HL Deb 25 March 1926 vol 63 cc827-34

Order of the Day for the Third Reading read.


My Lords, I beg to move the Third Reading of this Bill.

Moved, That the Bill be now read 3a. —(The Earl of Plymouth.)


My Lords, I was not able to be present when the Second Reading of this Bill was taken, and there are one or two suggestions that I want to make in regard to it before it finally leaves this House. I share the attitude of suspicion which many of your Lordships hold in regard to a good many of these post-War measures, but, as regards this particular proposal, I do think it has been useful in finding employment for people who might otherwise have been unemployed. I understand that the finance under the Acts has been on the whole satisfactory, and that no loss has been incurred; and in those circumstances I support the particular proposal to increase from£70,000,000 to£75,000,000 the amount that may be advanced or guaranteed under this measure. But modern trade is a very complicated matter, and the effect of some of these advances is, I think, causing a good deal of dissatisfaction in trading circles. An advance recently made to a shipping line—a shipping line that I understand is practically foreignowned—whilst it may provide business in shipbuilding circles, is felt by shipping lines in this country to be a means of introducing for foreign benefit unfair competition with a greatly depressed trade in this country. I understand that these advances are sanctioned by an Advisory Committee, acting under certain instructions from the Government. I suggest that those instructions might be looked into in order that it should be seen that advances are not made to firms who are liable to compete in an unfair way with depressed industries in this country.

The second question I want to raise is one which has been much debated in both Houses of Parliament, the question of Russia. I do not know whether, if anything is done for Russia, that should come under trade facilities or export credits, but at any rate, as the matter has been debated on this Bill, I take it that I shall be in order in alluding to it. I understand, of course, fully the difficulty of doing anything for Russia. Russia's old debts have been repudiated by its present Government, the property of British subjects has been confiscated and no compensation has been paid. But, again, the complications of modern trade and finance are such that a good many of our traders feel at present that an unfairness is being done. We have guaranteed, or shared in guaranteeing and finding£40,000,000 for Germany. Germany is guaranteeing a loan of£15,000,000 to finance exports from Germany to Russia. It would perhaps be unfair to say that the£15,000,000 is taken out of the£40,000,000 advanced to Germany, but that is the way in which traders talk of it.

In regard to the German advance or guarantee for export trade to Russia, I understand they guarantee as much as 60 per cent. on the amount of the business done, and that the individual trader runs the risk of only 40 per cent. I suggest to the Government—and perhaps the noble Earl will be good enough to bring the matter to the notice of the Board of Trade—that they might consider whether, for the sake of our traders (and it is only of them that I am thinking), who are badly in need of more orders, and who are willing to take a certain risk in doing trade with Russia, it would not be possible for an insurance scheme to be drawn up under which a quite small proportion of export trade to Russia could be insured or guaranteed. I would suggest only something like 25 or 30 per cent. altogether. I believe it would very much facilitate the export trade to Russia, and might be of great advantage to the traders in this country. I admit I have not gone into this matter very carefully, but I did not know the Bill was coming on until I happened to see it on the Paper for to-day. I think the matter is worthy of consideration. I put it forward simply as a business proposal. I suggest that a reasonable commission should be charged for these facilities. That reasonable commission, if assessed on the whole of the order, might be at a comparatively low rate, but it would come to a very considerable proportion of the percentage that I suggest should be guaranteed by the Government.


My Lords, I should like to support what the noble Lord has said. I ventured two days ago to urge upon the Government in regard to the export credits scheme the extreme advisability of extending the operation of that scheme to trade with Russia. In so doing I pointed out that certain other countries are getting a considerable amount of valuable trade with Russia, which we are neglecting, and if confirmation of that is required it was to be found the very next morning in the Manchester Guardian, which had some interesting particulars of what Germany is doing. The Manchester Guardian stressed the point I put forward—namely, that Germany was doing this not merely with the immediate object of getting trade, but with the idea of "getting in" with certain Bussian orders, and, once having secured those connections, they would continue. The reply of the Government was, broadly: "Do you seriously suppose that we as a Government should do anything ourselves to help trade with Russia, because Russia has not paid her debts?" There is a very great deal that could be said in regard to that, but, at any rate, it is worth while pointing out that if the members of the present Government had not opposed the Treaty with Russia of the Labour Government a considerable proportion of those debts, under a provision in that Treaty, would have bean paid—a bigger proportion, I think, than is at all likely to be paid either by Italy or by France. Therefore it is quite clear that in certain circumstances the present Russian Government was prepared to entertain certain proposals in that regard.

The noble Viscount, Lord Peel, who spoke on that occasion, said across the floor of the House: If this trade with Russia is so good, why do not the cooperative societies do it? As a matter of fact, the Co-operative Wholesale Society is doing trade with Russia, both ways, and, according to my information, it is a very satisfactory trade. I believe they have not lost a penny piece by it. I understand, indeed, that in one instance a cargo for which the liability was at least doubtful was paid for, and they find everything to be quite satisfactory financially. Therefore the noble Viscount was not quite correct in suggesting that no trade of that kind is done. It is perfectly true, looking at his exact words, that he just became a little confused at that moment. We were talking about trade, and he began by saying "Why do not they trade," and then went on "and why do not they invest their money?" That was not the point. The point was whether the co-operative societies traded, and I have shown that the Co-operative Wholesale Society is trading.

I do not think I need detain your Lordships further upon this matter. The noble Lord who spoke last has, of course, very great knowledge of trade matters, and I know that the Government and your Lordships' House always pay great attention to any suggestions which come from him. If I may say so, I think they ought to do so because he has such a very intimate knowledge of this question. But I really would ask, if I may, that the Government should seriously consider this question: Are we to understand that the position of the Government is that unless and until Russia begins paying some proportion of her debts, which were contracted by a totally different Government under totally different circumstances and which, as I have shown, in certain circumstances they are prepared to entertain and to begin paying—are we to understand that the position of the Government is that until this is done they will do nothing whatever to assist trade with Russia? I think that is an impossible position to maintain and I believe they will be obliged to give it up as the years go on. Moreover, I suggest that it is really an untenable position because, whereas the noble Earl said that the Government would not do anything of this kind, in a sense he went out of his way to try to encourage other people to do this trade. Really, if it is a moral case, how can be do that? With those few words I will end what I have to say, but I trust that the very strong appeal made to the Government from different business quarters will receive some consideration.


My Lords, the noble Lord, Lord Emmott, only informed me a short time ago that he would raise this question on the Third Reading of this Bill and I am afraid, therefore, I am not in a position to answer him very fully. Naturally, anything that he may say on the matter under discussion, on which he speaks with very great authority, is bound to command great attention. The question of the guarantees to this shipping line was discussed somewhat fully in your Lordships' House—I think at the end of last year.


This year.


Then it was earlier in the present Session. The point that I would like to stress is that I feel certain that the independent Committee which considers these questions and on whose recommendation the Government acts, considers very fully the point at issue—namely, as to whether or not the guarantee, given in this case to a company whose share capital is largely owned abroad, will affect our own shipping companies deleteriously I would like to say also that the shipbuilding industry as well as the shipping industry has to be taken into consideration with regard to these matters. We all know that the shipbuilding industry is suffering from an acute state of unemployment. There are, I believe, something like 37 per cent. of unemployed men in that industry. There is no doubt that in the case to which the noble Lord refers the order would not have been given in this country unless the guarantee had been given at the same time. In addition to that, I am led to understand that the six ships which were built in this country as the result of that guarantee will go, not to replace any British ships but to replace, I think, Japanese ships, and it is not considered that our own shipping will be deleteriously affected as a result.

I now turn to the second question raised by the noble Lord—namely, export credits to Russia. I regret that my noble friend Lord Peel, who dealt somewhat fully with that matter on the Second Reading of this Bill, is not present to deal with it this afternoon. All I can say is that the attitude of the Government, broadly, is that the post-Revolution situation in Russia has made it almost impossible to distinguish between the Russian Government and individual trading companies in that country, and they are not disposed at the present moment to give any financial assistance or help whatsoever to a Government that has so very blatantly refused to fulfil its obligations in any shape or form. I am afraid I cannot add anything more on the point at the moment. The noble Lord, Lord Arnold, spoke at some length on this matter also on Second Reading, and my noble friend Lord Peel replied to him; but I may say that, broadly speaking, the attitude of the Government on the question is as I have stated it.


My Lords, I should like to say a word about the shipping point which I raised earlier in the Session and to which, I recollect, the noble Lord replied that the defence of what was done was a question of employment. I have no doubt that is a matter of great difficulty and one for which we have to make great sacrifices. But the point raised was that in that particular case the subsidy was to be utilised in the construction of ships which would be directly in competition with shipping lines owned by British owners, and that the present conditions were such that there was no substantial freightage even for the ships already employed in a particular line. I will not go back to it again, but I raised the point myself and mentioned what the particular line was; but no answer was ever given to the allegation in regard to the Trade Facilities Act that it was not right to give guarantees to foreign companies for tile construction of ships which, when constructed, would be in competition with our own mercantile marine in a very important particular. I do not in the least underrate the point as to unemployment, but I think it is the greatest possible mistake to use our money to depreciate our own mercantile interests.

It was also stated at that time, I think by the noble Lord, Lord Southborough, that it was not right that matters of this kind should be left to the control of the Advisory Committee, and that the main purpose of the Advisory Committee was not to consider the larger aspect of the question of these guarantees or subsidies, but merely whether a particular guarantee or subsidy was sound from the financial point of view, so that there was no probability that a particular loan or guarantee should cause any loss to the national Exchequer. One realises, of course, that that is important; but it was not the question raised, nor is it the question which has raised difficulty in reference to shipping matters.

I am sorry that I was not aware that this discussion would be raised this afternoon, but may I give another illustration? There is a shipping interest, the name of which I would rather not disclose, but I will give it to the noble Earl afterwards if he desires it, to which I believe two guarantees were given, each of them amounting to over£2,000,000. The object for which those guarantees were given was the construction of ships to facilitate the import into this country of meat from our Dominions; I need not go further than that. If there is a difficult industry in this country, and one against which facilities of this kind ought not to be given, it is the agricultural industry. We are constantly hearing from the noble Lord, Lord Bledisloe, how difficult that industry is. It is not a protected industry, and I am against all forms of protection. It is a very different thing when you have two instances in which, as I am told, a sum of something like£5,000,000 was given in the shape of a guarantee or a subsidy in order that competition with our own agricultural industry should be furthered and made more effective, particularly when we are told that arable land can no longer be properly cultivated in this country and that our chances lie in the direction of cattle, sheep and pasture land.

In regard to Russia, I understand that what the noble Earl says is that, having regard to the conditions in Russia, we ought not to have anything to do with that country at all. Why that argument should be used to deprive the workers of this country of the employment which is waiting for them I cannot understand. If you want to assist employment in this country open as far as you can the Russian market. They want our commodities, and we want things that we can get from Russia, such as food. They can supply us with those things cheaper than we can get them from other sources. It is a pure matter of prejudice and not in the interests of the trade and industry of this country that we are closing, so far as Governmental action can do it, the most advantageous market that could be open to us for increasing employment in this country.

It is a most serious matter that while we are standing in the way of the development of important trade of this kind, advantage is being taken of the openings in Russia by other Powers—I say nothing against them—who are competitors of ours in industry. I saw the other day statistics showing the trade between Austria and Russia. That trade has grown between 400 and 500 percent. I do not want to bind myself down to the precise figures, but the trade between these two countries had grown enormously during the last year. Every one knows that in Russia the conditions are becoming much more stabilised and much more prosperous so far as the ordinary trade outlook is concerned. It seems to me that we ought to look upon this matter quite apart from what I may call the governing conditions in Russia. Those are internal matters that Russia must decide for itself. The attitude that is now taken up of, on the one hand, finding what I may call fictitious employment for people in this country and, on the other hand, refusing to open up markets or refusing to give facilities for natural markets, which will not only be important for the moment but also for a, long industrial future in this country, appears to me to be extremely short-sighted.

I am not going into the question of the relationship with Russia that the late Government sought to bring about. It fell to my lot to explain that to this House in what, I am afraid, was rather a prolonged speech. The object was to ensure payment of, I think, as much as 60 per cent. of the very debts to which the noble Earl has referred, or at any rate a large, proportion of them. It is known that at the last General Election the Labour Party was attacked because the Labour Government had intended to re-open the industrial position as between this country and Russia. Well, that will have, to be done. Speaking for myself, and also on behalf of the Party I represent, I desire to say that if you want to do injury to employment in this country you cannot do it more than by trying to keep our products out of the Russian market.

On Question, Bill read 3a, and passed.