HL Deb 16 December 1948 vol 159 cc1158-73

3.41 p.m.

LORD STRABOLGI rose to call attention to the export trade of Great Britain, including the entrepôt trade; and to move for Papers. The noble Lord said: My Lords, in venturing to bring before your Lordships the matter of the British export and entrepôt trade, I claim some little authority, having been engaged in this trade with some small success for over twenty years. Nor am I overlooking the fact that the export trade of Britain has been increased in a very satisfactory manner, especially during the present year. In October last there was a 40 per cent. increase over the average of 1938. The October exports were £140,100,000, and that was a rise of £9,100,000 on those for September.

The imports for the same month were £174,400,000, and the re-exports £5,400,000, which left a visible trade deficit of £29,000,000. In November we had the highest exports ever, of £147,000,000, yet there was an adverse trade balance of £33,900,000. So, although we have increased our exports and they are still going up—I believe December will show even better results—there is, nevertheless, a deficit on our trade of over £1,000,000 a day.

While we can take credit for a very satisfactory increase and for very great efforts by all those engaged in the export trade, there is no justification for complacency, and I am sure my noble friend who is answering for the Government would be the last to say there was. Furthermore, we may have to wait for a long time for the terms of trade to move in our favour. There is a growing long-term world food shortage, which is bound to keep all general world food prices against us. There are also shortages of certain raw materials, of which I will mention but two of the important ones—namely, jute and mineral oil. Therefore, it is obvious that a greater drive than ever is necessary, and a speeding up of manufacture for export is also required. I hope that my noble friend will appreciate any suggestions that I can make which are of any use, and also the spirit in which I raise this question.

I spoke just now of the need for speeding up our rate of manufacture. One of our difficulties at the present time is the slow and long drawn out delivery dates that are promised for nearly all kinds of machinery. There is a serious bottleneck there.

We have very important assets, which I will briefly enumerate. I am speaking now of the whole nation. First of all, it is much easier to trade in Europe to-day than it was after the First World War. After the First World War we had the cordon sanitaire, which was an impassable barrier. Now, the so-called Iron Curtain is no barrier to trading with Eastern Europe. We are doing a considerable trade with Eastern Europe, and, as was stated quite recently in another place by the Minister concerned, it is the policy to increase and foster this trade. Secondly, the reputation for British manufactures and workmanship is still very high; it is as high as ever it was. That is also a tremendous asset to us, and we must preserve it. There have been complaints of bad quality goods in a few cases, and anything the Board of Trade or the Government can do to discourage that, I am sure they will do. The reputation of British manufacturers is very high indeed. It is still possible to sell textiles in most markets over the 'phone, if they are British textiles. Thirdly, we still have our precious reputation for fair dealing. The British mercantile practices are recognised as the best everywhere, and our merchants and businessmen have a good reputation all over the world for keeping their bargains. That is a further tremendous asset to us. Lastly, we have the experience, the knowledge, and our connections all over the world.

The export trade is best carried on by private merchants. It is not a thing that civil servants can really handle. Civil servants can sell on a sellers' market, of course; but anyone can sell on a sellers' market. For example, anyone to-day could sell coal in any quantities. But it is when the sellers' market gives place to a buyers' market that the skill, the connections and the long experience count and also the enterprise and willingness of the private merchants to take certain risks. I do not know in what form the Iron and Steel Bill will reach us from another place (it is still going through its various stages there) but, as the Bill is drawn at present, my reading of it is that the marketing of the steel will in future be left in private hands. I am glad that that is the case.

I would like to say a few words about the entrepôt trade. It has been of great importance to this country in the past; and it can be restored and be of great importance to us again in the future. I hope everything will be done to foster and encourage the entrepôt trade. I will, in a moment, suggest one way in which this can be done. In passing, I must confess to some dubiety about the wisdom of having closed down the Liverpool Cotton Exchange. I believe that if we had the decision to take all over again it might well be a different one. That is one example. There are many other raw material exchanges in the country which are doing good service to the nation, and I hope they are not only not interfered with, but helped in every way possible.

Sterling is becoming a hard currency in certain markets. I look forward to the day—and it is not impossible to see this—when the sterling bill drawn on London will again be the great medium of exchange. It was the real international currency before the First World War. It financed not only trade between our country and other countries, but international trade all over the world, and brought great advantages to us here in London. But an entrepôt trade needs a good deal of capital and credit. While I make no complaints about the British banks, the merchant bankers and the finance houses—and least of all about the Bank of England—I think greater risks could be taken. I do not know how far the Treasury have a say to-day in that kind of policy, but the situation is such now, and it is so necessary for us to earn money by our exports, visible and invisible, including the entrepôt trade, that certain risks are justifiable. I think something more could be done in the way of making cheap credit available for that purpose.

With regard to the export trade, as distinct from the entrepôt trade, there is a great deal of exaggeration about the difficulties created by the system of licensing, permits, and so on. That works remarkably well, and there are not great delays. Any established house which has been carrying on a regular trade with one of our overseas markets has no difficulty in getting the necessary permits. The machinery has been greatly improved in that respect. In my experience, and in the experience of my friends, the Board of Trade and the Department of Overseas Trade have been most helpful, as are their representatives abroad. I believe great improvements have been made in our consular service, and we have very good trade representatives attached to the various embassies abroad. They are most helpful to British merchants.

I would now like to make one or two suggestions as to where I think further improvements can be made. First, I will deal with the question of visas for people who want to travel abroad on their lawful occasions, and, above all, for those who want to travel abroad on business of benefit to this country. In certain countries there is a great deal of delay in granting visas, and I am sorry to say this applies particularly to the United States of America. If anyone has travelled before to the United States and had a visa, and returned safely, there is no difficulty in getting a new one; but the fresh applicant, the man who has not gone to the United States before, has a good deal of difficulty in getting one—at least, there is not difficulty, but a great deal of delay, and I am going to make a suggestion to meet it. Why there should be delays I do not know. If you want to do so, it is quite easy to get into the United States illegally, either over the Canadian or the Mexican Border. Last year I crossed over the International Bridge at Niagara from Canada into the United States, and the only formality was to ask the occupants of our motor-car where they lived. Those who lived in Montreal or Ottawa carried on, but as I said I lived in England I had to get out and have my passport stamped. There was no great delay, but if I had said with a Canadian accent that I lived in Ottawa, I could have got through without any formality. I believe the same thing applies on the Mexican Border.

Why should there be all this delay for British busines men who wish to go to the United States for bona fide business? The suggestion I am going to make is this. We have abolished the visas for Americans coming to this country, and as a reciprocity our American friends have abolished the fees on visas for British subjects going to the United States. Why should not some arrangement be come to under which the Board of Trade, on the recommendation (we will suppose) of the local chamber of commerce, with their own knowledge of business houses, provide a certificate that so-and-so, going to the United States on legitimate business, is bona fide, simply as a means of speeding up the decisions on the other side of the Atlantic? I suggest that negotiations to that end should be entered into. The Americans do not want to be obstructive; it is only the cumbersome machine, and I believe they would welcome some such certificate of bona fides. I cannot see why that should not be done.

Now take the other case, the granting of British visas to bona fide business men wishing to come here. I may say that the United States is not the only country where there is a good deal of delay. Some Middle Eastern countries, with no ill-will, take a long time to grant visas, especially for the first time. I think the same sort of Governmental certificate might be brought into force there. We have agreed to abolish visas reciprocally with a great many countries. Your Lordships are aware of them—Switzerland, Iceland, Norway, Sweden, Denmark, Italy, Luxembourg, France, Belgium, Holland; and there may be others. I hope this will be extended, and I dare say that that is the intention. In fact, I completely support the ideal of my right honourable friend the Foreign Minister, who says that what he wants is to be able to go to Victoria station and take a ticket for wherever he wants to go without a passport, visa or anything else. I would like to see a return to that system.

Now take the case of a bona fide business man who wants to come to this country. I have brought to the attention of the Chancellor of the Exchequer certain cases where civil servants from certain countries, coming here on buying missions, were so held up and "humbugged about" in getting their visas that they by-passed this country altogether, went straight across to the United States and placed their orders there. There is another case where they would have come and placed their orders here, but because of the delays—again they were perfectly bona fide civil servants from Middle Eastern countries—they went straight to Brazil, did the business there and cut out the British business houses.

I want to make it quite clear to my noble friend that the visa, as such, is no defence against the entry of undesirable people. It is quite easy to get across any frontier in the world to-day if you really want to, without going through these formalities. We have only to remember the number of our own agents and members of the Maquis and so on, who got into German-occupied territory during the war in spite of the immense German machinery for preventing that very thing. There is a great traffic in forged passports and visas in Europe, and my noble friend knows about that. The real "villain of the piece," the saboteur or the spy, does not go to the office of the local British Consul to ask for a visa for his passport—that is the last place to which he will go. He has no difficulty in getting into this country if he really wants to. How long he will remain at large is another matter. Therefore, as a defence against undesirables, the visa is of little use, and anything that can be done to quicken up the machinery for granting visas to bona fide business people with legitimate business in this country should be done. There we can help. It may be a case of being too careful or over-cautious, but I think this matter should be looked into. I beg my noble friend—as I am sure he will—to take up this particular matter.

The next suggestion I have to make for the general assistance of the export trade is the following: I think there is a case for increasing the business allowance for business men travelling abroad on their legitimate affairs. I do not complain about the Bank of England— I think the officials there are very reasonable and act quickly. But £8 a day in the United States, Canada or the Argentine, is not enough. A man going there on important business cannot help spending money, and he should be helped to return hospitality. That is important; and the present allowance is really insufficient. I know that in special cases more is granted and, as I say, on the whole the Bank of England has been very reasonable; but I think there ought to be relaxation there and the allowances made rather more generous. The Government can compensate by stopping the allowances which seem to be granted to people who have no legitimate business at all. Those are just a few suggestions which I venture to make to my noble friend. I think they are constructive and I hope—indeed, I am sure—that he will make the necessary representations to the Department concerned. Generally speaking (and I know he will agree with me here) we must not relax our efforts in any direction. The increase of our export trade is vital for our economic survival, and the quickest way in which we can restore ourselves to independence and solvency. I beg to move for Papers.

3.58 p.m.


My Lords, may I intervene for just a few moments because the noble Lord has raised a most vital and important subject upon which we, too, have some views. We felt that, important as are some of the remedies which the noble Lord suggested—such as improvement of visas and giving more than £8 a day to business representatives—they do not really go to the fundamental root of the problem of increasing our exports. The noble Lord expressed some satisfaction, and quite rightly, at the improved export figures. I am sure we all share that satisfaction, but if, during the 1945 Election, the noble Lord's Party had carried as part of their propaganda the posters We Work or Want, which we have seen in 1946 and 1947, I think the result of the export drive up to date might have been rather more successful than it has been.

May I make three observations upon the noble Lord's contention that the position has substantially improved? The first is that we still have a long way to go; the second, that the improvement has been brought about, to a considerable degree, by the use of artificial stimulants to close the trade gap and by the deprivation of our people of goods and food which they had been led to expect two or three years ago and quite reasonably hoped to be able to consume; and the third, that until quite recently the figures have been considerably bolstered up by the inclusion in our exports of such artificial items as cigarettes for the Channel Islands (which are promptly brought back by visitors to the Channel Islands from this country), and motor cars and other supplies to the same destination. Really, my Lords! I do not think the Government can claim much credit for the increase in the export trade so far as items in that category are concerned.

As I have said, I think we have to go quite a long way back, and in spite of the remark of the noble Lord, Lord Morrison, that "It is not always wise to hold a post-mortem and rake up the past," I believe we are entitled to look back and reflect upon what kind of encouragement and education the people of this country have had in the past as to the importance of the export trade. There are great leaders in the noble Lord's Party who are highly respected by all their followers, and whose words are regarded as carrying great weight. Many of these words in the past must have sunk in; and the words of such men as the Secretary of State for War, Mr. Shinwell, or the Minister of Health, Mr. Aneurin Bevan—one of the most powerful and illuminating leaders in the noble Lord's Party—are of great importance.

Now, my Lords, there does seem to me to have been a change of front. Up to 1944 the workers of this country were not encouraged by their leaders to believe that exports were so important. I submit for your Lordships' consideration that great harm was done by the statements which used to be made, and by the outlook which formerly prevailed. Some of our failure to export in recent times is due to the kind of education given to the workers in days past by the present leaders. In 1944, for instance, Mr. Bevan said this: By some twist of the Tory mind, it is good trade to persuade someone in a remote part of the world to buy our goods, but ruinous to allow the same goods to be consumed by our own people. We are told by some people who ought to know better that we shall need to increase our exports after the war by 50 per cent.… Expanding exports are the will-o'the-wisp private enterprise is compelled to pursue.… When Mr. Bevan goes to speak at some great industrial concern on the export drive, it is not very encouraging if the workers feel either that he has changed his mind or that he led them up the wrong path before the war.

Let me turn for a moment to Mr. Shinwell, who had a passing phase which did not exactly help our export trade when he was Minister of Fuel and Power. The great contribution he made there was to say that there was not going to be any fuel crisis—when the fuel crisis was just about to break. Mr. Shinwell said: Increased exports are demanded. There never was a greater fallacy uttered in this or any other Assembly… I do not feel that there is in such a statement a solid foundation on which to build enthusiasm for the immediate post-war export trade. And now we see that the Government are engaged upon an export drive based on appeals made by those who have sneered at exports in the past. The Government have had no real long-term programme. If one looks at their policy since 1945 it has amounted to a series of short-term policies to overcome crisis after crisis. There has been no real long-term policy, and we do not feel that centralised control in Whitehall, or centralised planning, can ever be successful, in view of the complexity of modern industry.

It remains true that we depend for our whole sustenance upon the proceeds of a healthy and prosperous industry. That cannot be planned by political means. The need for this country, if we are to survive, is to compete successfully in highly competitive markets throughout the world. It is no good telling people that times will become easier if they vote for a particular political policy. I am afraid that the Party opposite, who at the last General Election made promises of easier times for less effort for everyone, are to-day reaping the benefit of those promises. My own Party have not made and will not make such promises. I repeat, this nation is dependent on successful competition in world industries. We see the results of the Government's policy of nationalisation, which is also a policy of restriction and frustration. In the export trade last year, 45 per cent. of the industries were either producers of steel or great users of steel. If steel goes up in price—which is not an unfair assumption, as coal, electricity and transport have gone up in price since nationalisation—our export trade is bound to suffer. And in the meantime there will be the uncertainty created by the proposals for nationalisation which have been put forward by the present Government and which can do nothing but harm at such a critical time. I am afraid that, good as the noble Lord's suggestions are, the fact remains that a policy of nationalisation, of central control, central planning, restriction and frustration, based upon a wrong education of the workers by leaders who hold responsible positions in the Government to-day, is not likely to succeed in consistently achieving exports such as the country requires.

4.9 p.m.


My Lords, may I first of all thank my noble friend Lord Strabolgi for a most instructive speech? If I do not find myself in agreement with him on some points, I am sure I can agree with him in paying a tribute to the industry of this country for its record-breaking feat of November, when our exports reached an all-time peak of £147,000,000. The consequence of that is that we have now reached our 1948 target of 150 per cent. of the 1938 volume. I must also agree with my noble friend in some of the comments he made about exports. If I may get the bad things over first, I agree with my noble friend that, in spite of a magnificent effort, there have been some unfortunate cases of British manufacturers attempting to cash in on the sellers' market by sending out goods which have not maintained the high tradition of British manufacturers. I think the noble Lord will agree with me that the number of those cases is, on the whole, insignificant.

But the noble Lord quite rightly said that there was no room for complacency. We have a hard road to travel. We must increase our exports. I know the noble Lord will agree with me when I say that we have not only to keep up our quality, but also bear in mind that one of the big problems facing British industry to-day is the question of price. In many of our most valuable commodities the sellers' market is coming to an end; in fact, in some it has come to an end already. Granted that our high British quality remains, the ultimate test of British industry in the export markets is going to be that of price.

May I now deal with some of the other suggestions which my noble friend made? He quite rightly said—and it must be apparent to everybody—that the main burden of the export drive in this country must rest upon the individual private trader. Noble Lords on all sides of the House with vast experience in that field know that the rôle that the Government can play in export is a minor one and, in a good many cases, a negative one. By the negotiation of bilateral trade agreements to-day, they can overcome the artificial currency barriers which are insurmountable to the ordinary trader. The British Government have been able to do that. They can also bring about a revival of trade by taking the long-term view and making multilateral trade agreements. This, again, the British Government have done. On the whole, the United Kingdom have played a big part in the negotiations leading up to the Havana Charter for an International Trade Organisation. The Government can also see to it that our consulates are properly staffed with commercial experts. They can also do much in the control of scarce commodities and, by a negative control of the home market, bring the export pattern nearer to the targets set for export industries.

In the last analysis, it must always be the private trader who has the actual conduct of the export trade. My noble friend raised the question of steel. As he rightly said, there is no intention whatsoever to substitute another system for the export market arrangement of the steel industry which now exists and which has been carried on by that industry for so many years. That was the whole idea behind the proposal that the firms and their subsidiaries overseas should retain their identities, so that the organisation may go on in exactly the same way and we may keep all the good will that they have built up. The only effort the Government will make in the way of an alteration will be an attempt to improve it as experience dictates.

Your Lordships may be interested in one exception to the general position I have outlined, and that is the present position in the coal industry. In 1938 we exported as cargo some 36,000,000 tons of coal. The comparable figure for 1948 is not expected to exceed about 10,000,000 tons. United Kingdom coal exports will increase, but availability, after meeting increasing home requirements, is likely to be considerably less than the potential demand for many years to come. In these circumstances, it is essential to use our limited availability of export coal to the best advantage, to enable this country to secure in return supplies of food and raw materials and to implement our obligations to those countries which have joined with us in the Organisation for European Economic Co-operation. We have to play our part in the economic recovery of Europe, without which we cannot ensure our own recovery and economic stability. Therefore, for some time to come, the export of coal will be under the direct control of His Majesty's Government through the National Coal Board. The active marketing will always have to be carried out by those of our industrialists who are engaged in the coal trade.

My noble friend then made some concrete suggestions. He thought that financial credits could be granted more freely. I can only conclude that he had in mind the facilities of the Export Credits Guarantee Department. At the present time, that Department is doing a great deal to help, not only the export trade but, as my noble friend said, the entrepôt trade as well. The guarantees are given against the risks involved in overseas trading, whether it be direct exports from the United Kingdom, re-exports, or entrepôt trade—that is, the sale by United Kingdom merchants of goods shipped from one country to another outside the United Kingdom. These risks include all the usual attendant risks, not, however, such as that of wage variation, which, as my noble friend knows, is covered by the ordinary industrial agreement. I think that most risks which arise from events occurring abroad which are not within the control of the United Kingdom seller or the foreign buyer, can be covered by the guarantee facilities. This, again, is not an inflexible rule. If any British merchant finds himself up against difficulties, even on the question of the fixation of price, I am sure that the Department concerned will give most sympathetic consideration and try to make as flexible as possible the financial credits and guarantees which they may grant.


I went out of my way to say that I thought that the Department of Overseas Trade and export credit system worked very well. What I had more in mind was the banking policy, which I think depends largely upon the Treasury and Bank of England policy. I believe some extra latitude is needed there. I was thinking of, not the Government Department concerned, but the banking world.


So far as His Majesty's Government can bring any influence to bear upon the banking world, I can assure the noble Lord that the remarks he has made will be taken very much to heart, and all the representations we can make will be made.

My noble friend also mentioned the more speedy granting of visas, with specific reference to the United States of America. I fully agreed with him when he quoted the words of my right honourable friend the Foreign Secretary. It is His Majesty's Government's policy to do away entirely with visas. That is our wish. When we come to America, however, the position is difficult. Let us be frank about it. The position is difficult because of the complexities of the United States immigration laws. The suggestion which my noble friend has made has already been made to the appropriate Department of the American Government, but I must confess that their reply was to the effect: "We do not want the recommendation of a Government Department, thank you very much. We can conduct our own business in this respect quite well." I am afraid we can only hope that the words of my noble friend this afternoon will have more effect upon the American Embassy than the representations of the Board of Trade have had up to date. It is unfortunate that there is no reciprocal arrangement. As the noble Lord rightly said, no visa is necessary for an American to come into this country, but the reciprocal arrangement is conspicuous by its absence.

With regard to the speeding up of visas for business men visiting this country, my noble friend mentioned a number of countries where arrangements have been made so that no visas are required when foreign passports are tendered. Perhaps it would be of interest, in case he left out one or two, if I gave your Lordships the full list of countries with which these arrangements have been made. They are: the United States of America, France, Belgium, Luxembourg, Norway, Denmark, Sweden, the Netherlands, Switzerland, Iceland, and Italy. In those cases no delay could possibly arise. There are other countries, such as Austria, Spain, and South America, where a visa is granted on the production of satisfactory evidence that the traveller is visiting this country to do business. I was rather alarmed at the picture which I thought my noble friend painted of the ease with which all the unscrupulous people of Europe could get into this country, and at his suggestion that there was no protection against it. I dreamt of unsavoury gentlemen, of whom we have had quite considerable news lately, being parachuted into this country in swarms in the middle of the night. If that is so, I am afraid it is without the knowledge of my right honourable friends, the President of the Board of Trade and the Home Secretary—


Of course it is.


—and I am going to have the most stringent inquiries made. I hope my noble friend will not think I am saying anything amiss, but I do not know whether any of his particular friends have come into this country in this way. If he would give us their names, we should be only too happy to deal with the matter! I know he will agree with me that it is necessary for the greatest caution to be exercised about people coming into this country on the pretext of business. There is the danger that, once they have arrived, it may be impossible to send them back to their own countries, and thereby our foreign population is increased. That is why my right honourable friend the President of the Board of Trade cannot, in this class of case, have the last word. The security of the country is at stake, and the Home Office, unfortunately for business but fortunately for the security of the country, take great pains to see that these undesirable people who cannot be readily sent back are not allowed in. But, in spite of what my noble friend said, I do not think that this applies to reputable business men. There may be one or two unfortunate cases. I think my noble friend has helped considerably in bringing such cases to the notice of the Home Office. We are trying to do everything we can to ease this position, and in spite of the sad picture which my noble friend drew, I hope that it is not quite so bad as he made out.

My noble friend also brought up the question of the expense allowance. Ever since I have been in business the expense allowance has always been a source of argument between the two people, whom I can perhaps call the "grantor" and the "grantee." I do not think a case has been made out for a greater increase in the business allowance of British business men who go abroad. My noble friend said the allowance for a business man to go to America was £8 a day. That is not accurate; it is £10 a day—and I am informed by the Bank of England that the maximum amount is allowed in nearly every case. It is £8 a day for the Continent. Those are the allowances for people going to these places, the United States of America, on the one hand, and the Continent, on the other, on bona fide export business. On other kinds of business—that is to say, market research, or anything like that, which has some connection with export—the allowance is £7 a day for the United States and £6 a day elsewhere. If one goes to America as a delegate to a conference or anything like that, one is allowed only £4 a day.

So if your Lordships take the difference between £4 a day and £10 a day—say £4 a day is recognised as the lowest form of subsistence, and £10 is subsistence plus entertainment—I think you will agree that the entertainment provision is not bad. It would obviously, I think, be undesirable for business men to go to America and indulge in ostentatious entertainment. We are quite alive to the fact that business men have to entertain. I have spent my whole life in industry and commerce, and I know it is a fact that considerable business always accrues from moderate entertainment. But there must be a limit, and I think it would do this country a great deal of harm if business people went to America and spent a great deal of money, the Americans being quite aware of the currency position. My Lords, as I have not had time to reply fully not only to this point but to other points which noble Lords have made, and to which I desire to reply, I will, with your Lordships' indulgence, break off now, and perhaps I shall be permitted to continue later.

House adjourned during pleasure.

House resumed by the Lord Chancellor.