which the President of the Board of Trade ought to roll up his slevees and go running into the Cabinet room.

One hopes very much that in these matters he will see that the interests of the British export trade are not too readily sacrificed to those who are willing to sequestrate an undue proportion of the engineering output of this country to so called Defence purposes.

As a last point I want to repeat one which I made in another context and in another debate which, if I may say so, is highly relevant to the matter we have under discussion now, because we are trying to discover ways of compelling E.C.G.D. to use all its £750 million of new limit that we are giving them in this Bill. If it were a fact that we were losing engineering exports because engineering exports were being taken off machine tools in order to make room for armaments goods going on to those machine tools, that would be bad enough. In fact, the situation is much worse.

I have myself been in to many factories in the last three or four months in which the situation is that engineering export goods have been taken off machine tools to make room for defence goods going on to those machine tools. However, because of the dislocation and the failure to plan adequately, the defence goods have not been ready to go on to the machine tools. And so we get all our kicks and we lose all our halfpennies; we lose our exports in the interest of defence goods and then do not get the defence goods for which we have lost our exports.

I know that the Minister is concerned about these matters. I know he is anxious to make a success of his job—someone on that Front Bench had better make a success of a job anyway. I know that he has this matter at heart and I plead with him to find out not how much engineering export capacity he is losing in substitution for defence goods but how much engineering export capacity he is losing every day with nothing to substitute for it because of the dislocation caused by an ill-digested defence programme. I do not doubt that he will remind me it was a programme initiated by a Government of which I was a supporter. I will take that one, and take it right on the chin. It may give him a moment of satisfaction, but the problem still remains.

I join in welcoming the Bill, but I hope that the Government, and the Minister in particular, will face boldly and with courage the very many problems which at the moment face the Department, because they also face our export trade.

9.21 p.m.

Mr. Geoffrey de Freitas (Lincoln)

The whole House was interested in the firsthand account given by my hon. Friend the Member for Reading, South (Mr. Mikardo), of seeing in the Middle East certain evidence of a decline in our export drive. I shall not detain the House long, but I must refer to something that I saw myself in the Middle West of the United States on two visits in 1949 and 1950.

At the Chicago Trades Fair in 1950, for instance, one of the lines which was selling best was some hideous furniture made in this country. It was selling best because the man who made it went out and spent many months in the Middle West, going to the towns of about 10,000 population and finding out what they wanted, and not relying on reading the "New Yorker" and thinking that that was evidence of the taste of 150 million people in the United States. He was a man in a small way of business. He happened to be a man of enterprise, a man who went out and got the business.

We all know that the large exporter can run his own organisations in market research and finds no difficulty. The small exporter, the man who has not the facilities and the great knowledge which is required even to know the need for market research, is the man who must be encouraged by the Government to sell his goods, especially in the dollar area.

What was the organisation to which it was most appropriate for this small man to turn? It was the organisation of the British Export Trade Research Organisation. B.E.T.R.O. was an organisation set up partly with Government money and partly with money from industry and commerce. Gradually, it decided to do without the Government money and it concentrated entirely on the money coming from industry.

B.E.T.R.O. died at the end of last month, because it was let down by businessmen in this country. It died because these men would not realise that the sellers' market was not going on for ever. They would not realise that it needed enterprise, drive and imagination to continue in the battle for markets.

Mr. F. A. Burden (Gillingham)

Does the hon. Member at last admit that while exports have been so high, it has been very largely due to the fact that there has been a sellers' market in the world and not due to the activities of hon. Members opposite when in power, as they so often claimed?

Mr. de Freitas

No, I would not admit that for a moment. I am trying to compress my remarks, and I may have slipped over this rather lightly, but I am reluctant to go back and develop the point at greater length—that it was really the larger firms to which I was referring as successful, particularly the motor car firms, who have their own expert knowledge of marketing conditions and are able to provide those things that will sell in a particular country.

I suggest that it is the Government's duty to prod the businessman who does not realise the importance of market research, and to see that he continues working in the country's interests by exporting. I want to know what the Government are going to do to help the small exporter now that B.E.T.R.O. has been allowed to die. I would remind them that, just as B.E.T.R.O. died, there was born on the other side of the world an organisation copied exactly from B.E.T.R.O.—the Japanese Export Trade Research Organisation, and that, as the Director-General of the British organisation announced at his Press conference, when he stated that B.E.T.R.O. was to be wound up, the Japanese organisation has paid him a compliment by electing him an honorary vice-president.

9.27 p.m.

The President of the Board of Trade (Mr. Peter Thorneycroft)

The Bill which we are discussing is the special responsibility of the Secretary for Overseas Trade. Those associated with this matter will know that a certain statutory responsibility is placed upon his shoulders for the work of the Export Credits Guarantee Department. I certainly do not want to add to the very illuminating survey which he gave of the background of this particular department, because I think the House will agree that he developed it at proper length and gave a very clear picture, both of its history and present technique.

We have had a short debate upon it, and it is, after all, an important subject. It covers the export trade from this country to the whole of the world.

Mr. Geoffrey Bing (Hornchurch)

rose—

Mr. Thorneycroft

Perhaps the hon. Gentleman will allow me to continue my speech. It covers a wide range of our export policy, and the Bill which we are now discussing contemplates an increase in the total liability of some £300 million, which is no small sum of money. I think the fact that we have had a fairly short debate is not due to the lack of importance of the subject, but to the fact that hon. Members on all sides of the House are really in a large measure of agreement about the proposals which we are putting forward.

Most politics are inseparable from controversy, but there do come instances where, perhaps fortunately, we do find ourselves momentarily in agreement, and I think this is one of them. The Conservatives like this sort of enterprise, which is that sort of Government activity which assists the private trader. The Socialist Party are equally proud of it. It is, after all, a public enterprise, and, perhaps what is still more remarkable about it, a successful public enterprise.

It is remarkable in the sense that the Minister responsible has been accused of making it too profitable, and I know of no other Minister responsible for public enterprise who ever had that accusation made against him. [HON. MEMBERS: "What about the Post Office?"] It seems to me that the Post Office is just another matter with which the Conservative Party has been associated in its development, and which has also proved a profitable one.

The right hon. Member for Rochester and Chatham (Mr. Bottomley) asked me a number of questions to which I would like to reply. He asked me whether it was possible to describe or divide the various activities of these export guarantees between the Commonwealth, the United States and the Iron Curtain countries. What I can say is that so far as the Commonwealth are concerned, excluding Canada, we cover through the activities of that body 8 per cent. of the total trade. In the case of the United States and Canada, which I put together as both being dollar countries, we cover 9 per cent., and in the case of the Iron Curtain countries we cover 10 per cent.

But I think the most illuminating fact is that since 1945, when we covered 5 per cent. of the total United Kingdom exports, the figure has increased to 13 per cent., which gives a clear indication of the extent to which traders are increasingly using the facilities available to them through this organisation.

Mr. Bottomley

Perhaps the right hon. Gentleman would give me the information for which I asked later. I did not ask about the Iron Curtain countries. I asked especially about Asia and Europe as a whole.

Mr. Thorneyeroft

There are many ways in which one can divide up these figures, but I will find the information about the Asian countries separately if the hon. Gentleman wishes.

My hon. Friend the Member for Somerset, North (Mr. Leather), said he had one complaint to make about the activities of this body—the delay which took place in the giving of quotations. I want to say right away that the Department themselves are conscious that sometimes they cannot give a quotation as early and as quickly as they would wish to do. It is not easy to give quotations on some of this business. The rapidly changing terms of trade and the import and export regulations throughout the world which are constantly changing make the giving, of quotations on this type of insurance quite a difficult matter. In fact, the average delay in issuing quotations is between 15 and 21 days on the initial quotation.

The Department are not satisfied with that. They intend to use every endeavour to speed it up. But their credit service, that is to say, the information service which they have about buyers throughout the world, is not only a great facility, but takes time to extend. They have current information about some 120,000 buyers, and there are about 2,000 new buyers' files opened each month. Then there are about 12,000 applications for credit limits every month. All those things mean some delay in giving a quick quotation to a trader who wishes to do business. We are conscious of it, and may I say on their behalf that, on balance, I think they have done a very good job. By every means within their power they will seek to increase the speed of these quotations.

My hon. Friend also went on to say that the premiums were too high. He was speaking as a customer, and that is a perfectly legitimate thing for a customer to say. He also said we were making too much money. I do not want to repeat what I said before, because it created a certain amount of irritation, but I do not think there is any harm in a public undertaking making money. It is certainly better to make it than lose it. If we look at the reserves built up we find that they now amount to only 31 per cent. of the liabilities. Compared with commercial undertakings of that type, I do not think that figure could in any way be said to be excessive.

The right hon. Gentleman the Member for Huyton (Mr. H. Wilson), addressed the House and he, too, paid a tribute to the staff, in which we all join. He asked me about the cover which was given on the external trade policies. I attach great importance to the external trade policies. I think it was a substantial and useful advance that that type of insurance was introduced. He will be interested to know that they have grown from a total of £37 million in 1950–51 to a rate of £60 million in 1951–52, which, I think, shows there was a need for that type of insurance, that it is appreciated by industry and merchants and is in fact being used.

The right hon. Gentleman asked me about the dollar drive. The Department has insured over 500 exporters and it has 218 guarantees current. I think everyone who has studied it would agree that the type of insurance they have developed in their joint venture policies is an imaginative and adventurous type. It has been widely used. I do not wish to exaggerate in this matter, but it has made a substantial and useful contribution in giving confidence to those exporters who wish to export to that very difficult market.

The right hon. Gentleman went on to ask me about certain types of guarantee to certain countries, and, in particular, he and the hon. Member for Reading, South (Mr. Mikardo), mentioned Israel. This Department is perfectly ready to consider and examine any insurance proposition of that character that is put before it. Their job and their desire are not to shut out insurance projects. But they cannot bind themselves in advance to accept any particular one and, as the right hon. Gentleman the Member for Huyton, knows very well, these things need very close examination before they can be entered into. But if either the right hon. Gentleman or his hon. Friend the Member for Reading. South, have any propositions, or anybody they know have any, let them come forward and I assure them they will be received with sympathy and that they will have detailed examination as in any other case.

Mr. H. Wilson

I do not think the right hon. Gentleman has quite got the point I was making. I know the Department would consider any proposition, however unorthodox, if it was going to help the export trade. But in certain cases which I remember when I was in his Office—and there have been some since—the Department were prevented by the Treasury Regulations from entertaining certain propositions because they involved credit over a period of time rather longer than the Treasury considered desirable. I should like the right hon. Gentleman to look into that. Perhaps he cannot give an answer tonight but I should be glad if he would try to persuade the Treasury to allow more elasticity than they do at present.

Mr. Thorneycroft

Whatever the right hon. Gentleman's experiences have been, my experience of the Treasury is that they will do anything they reasonably can to assist us in promoting the export drive. I do not think he will find any obstacle in that way, provided the proposition put forward is a reasonable one. If there are these proposals let them be placed before the Export Credits Guarantee Department and let them be examined on their merits.

Mr. G. R. Mitchison (Kettering)

rose—

Mr. Thorneycroft

Perhaps the hon and learned Member will allow me first to deal with the points made by his right hon. Friend the Member for Huyton.

The right hon. Gentleman went on to ask me whether I would forecast the future of exports in this country during the coming year. Well, I will not say that I would learn everything from my predecessors, but there is one thing, at any rate, which I could learn and that is the danger of making forecasts or of setting targets. These forecasts are, in practice, liable not to be fulfilled. [HON. MEMBERS: "Hear, hear."] If I might say so, the success or failure of the export drive will depend in no small measure upon the attitude of the party opposite—how far they are prepared to assure and to persuade people that sacrifices are necessary if goods are to flow out of this country.

Mr. Wilson

I am sure the right hon. Gentleman would not like to suggest to the House that in the matter of export forecasting the Labour Government did go badly wrong. On a number of occasions I think our forecasts were exceeded, and I do not think the right hon. Gentleman can complain when, particularly recently, we have been emphasising the importance of exports.

The question I asked was—and I did not ask him to make a clear or specific forecast—is he asking for this £300 million from the House because he expects exports to go on increasing considerably over our present figures—and, if so, by roughly how much—or is he simply saying that exports will not increase, but that a higher proportion of them will have to be insured through the Export Credits Guarantee Department because the world is getting riskier, and so on?

Mr. Thorneycroft

The answer is, quite simply, that the figure in the Bill—the extra £250 million in the case of commercial credits or £50 million in the case of special credits—is due not to one, but to several factors. It is due to the fact that prices are going up; it is due to the fact that trade risks throughout the world have increased rather than diminished over recent years and, therefore, traders increasingly seek services and facilities of this kind; and it is due also to the fact that if the measures we have put in train are successful the volume of exports will increase.

The right hon. Gentleman went on from that to develop a case which I must say I thought went a little wide of our discussion—about the future of our trade with the Iron Curtain countries. If I may say so with respect, I admire the skill with which he hung this argument upon the rather narrow thread of the two Clauses in this Bill. I think he was a little doubtful himself whether he would in fact get the speech over, because he had taken the precaution of having it published in the "Daily Worker" this morning, in advance. That paper said: Mr. Harold Wilson, former Labour President of the Board of Trade, plans to break the political truce in Parliament today. He will call on the Government to defy the American ban on East-West trade when the Export Guarantees Bill is debated.…A miniature foreign affairs debate will now take place, in which the Government and ex-Labour Ministers policy"— do not imagine that the Front Bench opposite get away with it altogether; they are going to be arraigned as well— will be challenged. Labour M.P.s will emphasise the need to do more business with the Soviet Union, China and the Peoples' Democracies.

Mr. Wilson

It is rather extraordinary for the right hon. Gentleman to accuse another Member of this House of circulating a speech in advance in any newspaper, particularly that one. I assure the right hon. Gentleman that I have not seen that newspaper today, and that until he read that extract I did not know it was in the newspaper.

I had no intention of intervening in the debate tonight because, if the right hon. Gentleman will read the public Press, I was billed to speak at a public meeting in Great Windmill Street—[Laughter.]—a perfectly respectable meeting. I do not know Windmill Street as well as hon. Members opposite. I was due to be there and it was only at 5 o'clock this afternoon that one of my hon. Friends agreed to deputise and, therefore, I was able to be present at this debate tonight; so perhaps the right hon. Gentleman will withdraw his statement.

Mr. Thorneycroft

I assure the right hon. Gentleman that I had no intention of accusing him of any impropriety in this matter. I know the energy with which the Press pursue these things, and in this case they certainly seem to have had a mind reader in the office, because they succeeded in producing something which had a remarkable similarity to the speech which the right hon. Gentleman decided, at the last moment, to give in the House. In any event, although I accept the right hon. Gentleman's argument that he did not give it to the "Daily Worker," I think he might almost have been well advised to have done so, because part of his speech went so wide of the subject matter of the Bill that I think we should scarcely continue into what—

Mr. A. C. Manuel (Central Ayrshire)

That is a reflection on the Chair.

Mr. Thorneycroft

—would be virtually a miniature foreign affairs debate at this stage in our proceedings.

Mr. Mikardo

On a point of order. Surely what the right hon. Gentleman has just said reflects very gravely on the occupant of the Chair at the time when my right hon. Friend was speaking. What the President of the Board of Trade has said—and I think I quote his words accurately—was that my right hon. Friend's speech was very wide of the Bill. In fact, Mr. Speaker, your predecessor in the Chair made no intervention at all during my right hon. Friend's speech. Surely the President ought not to say such things about the Chair.

Mr. Speaker

What is wide of the subject in the debate is a matter of degree. I was not here at the time to hear what was said, but what I am quite clear about now is that both right hon. Gentlemen concerned are tending to go very wide of the Bill before the House.

Mr. Thorneycroft

I fully accept that warning which you have given us. Mr. Speaker, and I will therefore conclude by saying this: that I am glad that this Measure has received a general welcome from both sides of the House. The Bill and this Department certainly provide useful facilities for the traders of this country and enable them to carry on exporting goods in difficult circumstances and to do business in parts of the world, from which they might otherwise in some cases be precluded. I think it is a valuable contribution to our export drive, and I hope the House will give the Bill a Second Reading.

Mr. Bottomley

Would the right hon. Gentleman say whether there is any change in our financial arrangements? In an interjection in the speech of the Secretary for Overseas Trade he said he would explain that and he said the Treasury would get no more money.

Mr. Thorneycroft

The system of the financial arrangements remains exactly the same as it has ever been. That is to say, if the Department makes some money that goes into the Treasury in the form of notional reserves. If the Department loses money it has to come to the House. If its income does not equal its liability the Department has to come to the House and ask for a Vote on account.

Mr. de Freitas

Will the right hon. Gentleman deal with the simple point which I put to him, even if he thinks it may have been a little wide of the debate? I merely followed his hon. Friend the Secretary for Overseas Trade, who mentioned insurance against losses incurred in market research.

Mr. Thorneycroft

I should not like to start a debate on what is an entirely different organisation and, indeed, a defunct organisation, and which is separate from that we are discussing.

Mr. de Freitas

What I was asking was what the Government will do to help the small exporter now that B.E.T.R.O. has been allowed to die.

9.49 p.m.

Mr. Geoffrey Bing (Hornchurch)

I had no intention of intervening in the debate, but after the speech of the President of the Board of Trade, it would be quite wrong if some hon. Member from this side of the House did not say a few words. The President of the Board of Trade complained that my right hon. Friend the former President had gone very wide of the Bill, but what he did was an abuse of all that is understood in this House when it is generally agreed, as it seemed to be in the House, that we should allow a very short debate.

The President of the Board of Trade gleefully said that it had been a very short debate. He knew perfectly well that, in view of its shortness, he could not have got the Closure. He took advantage of the fact that my hon. Friend the Member for Acton (Mr. Sparks), who was here with a speech ready, did not deliver that speech in order to give the right hon. Gentleman time to answer the debate. What did the right hon. Gentleman do? He took the opportunity to make a series of party points. In those circumstances, I think the House will be well advised to carry on this debate on another day, and in order that we may then have something to discuss—and the right hon. Gentleman, no doubt, will find someone else to reply—let me put to him one or two questions in regard to the matter, so that when we come to the second occasion for dealing with this matter, the Government spokesman will have something to which to reply.

Let him first of all give us some sort of analysis and some sort of break-down—a far greater breakdown than he has given us—of where the guarantees go to. Which are the countries for which we require the most guarantees? Which individual countries? And which country is the worst risk? That, after all, is a very important thing for us to know. What is the point of sending a trade mission somewhere or other if one out of every five of our debts there is a bad one? Why should we send a trade mission somewhere else if, in fact, every contract is met? I can understand that, possibly for political reasons, the President of the Board of Trade does not wish so to do.

Some of my hon. Friends have been described by the President of the Board of Trade as going wide of the subject when they dealt with the purposes for which this Measure was intended. But were they really? Is the right hon. Gentleman not going to give us any indication of how we need to cover some areas? Are we to have a global figure of the extension of our trade? Are we not to have any expansion, any figure?—[Interruption.] Hon. Members should not interrupt me. I am trying to conclude within a reasonable space of time in order to give several hon. Friends of mine an opportunity.

Several came here, like myself, prepared to speak in this debate, and because we did not do so, in order to get this important Measure through, what happened? We were immediately attacked by the right hon. Gentleman, who made a most unfair political attack, when he knew he could not reply to him, upon my right hon. Friend the Member for Huyton (Mr. H. Wilson). It is, after all, only a reasonable surmise that any journalist can make when he sees a Bill of this sort, of what hon. Members opposite, if they follow their usual principles, will talk about.

There have been extremely good forecasts in the Press about what I believe will be the future of various hon. Gentlemen. I see the Leader of the House sitting there. I do not know whether to refer to him as the Minister of Health or not, but one can easily see—it does not need a leak of information to know it—that sooner or later he will have to give up one or the other of those offices. Possibly—it does not need any leak of information to know this—he may have to give both up.

That type of attack is particularly unworthy when it is made on an occasion such as this. Here we had a debate which went straight ahead, in which everybody attempted to deal with the matter in a very short space of time—and then the President of the Board of Trade indulged in the sort of behaviour to which I have referred.

Let me come back for a moment to this question of what is going to be the division. How are the percentages divided? What is the percentage expansion which we expect to order to trade with Eastern Europe—the countries behind the Iron Curtain? Are we to earmark a certain amount of extra currency for the expansion of that trade? If that is so, we ought to know whether this policy is really in line with that of the Foreign Office. If we do not want expansion there, where is it that we do desire to have this expansion? In what particular area of the world are the Government seeking to secure the additional trade? For Western Europe, so far as we understand it, is in a position in which we are all competing one with another in the whole area in taking in one another's washing. If we suddenly increase our credits for exports to Western Europe, we shall find that the very next day the French Chamber will meet in order to make it easier for them to export to us.

My right hon. Friend the Member for Huyton said, I think very wisely, that it is not a question of money, but of what the money is to be spent on. If the President of the Board of Trade, instead of making such a facetious and lighthearted speech on such a serious subject, had given us some indication of both—if I might use a phrase which might have been used by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan)—the horizontal and vertical splitting of this sum, he would have helped us more. Looked at in that way, what are the principal products to which we want to advance money in order to promote exports? What are we doing, for example, in attempting to sell consumer goods? What are we trying to do about heavy industry?

How far is the machinery of export credits to be used, not merely as a lay organisation which just allows any individual businessman to come to it, and which looks at the propositions one by one, but on the basis of what we can do to encourage a particular sort of export? Let me give the right hon. Gentleman one practical example. In this country we make heavy engineering equipment better than any other country in the world.

Mr. de Freitas

Especially in Lincoln.

Mr. Bing

We have discussed this question before, and it is quite impossible to have a credit of the type about which the right hon. Gentleman is talking, a short-term credit, for a long and complicated transaction consisting of the supply of all the generating machinery we have to send out of this country. I dare say the right hon. Gentleman has learned, in his four or five months at the Board of Trade, that 52 per cent. of our exports are engineering goods, and when dealing with half our exports one would at least think that there would be some special provision to deal with engineering exports.

I do not know whether the right hon. Gentleman wants to stop this sort of discussion; whether he is trying to persuade his hon. Friend to move the closure so that we cannot discuss the trade of this country. If he wishes to do so, that is up to him, but I suggest to him, in view of his speech and of the light way in which he treated the subject, that he leaves the matter for the time being; that he has an opportunity to think things over so that we may have an opportunity of discussing these matters a little more fully.

I do not want to delay the House, but I should like to put to the right hon. Gentleman a question which I wanted to ask in the course of his speech. When I rose to ask it, he was guilty of a trick which I really did not expect from him. When I rose to interrupt, he said "Perhaps the hon. Gentleman will allow me just a moment to finish my sentence." After a while I rose again and he said, "I will give way in a moment if the hon. Gentleman will let me finish." Then my hon. and learned Friend the Member for Kettering (Mr. Mitchison), who also wanted to speak, rose to interrupt the right hon. Gentleman, who said the same thing to him.

That really is not the way to treat the House. The right hon. Gentleman should remember that the Government have only a minority of the votes of this country, and in those circumstances they ought to accord as much credit to the views expressed from this side of the House as to the views expressed from their own side. But the right hon. Gentleman thinks "This has been a very short debate and I can therefore be as rude as I like. I will take advantage of the good nature of the Opposition"—a most deplorable procedure!

Let me again put to the right hon. Gentleman the points that I have made to him, so that when we come to this matter again he will have had an opportunity of considering them and dealing with them.

It being Ten o'Clock, the debate stood adjourned.

Debate to be resumed Tomorrow.