§ LORD TEMPLEMOREMy Lords, this Order varies the Clearing Office (Italy) Order, 1936, made by the Treasury under the Debts Clearing Offices and Import Restrictions Act, 1934, on July 10 last. I will explain briefly to your Lordships what the Order means. During the period March to November, 1935—that is, before Italian imports into the United Kingdom were prohibited under sanctions—the payment of trade debts between Italy and the United Kingdom, as also of certain freights, was regulated by an agreement which did not involve any compulsion on United Kingdom debtors to make payment to any central account here. The agreement worked unsatisfactorily, so that debts amounting to about £1,750,000 accumulated in Italy. On November 18, 1935, a Controller of Anglo-Italian Debts was appointed under a sanctions Order in Council, to whom debts for Italian goods were payable compulsorily. By that means, some £600,000 was collected up to July 15, 1936, when sanctions were raised, and was applied to reduce the volume of the debts due to the United Kingdom.
When sanction's were raised it was decided to set up an Anglo-Italian Clearing Office, payment to which by United Kingdom 583 debtors would be compulsory. The Clearing Office was duly set up, but His Majesty's Government decided that the sterling it received should be placed to a reserve fund pending the conclusion of negotiations with the Italian Government as to the method of its disposal. These arrangements were established by the Clearing Office (Italy) Order, 1936, made on July 10 and approved by your Lordships' House on July 28. The negotiations with the Italian Government had to be suspended towards the end of July because it was not possible to agree on the provision to be made for the liquidation of the commercial arrears due to the United Kingdom. The negotiations were resumed later in September, and an Agreement was signed on November 6. The text of the Agreement is printed as a Schedule to the Order of which I now ask your Lordships' approval.
The main provision of the new Agreement is that the sterling collected by the Anglo-Italian Clearing Office in London is to be distributed as follows:—18 per cent. for the transfer of commercial arrears under the agreement of 1935; 9 per cent. for the transfer of other commercial arrears; 3 per cent. for the transfer of financial remittances, including interest, rents and dividends; and 70 per cent. for current trade debts. Of the sums already collected by the Clearing Office and placed in the reserve fund, 50 per cent. is be allocated between the first three heads I have mentioned and 50 per cent. is to be allocated to current trade debts. Paragraph 3 of the new Order accordingly provides that the Clearing Office shall no longer place its sterling receipts to the reserve fund, but shall distribute them in accordance with the new Agreement. This paragraph also enables the sums already in the reserve fund to be distributed on the agreed basis which I have explained. Paragraph 1 of the new Order exempts from the original Order debts falling due on or after November 16, 1936, in respect of certain transactions which it has been 584 agreed shall be excluded from the clearing. The remaining provisions of the Agreement do not require any variation of the Order made on July 10, 1936. In accordance with Section 4 of the Debts Gearing Offices and Import Restrictions Act, 1934, this new Order must be approved by each House of Parliament within twenty-eight days from the date of the making of the Order, which period, I understand, expires on Tuesday next. I beg to move.
§ Moved, That the Special Order, as reported from the Special Orders Committee yesterday, be approved.—(Lord Templemore.)
§ On Question, Motion agreed to.