HC Deb 10 January 1977 vol 923 cc1032-3
9. Mr. Blaker

asked the Secretary of State for Trade how much of the credit of £950 million for the Union of Soviet Socialist Republics has now been taken up.

Mr. Meacher

The total value of contracts placed to date under the agreement is approximately £54 million. Other deals now in negotiation will add substantially to this figure when the related commercial and financial agreements are signed.

Mr. Blaker

Does the Secretary of State for Trade agree with the recent statement by the Foreign Secretary that a danger is involved in the transfer of resources from the West to the Soviet Union in that it may enable the Soviet Union to fulfil its objectives in the Third World and produce goods to be sold back to the West at dumped prices?

Mr. Meacher

We will take effective measures where the evidence is given to us by industry that there is dumping by a State-trading country such as the Soviet Union. In relation to the transfer of resources, there is a COCOM embargo which has been in operation for a long time. We strictly adhere to it. But as regards items in which there is no security or technological content, it is wholly in the interests of a Western country such as this one to get the advantages of trade with the Soviet Union, and we intend to use the rest of the credit under this agreement if we can.

Mr. Costain

Does not the hon. Gentleman appreciate that by giving the Soviet Union credit at lower interest rates than those which can be obtained by British industry for its own development we are giving it an unnecessary advantage? Does not this operate against the employment situation in this country?

Mr. Meacher

This question has been raised in each of the last three Question Times of the Department of Trade, and I give the Opposition credit for their perseverance though not for their ideologtcal myopia. Their attitude on the issue is not held by British industry. We did not originate the terms of this agreement. We were following the competition which had already been set by France, Italy and Japan. If British industry is to have a competitive edge in the Soviet Union, we have no alternative but to follow our competition down that road, although no further.

Mr. Nott

No ideological question is involved. What is the purpose of financing Russian industry—which is, in effect, what this means—by giving it credit at about 7 per cent. interest through money which costs the Government nearly 15 per cent. to borrow? That money is then used to manufacture textile goods which come back to this country and destroy jobs in the North-West and throughout the North of England. No ideological question is involved. This is purely a practical matter.

Mr. Meacher

If our exporters are to gain a proper share in major contracts, there is no alternative but to supply competitive credit and interest rates in line with what the Soviet Union has been offered. We took great care to find out just what the Soviet Union was being offered. The figures are confidential, but I assure the House that we have in no sense improved on them and have no intention of doing so. The effect of following the Opposition's suggestions would be to lose the trade in these important contracts to other countries, and the Russians would still have their machinery with which they would be able to export to our markets.