HC Deb 26 April 1976 vol 910 cc10-1
8. Mr. Blaker

asked the Secretary of State for Trade what is the value of contracts placed by the Union of Soviet Socialist Republics at the latest convenient date under the £950 million line of credit arranged by the then Prime Minister in February 1975.

Mr. Dell

The total value of contracts placed under the agreement to date is approximately £25 million and further substantial contracts are under discussion between United Kingdom exporters and Russian buyers.

Mr. Blaker

If the line of credit is taken up fully, will it not cost the British taxpayer more than £300 million in interest rate subsidy alone? As much of it is intended to strengthen the Russians' capital base and enable the Soviet Union to compete more effectively in our own markets, are the Government considering whether it makes sense for the Western countries to fall over one another to subsidise the Soviet Union? Should not the Government be pressing our Western partners to examine together our attitudes towards credit for the Soviet Union?

Mr. Dell

The Government consider the interests of this country by extending lines of credit. I have seen the hon. Gentleman's estimate of the cost to the taxpayer of this line of credit. It is impossible to make such estimates without having the details of particular contracts. We are in competition with other countries that operate similarly in their trade with the Soviet Union and if we are to get orders it is necessary to operate on this basis.

Mr. Higgins

In general will the Secretary of State say what the interest repayments are for the credits extended to the Russians? Secondly, do the figures for exports to Russia appear in the balance of payments figures at the time when the exports are made, or when the payment is received?

Mr. Dell

It is not customary to publish rates of interest ; they remain confidential. Exports naturally appear in the balance-of-trade figures when they are made ; the balance of payments figures are statements of actual payments.

Mr. Skinner

Can my right hon. Friend tell me which party was in power at the time when we, along with the rest of the Common Market countries, subsidised the sale of that cheap butter to Russia?

Mr. Dell

I think that my hon. Friend knows which party was in power.

Mr. Viggers

If the terms of credit are so favourable, why was Russia chosen in the first place?

Mr. Dell

It has been customary for a number of our major industrial competitors to operate with the Soviet Union within this type of framework. We are merely trying to make our exports competitive.