TRADE FACILITIES BILL. (Hansard, 24 March 1925)

§ THE EARL OF CLARENDON

My Lords, in moving the Second Reading of this Bill, I think I need only observe that so far as the principle of the Bill is concerned, it was fully discussed on the introduction of the parent Act in 1921, and the principle is agreed. The guarantees that are made in this Bill are only effective after consultation with a special Committee appointed by the Treasury, which has the responsibility of considering all the guarantees that are brought before it. If a loan is guaranteed it is specified that all the articles purchased shall be of British manufacture, and any contravention of this agreement is reported to the Treasury. The effect of such guarantees as have been entered into is that work has been performed which otherwise would not have been carried out at all. It is difficult to estimate accurately the number of men who have been given employment, but in the opinion of the Committee it is not far short of the mark to say that something like 100,000 men have been given employment by means of the work which has been undertaken as the result of these guarantees. I think I need only say, in conclusion, that the account of those guarantees will be laid 627 before Parliament one year after the close of the present financial year. I beg to move.

§ LORD ARNOLD

My Lords, I do not think your Lordships would desire or expect that there should be any protracted discussion on this Bill. I will therefore try to emulate the noble Earl in his brevity. There are, however, one or two observations that I would like to make about it. There is no new feature in the Bill this year, and it is true that the Trade Facilities Acts have, I think, fulfilled the expectations which were originally formed of them. They have found a good deal of work, and have been of help in every way to industry. It is also true, and very satisfactory—I think I am right in saying—that the losses which have been incurred under these guarantees so far are quite small. I remember last year that the actual loss which had been incurred amounted to only £4,000. I believe that since then there have been one or two further losses, but probably I should be right in saying that the total does not amount to more than between £100,000 and £200,000. It is true that is not a small sum—I see my noble friend Lord Banbury listening intently—but at the same time I think he will agree that it is not a very large sum in proportion to the total transactions.

I must express regret that the reception which was given in another place to one or two points which were urged was not more favourable. There was a demand for a full inquiry into the working of the Acts, and we did not get very much encouragement for that. Then there was a very urgent demand pressed from more than one quarter of the House that in view of the large measure of assistance from the public credit which was given to various concerns there should be, for the taxpayers, some share in the assets. That, I am sorry to say was absolutely refused by the Government, though I venture to think the balance of argument really was strongly against the position the Government took up. Your Lordships might well be concerned with the effect which these Bills may have, or may be adjudged to have, upon the Government credit as a whole. 628 Personally, I think the effect must be very small. There is all the difference in the world between borrowing for productive and for unproductive purposes. Every guarantee under these Acts is for an enterprise which may be termed productive, and actual assets are created.

I feel that it could well be argued that thereby the wealth of the country is increased, and therefore that its credit is increased, because, in the last resort, credit really depends upon taxable capacity. I think it may be argued that these various enterprises have increased the taxable capacity of the country, and, therefore, rather than diminishing credit, they have actually added to it. But there is the further point—which again I must state carefully, because I notice that my noble friend Lord Banbury is listening—that statistically these guarantees, quite apart from the fact that there are assets behind them, in proportion to our total national indebtedness cannot be accounted as of much consequence; as a matter of fact, they amount to somewhere about 1 per cent. of our total National Debt. I therefore feel that their effect on the credit of the country cannot be appreciable. I will not say anything more, because there is other business on the Paper, and this is a Money Bill which I am sure does not require long discussion.