OVERSEAS TRADE BILL. (Hansard, 21 February 1929)

§ THE EARL OF LUCAN
My Lords, I have to move the Second Reading of this Bill, the object of which is to extend for two years the period in which guarantees may be given under the export credit guarantees scheme to September, 1931, and the period during which the guarantees already given may remain in force up to September, 1936. This is in accordance with a statement which the Prime Minister made in another place last summer in the course of a debate on un- 1024 employment. It is no new subject to your Lordships. It has been thoroughly debated in connection with the Trade Facilities Acts, and on other occasions within the last few years, and I do not think I need explain to your Lordships the genesis of the scheme. The principle has received favourable consideration from your Lordships, and the present Bill was also favourably received in another place and passed without a Division.
The facilities now offered by the Department are based on the recommendations of the Credit Insurance Committee. They enable exporters to ensure the payment at maturity of a proportion, not exceeding 75 per cent., of bills of exchange drawn by them upon approved importers overseas in respect of goods wholly or partially manufactured in this country. That is practically an insurance business. It is carried out under what is known as Contract A, and it insures the exporter against bad debts. There is a new contract, Contract B, which now extends the cover provided by Contract A to any bank discounting the bills and thus enables the exporter to discount at favourable rates. The contract was prepared in close consultation with the banks who have given the utmost assistance, not only in bringing it to the notice of their customers, but in closely co-operating with the Department. I do not think there is anything further of interest that I can tell your Lordships now, but if any member of your Lordships' House wishes for more information I shall be very glad to furnish it. I beg to move that the Bill be now read a second time.

§ LORD ARNOLD
My Lords, on this side of the House we shall certainly not oppose this Bill; we shall support it. Indeed, it is a novel and somewhat refreshing experience to find this Government doing something to help our export trade. I noticed that in a speech two days ago, Lord Hugh Cecil said that of all the failures of the present Government that which was most disastrously and lamentably disappointing was its failure to economise. I am not sure that that was its worst failure because there are so many. But one of the very worst undoubtedly has been the 1025 cumulative effect of their policy upon the export trade of the country. Only the other day it happened that I was reading a letter from the chairman of a very big concern, complaining bitterly of the harm which had been done by the policy of this Government as regards the export trade. In fact, how little importance the Government really attach to the export trade was seen not very long ago when they proposed to abolish the Overseas Trade Department altogether. That was a ridiculous decision, made in response to Press clamour, and it had soon to be reversed. Even so, the Overseas Trade Department is handicapped.
This Bill does not go far enough. Let us take the overseas trade in relation to the provisions of the Bill. The Bill, or at any rate the administration of the Bill, the way in which the Government are to administer it, means that a very big market, a very important actual and still more important potential market is not receiving, so far as the Government are concerned, the help it should receive for our trade; I refer, of course, to Russia. The Government will not extend export credits to Russia. They will not even allow an application for export credits for Russia to come before the Advisory Committee. Not only so, but not very long ago they broke off relations with Russia, which, of course, has been a very damaging thing so far as our trade is concerned, and has meant a free gift of trade to Germany and the United States of which those two countries have not been slow to take advantage. In particular I would make this point because it comes closely to the provisions of this Bill.
Germany is liberal in its export credits for Russia. Your Lordships may remember that in one of the last speeches which the late Lord Emmott, who was a very experienced business man, made in this House on this very point, he urged the Government to extend export credits to Russia and pointed out the great help which German traders received from their Government for trade with Russia. Your Lordships will remember that Lord Emmott was not a man who was particularly friendly to Russia. I heard him make very adverse speeches regarding that country and its government; but he was a business man. He was chairman of a very big company, 1026 which was suffering severely in its export trade. He wanted something done, but the Government would not do it.
The noble Earl said that if there were any questions asked he would be pleased to reply to them and what I would like to know is this. Assuming for the sake of argument what I should think is extremely doubtful, that this Government are in office in a few months time, is their policy to continue to be one of embargo with regard to export credits to Russia? That is the question I should like to ask. Is this embargo going to be removed? What conditions do they require to be established before they will remove what I call the embargo? That is to say, what conditions would they wish to be established before these exports credits can be extended to Russia? Many of their followers have now come to see that efforts should be made for further trade with Russia. It is not very long since the Parliamentary Secretary of the Chancellor of the Exchequer was pleading for some better arrangement on this important matter, and we all know at present that there are other negotiations afoot with a view to bringing about a better state of things.
In moving the Second Reading of this Bill the noble Earl said that it would be within the recollection of the House that the Prime Minister referred to this matter in relation to unemployment. I have no doubt that the Prime Minister did refer to it. We have now nearly one-and-a-half million of unemployed. I should have thought that one of the most disastrous failures of this Government was their failure to deal with unemployment. Here is an opportunity of doing something—not very much, but something to help those 1,500,000 unemployed, something to alleviate this great tragic national problem. What I want to know is, what are the Government's future intentions regarding this matter? Are they going to continue permanently so far as they are concerned, and if not, for what length of time do they intend to continue, this withholding of export credit facilities to Russia? If this matter were settled it might lead, I think it almost certainly would lead, to some very valuable trade for our manufacturers, and particularly for some of those industries which at the present time are suffering most. It is in the interest of 1027 those people that I venture to make these few remarks, and to put forward this plea. If the Government can give us any more satisfactory reply on this matter than has hitherto been given either here or in another place, I for one shall be very glad.

EARL RUSSELL
My Lords, it is possible to have a very great dislike for the system of government that exists in Russia—I have personally a dislike for it as great as I have for some of the systems of government in other European countries—but that ought not to affect our judgment when we are dealing with trade in this country. One's political prejudices need not get in the way of one's trade. I would remind your Lordships that the weekly newspaper Punch, which is not, I think, particularly a supporter of those who sit on this side of the House, had a cartoon the other day, which your Lordships may have seen, in which John Bull is shaking hands with the Soviet emissary and is saying: "Now let us talk business." Why do the Government deliberately put a spoke in the wheel of this attempt to talk business? Why do they not allow this credit to be used in such cases in Russia? It is not a case of saying there is no security or anything of that sort because, as I understand it, the attitude is a flat refusal even to look into the matter. I do hope the noble Earl in charge of the Bill will tell us what possible justification there can be for an attitude which certainly cannot help in reducing the amount of unemployment in this country.

§ THE EARL OF LUCAN
My Lords, as no other speakers apparently desire to address you on this stage of the Bill, I will briefly answer my two noble friends opposite. What they have said about Russia is something similar to what has been said by them whenever the subject has been brought forward on past occasions, and I am afraid the answer of the Government is now the same as it was then. It is that the policy of the Government, in refusing credit facilities to the Soviet Government, will last until the Soviet Government itself establishes such conditions in the treatment of debts or compensation for confiscated property as will restore confidence and command credit. Noble Lords lay great stress upon the credit facilities restoring to us a large amount of trade 1028 with Russia, but I would respectfully point out to them that there is nothing at the present time to stop anybody trading with Russia. I may add that many of the biggest traders with Russia, such as the United States, have no agreement at all and no system of credit, and other countries which are supposed to be taking away our trade with Russia equally have no credit facilities.

§ LORD ARNOLD
Does the noble Earl say Germany has not credit facilities with Russia to-day?

§ THE EARL OF LUCAN
No, I do not say that. As noble Lords have said, Germany has an agreement but the United States, which is a very large customer of Russia, has no agreement, and as far as my information goes several other countries that trade with Russia equally are not protected by agreement, I am sorry to say I cannot give noble Lords any hope that the Government have changed the policy which has been laid down on several other occasions.

§ LORD THOMSON
Is the noble Earl aware that since 1925 our export and re-export trade with Russia had fallen from £19,200,000 to £11,320,000? That information was given in an answer by the President of the Board of Trade in the House of Commons not very long ago and shows that there is some trade to be done with Russia. Is the noble Earl aware that during the period 1924–7 the export trade of the United States with Russia increased from £9,500,000 to £13,500,000? These are figures we cannot get away from. If there is no trade to be done with Russia of course there is no necessity for trade facilities, but the figures I have given show that there is a large amount of trade to be done with Russia, and that trade is being taken away from us by Germany, which has given facilities by Government action and by indirect action, while the United States also are getting Very great facilities. One has only to talk to people who are trading with Russia to know that. The point of our argument is that trade could be stimulated by these facilities. There are a great many merchants up and down this country who are complaining bitterly that this is not done and it seems to me to be a great pity the Government should adopt the attitude indicated by the noble Earl.