§ 3.8 p.m.
§ LORD STONHAMMy 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 whether they are aware that the General Electric Company of America has requested the U.S. Government to cancel, on grounds of national security, the contract recently awarded by the Tennessee Valley Authority to a British company, and what steps they are taking to ensure that this firm and its employees are not unfairly deprived of the fruits of their enterprise and skill.]
§ THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE)My Lords, I have no reason to suppose that the award is not firm. The United States Government can be in no doubt about the views of Her Majesty's Government on this matter.
§ LORD STONHAMMy Lords, while expressing thanks for that heartening reply, may I ask the noble Earl whether he is aware that this is a far more important matter than a single contract? The Times Washington correspondent reported this week that there is pressure for a heavy embargo on heavy equipment, and that they have even tried to allege that wollen glove imports are a threat to United States security. Is it not the case that, if we go on like this, the list of goods 809 which America will not buy from us will be longer than the list of goods that she will not let us sell to Russia? May I ask the noble Earl whether, in these circumstances and in view of the dire possibilities that may arise if this goes on, he will consider the possibility of our sending a trade mission to the United States?
THE EARL OF CORK AND ORRERYMy Lords, may I ask whether this is not, perhaps, one of the first results of interdependence?
§ THE EARL OF DUNDEEMy Lords, the purchasers, who are the Tennessee Valley Authority, have very clearly stated that they do not consider that the question of security arises and that they are not going to ask for an opinion about it. As the noble Lord probably knows, the question has been raised in a House of Representatives Committee but we do not know whether it will ever reach the Floor of the House.
VISCOUNT ELIBANKMy Lords, may I ask the noble Earl whether he will bear in mind that it is helpful to those Congressmen and others who object to these tricky tactics on the part of some of their compatriots if a flaming protest is voiced in this country against these tactics, especially at a time when Washington, through its representative on the Consultative Committee in Paris, never ceases to do What it can to prevent us from expanding our trade with China?
§ LORD SHEPHERDMy Lords, arising out of this Question, may I ask the noble Earl the Minister whether Her Majesty's Government will make representations to the United States Government to the effect that there should be a firm ruling from the Office of Civil and Defence Mobilisation in regard to tenders made by companies in this country? As I understand it—and I would ask the noble Earl whether he can confirm this—tenders have been made in the United States honestly and fairly, and within the regulations laid down by Her Majesty's Government. Is it not intolerable that, when a contract has been given, there should be any threat that it will be rescinded on security grounds?
§ THE EARL OF DUNDEEMy Lords. I will add only one or two observations in reply to that question. First, I do 810 not think we can seek to interfere in the decision of the United States Government as to what is or is not a matter of security to the United States. The other thing I should like to mention is that under the Buy American Act the Office of Civil and Defence Mobilisation are entitled to advise, but we do not know whether they are entitled to do any more, or whether their advice need be accepted by the purchaser. In the case of the Greer's Ferry electric contract it was the purchasers who appealed to the Office of Civil and Defence Mobilisation for a ruling before they decided on accepting the contract, and they were bound to abide by the ruling. The Tennessee Valley Authority have not requested a ruling; and I should not like to say whether, if a ruling were given without their requesting one, they would consider themselves in any way bound to abide by it or not.
§ THE EARL OF SWINTONMy Lords, would it not be much simpler and lead to less ill-will and misunderstanding, and make it much fairer to contractors in this country and in America, if, when a contract is to be tendered for, there could be, before tenders are invited, a ruling by whatever is the appropriate department in the United States—the Defence Department or the other Department referred to—as to whether a defence matter is involved and whether United States contractors must on security grounds have the contract? That would be a perfectly simple and understood procedure; and it was the way, if I may say so, in which those of us who have had to deal with defence contracts in this country have always acted. I suggest that method, rather than to invite tenders from all over the world and then, after the tenders have gone in, some of which are known to be lower than American tenders, for the American manufacturer to go to the Defence Department or the other department and ask to have the tender rejected on defence grounds. That, surely, would be simple and short and would lead to good will and better understanding on both sides.
§ THE EARL OF DUNDEEMy Lords, I very strongly agree with what the noble Earl, Lord Swinton, has just said, but I think I ought to add that there is no real reason to think that this contract 811 which has been accepted by the Tennessee Valley Authority is in any real danger of being cancelled; and the Tennessee Valley Authority have expressed the view that this turbo-generator does not concern the question of the security of the United States. That is their opinion.
§ VISCOUNT STANSGATEMy Lords, would the noble Earl remember, and ask the noble Earl, Lord Swinton, to remember, that it was we who set this fantastic example of sham security claims, in order for manufacturers to secure protection, in the Safeguarding of Industries Act thirty years ago, when things such as false teeth and yeast were declared by our Committees to be necessary to security and therefore to be protected for the national safety?
§ THE EARL OF DUNDEEMy Lords, I think that what my noble friend suggested was that we should declare in advance, before people were asked to tender, that false teeth are necessary to national security.
§ LORD STONHAMMy Lords, if we could get back to the Buy American Act, which the noble Earl mentioned, is it not the case that that Act lays down a 12 per cent. differential in respect of the figures and that in this contract the amount involved was 5 million dollars, which was more than the 12 per cent.? Would he seek an assurance from the United States Government that when tenders from this country prove to be 12 per cent. or more below the lowest American tender there will not be any denial to a British company on the grounds of security?
§ THE EARL OF DUNDEEMy Lords, the noble Lord is quite correct in his figures, and in this case the price was well below the 12 per cent. margin. There is a 6 per cent. general preference and another 6 per cent. if the contract is to be placed in an area of high unemployment in the United States, adding up to 12 per cent. But I do not think we could try to interfere in the United States Government's definition of what constitutes American security. All that might be done, as the noble Earl suggested, is to suggest that a ruling should be given in advance and before any tender is invited.