HC Deb 30 November 1953 vol 521 cc915-24

Motion made, and Question proposed, "That this House do now adjourn."—[Sir Cedric Drewe.]

10.59 p.m.

Mr. Harold Davies (Leek)

I wish to raise the question of East-West trade and to draw the attention of the House to a vital matter affecting the economy of the British people. As one who went to the Moscow Economic Conference in April, 1952, I wish to call attention to the trade proposals made at that conference. It is now possible to compare two 15-monthly periods; that is, the period up to the middle of 1952, and the period from then until 30th September last. The effects of the further contracts signed at Peking this summer under the 1953 business arrangements are, apparently, not included in the figures given in the September returns, but from 1st April, 1951, to June, 1952, United Kingdom exports to China were of the value of £2,049,504, while United Kingdom imports were worth £6,745,588.

Since then, there has been this conference, and we find United Kingdom imports and exports are beginning more nearly to balance. Between 1st July, 1952 and 30th September, 1953, United Kingdom exports totalled about £8,600,000, while imports were of the order of £8,200,000; so that, in the period since that conference, our exports to China have been about four times greater than in the preceding period that is comparable.

That is my first point. Now, at last, thanks to the wisdom of the Board of Trade, if one may put it that way, we have lifted the ban on the export of small motor-cars to China: and those hon. Members who represent Midlands constituencies hail this as a triumph for common sense. Then, as a result of the lifting of this ban, there came two days later the shipment to China of £700,000 worth of air compressors, and now the Austin Company can send about £2 millions worth of cars and buses. But, our friends in the United States seem to have been trying to tighten the ban on East-West trade, although the French newspaper "Le Monde" had as a heading on 14th November last, "The China Market May be Re-opened to the American Car Industry," and then reported: The export director of the Chrysler works announced last night that Communist China might soon be buying cars and lorries of American manufacture. The present restrictions still prevent this trade, he said, but the Bermuda Conference 'could bring about a solution' to this problem. That is important. Is our Prime Minister envisaging, at the forthcoming conference, for which he leaves tomorrow night, that there will be talks on this problem of East-West trade? Is the right hon. Gentleman aware that the Americans may be likely to bring forward this question?

It seems that all the people in N.A.T.O., and all our Allies in the West have reached a period where, if one is a friend of Russia one is a "satellite," while if a friend of the United States, one is an "ally." I have said it before, and I repeat it this evening, that this is an unfortunate use of words and that words are now using men and not men using words. There is not the slightest doubt that the country which has honoured restrictions on East-West trade more than Japan, more than Germany, and, indirectly, more than the United States, is Great Britain.

There is a cloud on the horizon. There may be a slight recession in the United States, equal to 5 per cent. By an economic multiplication, which I do not understand, the experts say that that recession can influence the sterling area to the extent of 33⅓ per cent. Put simply, one can say that if the United States meets a depression, then Western Europe is bound to feel the repercussions. Nevertheless, we find Great Britain at this juncture retaining its restrictions on East-West trade. We seem to be living in a fool's paradise.

It may be worth while realising on the factual side that, as recently as 1951, 30 to 40 per cent. of our total supplies of coarse grain—barley and oats—came from countries of the Eastern group, namely, the Soviet Union, Roumania and China. We must remember that for nearly one-third of our daily bread we depended on grains from these countries. Another factor which should be borne in mind is that in 1950 30 per cent. of our softwood came from Russia and Eastern European countries. Through the wise policy of the Labour Government, we stored this timber and much of it has been used in the Conservative building programme, of which the Conservatives are very proud.

Another fact, which I managed to drag out of the President of the Board of Trade in a supplementary question last week, is that we are buying manganese from Russia. We are getting one of the most important strategic materials in the world from the U.S.S.R. I also tried at the same time to find out the value of licences we have refused over the last 12 months. There is not time to give them now, but I have most of them here. I believe it would be no exaggeration if I said that in the last 12 months this little country, which uses the slogan coined by the Chancellor of the Exchequer, "Trade not Aid," has refused nearly £60 million of trade with Eastern Europe and China. One item was a £2 million order for antibiotics, which I should have thought on humane and for Christian reasons we could have accepted. What are we doing by refusing that order? We now find that Czechoslovakia is producing its own antibiotics. The Chinese have told me that if we refuse to supply these things they will have to build their own factories to produce them. Thus we are losing the possibility of a potential market capable of almost unlimited expansion.

It is no good anyone telling me that in 1938 we had only x pounds worth of exports to China and Eastern Europe. The world is not static. There is a dynamism, movement, and life, and who is going to tell me that those exports are not going to be cubed in 1953 where there is a correct approach? While we are losing these exports Germany, Holland, France, and Denmark are penetrating these markets. While an American Senator can ask if Robin Hood is a Communist, anything can happen.

There is a committee in Paris known as the Consultative Group Co-operation Committee. The American Senator described this committee as cosmic and ultra-secret. A thing is secret or not secret; but ultra-secret? Only the Lord above knows what ultra-secret and ultra-cosmic is. The result is that hon. Members on both sides of this House—and I have the Battle Act Report of 1952—are in complete ignorance of the commodities on the secret list, and the secondary list, so far as this committee is concerned.

Because of the shortness of time, and the value of the Minister's reply, I want to take up only a few more minutes. I want to know whether this Paris committee, which is set up under N.A.T.O., and on which Western Germany and Japan are represented, has supranational powers. It apparently is able to tell the British Parliament and the British Board of Trade what they shall and shall not sell. The point is that the documents and orders of keen British businessmen with a ball-bearing factory, or of men who have spent generations learning the skill and craft of engineering, are put before this committee. Apparently British orders have been turned down, and the German and Japanese representatives on the committee can see the information as far as contracts are concerned. I am informed of British orders being turned down and a few months later a German firm coming in with exactly the same order, and the Consultative Group Co-operation Committee has agreed that the Germans should sell.

Western Europe is beginning to revolt against restrictions on legitimate and reasonable trade with Eastern Europe and with the Far East. In the past, the countries of the Eastern bloc have never accounted for a big proportion of our trade, but commercial prospects have been opened up by the industrialisation of these countries. The flow of inquiries and orders being received from the Eastern bloc countries shows that they are willing to start buying. Are we to refuse, and so let in our competitors?

The slogan of the Government was, "Set the people free." I ask the President of the Board of Trade to set British businessmen free to search for orders in Eastern Europe and China, within reasonable and legitimate limits. There is evidence now of those countries' ability to pay in terms of exports. There is, for example, manganese. The Chinese can pay in dollars, because there is a balance of £81 million worth of dollars in so far as American trade with China is concerned. This trade could be an important contribution to our export trade. I am not claiming that East-West trade is a panacea for all economic problems, but I do claim that it is of great importance to the health and well-being of the British economy. I ask the President of the Board of Trade to see that at the Bermuda Conference the Prime Minister brings up this problem. There has been too much control of the British Board of Trade by the commercial department of the Foreign Office in Britain, and that is unhealthy for the economic life of the British people.

11.15 p.m.

Mr. Stephen Swingler (Newcastle-under-Lyme)

I rise to support my hon. Friend the Member for Leek (Mr. Harold Davies). I am quite sure that this subject of East-West trade is one that in the near future will fill the benches of this House. It is a subject of very great importance to this country, and I want to know whether the Minister who is to reply to this debate is the Minister for the promotion of exports or the Minister for the prevention of exports from this country to the Eastern parts of the world.

We want to know whether the Minister is concerned with the political implications of the subject. As I understand it, his job is to promote exports from this country, irrespective of the political character of the Governments in the various parts of the world to which they go. If we can get from these parts of the world grain, timber, rice and soy a beans for the benefit, not only of this country, but of the Commonwealth as a whole, it is surely part of the Minister's job to promote the export trade of this country.

I wish to put a number of questions to the right hon. Gentleman. We know that, because of the political and military developments that have taken place in various parts of the world, the trade between the Western part of the world and the Eastern part of the world, which is under Communist rule, is restricted. It is restricted, not from a political point of view, but on the basis of resolutions passed by the United Nations in view of the war in Korea.

For a number of weeks past we on this side of the House have been endeavouring to find out how these controls over East-West trade have been operating under the resolutions passed by the United Nations since the war in Korea began. Can the Minister say why, for example, it is possible at the moment for the Soviet Union to place orders for the building of dredgers with shipbuilding yards in Holland, but not with British yards? During the present year, both the Soviet Union and Holland have tried to place orders for the building of dredgers with British shipbuilding yards. Having been refused permission to do so by the Board of Trade, they have managed to place their orders straight away with yards in Holland, even though that country is a member of the so-called Consultative Group to which my hon. Friend referred.

How is it that firms in the City of London are at the present moment referring orders from China for gas and water pipes to firms in West Germany owing to the fact that they are not allowed to place them with firms in this country? It is a fantastic state of affairs that at the moment the Board of Trade should be refusing export licences to British firms wishing to send gas pipes to China, but that those firms can get those orders placed in Western Germany for early delivery.

It would seem from a letter which I have received from the Minister who is to reply to this debate that the Board of Trade are more concerned with making more stringent the controls upon East-West trade than with promoting such trade. They are, in fact, more concerned with restricting the amount of trade between this country and Poland, the Soviet Union and China than with expanding that trade, whereas Western Germany, Japan and France have considerably expanded their trade with the Eastern part of the world in the past 12 months. In particular, since the signing of the Armistice in Korea, this country has suffered considerably from the restrictions being imposed by the Board of Trade and, as a result, orders have been diverted to these other parts of the world.

Therefore, I ask the Minister: What is the policy of the Board of Trade? Are they really interested in trying to promote more trade with the East, or are they concerned with the prevention of that trade? If they are concerned with promoting more trade with the East, why will they not relax the controls to the extent that other Western European countries are doing and thereby allow British manufacturers to get the export licences which are now being granted, for example, in Germany and Japan?

11.21 p.m.

The Minister of State, Board of Trade (Mr. Heathcoat Amory)

The hon. Member for Leek (Mr. Harold Davies) has raised rather a big subject, and in the short time that is left to me I shall try to deal with the particular points that have been raised.

The Government believe that an increase in our trade in non-strategic goods, both with the Soviet bloc and with China, should be possible, and we hope that that is what will happen. As to the extent which we can hope for, we must keep that aspect in consideration. The hon. Member mentioned a very large figure of what, he thought, were the orders that had been refused. I cannot possibly say what those orders amount to, because, to begin with, only very vague figures have been given in the case of a good many orders, and we have no means whatever of estimating the value of firm orders. We agree that our trade with the Soviet bloc is more important than the present 2 per cent. of our total export trade represents.

The hon. Member asked whether consultations were taking place with the American Government and other countries about the strategic embargoes. That kind of consultation is going on the whole time. As regards United Kingdom imports from the Soviet bloc, the hon. Member rather suggested that the Russians found it fairly easy to earn sterling, but I think the position at present is that the Russians are finding it quite difficult to sell their products here. That applies also to other Eastern European countries.

Imports of Russian grain have fallen a good deal lately. Nevertheless, we hope that Russia will succeed in earning more sterling by the sale to us of timber, grain, manganese ores, which the hon. Member mentioned, and precious metals. It would be wrong, I think, to hold out any great hopes of enormous increases in the volume of trade with China, but here again we hope that there will be a steady increase. Apparently, we are importing at the moment almost all that we require from China. We have a fairly liberal import policy, but in some cases it has been found that the Chinese prices are well above world prices. I should have thought that if we succeeded in selling a great deal more to them, in spite of the fact that China at present has a favourable balance of trade through Hong Kong, they might find it quite difficult to pay for our goods.

As far as exports to the Soviet bloc are concerned, we are already exporting many of the items to which the hon. Member referred. There are no controls at present on quite a wide range of engineering products, normal types of cable, tractors, wool and consumer goods. Again, we have frequently made it clear that we would like to see that kind of trade steadily growing. We hope that further orders will be placed with us.

There are controls over, for instance, ships, presses and electrical machinery, but even here they are not necessarily entire prohibitions but partial ones. Just recently we have found it possible to give permits for some trawlers and some fish factory ships, and there are some other types of ships which are at present under consideration.

Mr. Swingler

Why not dredgers?

Mr. Amory

I think that dredgers are among the other types of ships under consideration.

As far as China goes, I should like to make it clear that goods which are under embargo are also under embargo by other members of the Consultative Group, and, therefore, our exporters really should not be under any disadvantage at present. We have no concrete evidence that agreements that have been arrived at by that Consultative Group and are adopted by the various Governments are not being adhered to. It may be some deliveries are still being made against contracts that were previously entered into by the countries concerned, but there is no substantial difference in the items on the lists of any of the countries.

Mr. Swingler

The right hon. Gentleman says there is no substantial difference between the various Governments. Is he aware that in August of this year, after the Korean armistice, some countries in Western Europe re-validated licences which they granted for iron and steel products before August of this year, and the so-called agreements that have been made recently not to issue any new licences for the export of certain commodities to China make no difference to the fact that they were re-validated licences granted previously?

Mr. Amory

My time is short, and I should like to say this in answer to the hon. Gentleman. If he has any evidence of that type of thing, I should be delighted if he would let me have it, but we have no definite evidence that these agreements are not being adhered to.

I want to make two other points if I may. First of all as to drugs, such as the antibiotics, anti-malarials and sulphonamides, which have been the subject of references in this House, I am glad to be able to say that we have decided in consultation with the other members of the Consultative Group not to continue controls beyond the end of the present year.

Mr. Harold Davies

It is too late.

Mr. Swingler

We have lost the orders.

Mr. Amory

I do not think so. The hon. Gentleman is too depressing over that.

Another question I was asked was if the Consultative Group, as it were, were a supra-national authority. No, it is not. It is a purely advisory body and, after reaching agreement among themselves, they make recommendationsand it is up to the Governments concerned to decide whether those recommendations shall be accepted or not.

Mr. Davies

But British businessmen's secrets are in their hands.

Mr. Amory

I have only one minute left, and I should like to explain that in all these matters our first consideration is our own security and the security of the other nations working with us to preserve the peace of the world. Subject to that overriding consideration, we really want to see trade expand both with the nations of Eastern Europe and with China, and we hope that with good will on both sides that can happen.

The Question having been proposed after Ten o'Clock, and the debate having continued for half an hour. Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twenty-nine Minutes past Eleven o'Clock.