HL Deb 29 January 1959 vol 213 cc972-5

3.20 p.m.


My Lords, I beg to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government what plans they have for the protection of British firms who, having accepted invitations to tender for installations and equipment in the United States of America, find, after submitting the lowest tender, that they are denied the contracts on grounds of alleged "national security".]


My Lords, the final decision on the acceptance of any tender must rest with the authority placing the order, but the views of Her Majesty's Government on this unfortunate case have been made abundantly clear to the United States Government.


My Lords, is the noble Earl aware that the vigorous protests made, which we strongly support, have apparently been rejected by Mr. Dulles, who, in regard to our protests at this un-American activity, says that this w as an honest decision? How can we free restrictions on dollar imports if they are able to stop our exports on any pretext? Will the Government seek a firm undertaking governing future dealings and, meanwhile, demand compensation for the losses which British firms have sustained in this way?


My Lords, under the Buy American Act the Executive is entitled to reject any order on grounds of national security, which they did in this case. The matter was referred to the Office of Civilian and Defence Mobilisation who stated that if this present procurement was not awarded to the domestic producer there was reason to believe that the domestic productive capacity in the United States would be reduced to a level inadequate for emergency requirements. I think the United States Government must be the judge of its own security. There is nothing we can do about compensation. All we can do is to say that this sale would have represented an extremely insignificant proportion of their total need of the kind of material: in question; that the security issue was not raised until the last moment, and that, of course, this sort of action does not increase confidence in the sincerity of the American Government in carrying out the liberal trading policies into which we and they have entered.


But could not the noble Earl suggest to the United States Government that they could make up their mind whether the supply of two turbines was a matter of national security before inviting British firms to tender, arid not after those firms had been successful? And does it not strike the noble Earl as grossly unfair that this British firm should be put to the great expense of tendering in this way, and should then be deprived of the contract in an arbitrary way? Is it not the case that it was not national security but the fact that a politician wanted to secure some advantage at an election that caused this switch of the contract?


My Lords, would not the noble Earl agree that this is not an isolated case? Could be also say whether similar pressure has been brought to bear to prevent the adoption of the Decca electronic system for the naviga- tion of international aircraft and shipping lines, which we all know to be vastly cheaper than the American system, and very much more efficient?


My Lords, in reply to the noble Lord, Lord Stonham, I think the considerations which he mentioned in his supplementary question have all been clearly and forcefully presented to the United States Government. As for this not being an isolated case, I should not like to say, without notice, whether or not it is isolated; but I am glad to say that it is exceptional and that, in general, the United States Government are carrying out the more liberal trading policy which both of our countries are endeavouring to pursue.


My Lords. may I ask the noble Earl whether in the future Her Majesty's Government will seek to obtain from the United States Government a decision on national security before they apply for estimates?


My Lords, I think that that is certainly desirable. The noble Lord may have. noticed that Mr. Dulles said at a Press conference on January 27, when he conceded that the national security issue was raised after the bids were called for, that sometimes the timing between Government agencies is not what it should be.


My Lords, is the noble Earl aware that it would be more becoming on the part of our Ally. the United States, when they are putting forward preposterous excuses for denying contracts to British traders, if at the same time they ceased putting obstacles in the way of British traders doing trade with China?


My Lords, I think the noble Viscount has a Question on that subject next week.


My Lords, could the noble Earl say, since. to use his own words, this was an isolated case, whether Her Majesty's Government have asked the United States Government to compensate the British firm for the losses sustained through their arbitrary decision, and would it not be fair to do so?


I do not think so. But perhaps, to be more sure, the noble Lord had better put down a Question. I think I had better have notice of that point.


My Lords, is it not a fact that the rejection of this tender on the alleged ground of security, though not disclosed beforehand by the American Government, was accurately prophesied by an interested American politician?


I think that that is correct.