§ 2.36 p.m.
§ LORD BARNBYMy Lords, I beg leave 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, in the interest of the expanding exports, they will consider instituting arrangements whereby bills drawn for export will attract in appropriate cases a specially low rate of discount.]
§ THE MINISTER WITHOUT PORTFOLIO (LORD MILLS)No, My Lords. The Government are satisfied that, with the announcement last week of the new arrangements for finance for exports, our exporters are in a reasonably competitive position, and the Government do not consider any special measures for short-term finance necessary.
§ LORD BARNBYMy Lords, no doubt the noble Lord will have noticed that the National Association of Manufacturers, representing a large body of industrialists, have emphatically taken a different view from that. May I also draw his attention to the statement in a report by the representatives of the Federation of British Industries who visited Japan recently, that the proposal I have made here is already available to exporters in Japan?
§ LORD MILLSYes, my Lords. I have noticed the view taken by the National Association of Manufacturers and also the report on the visit to Japan by representatives of the Federation of British Industries. To deal with the latter case first, it seems that Japanese exporters can discount some export bills at specially cheap rates of interest. However, the Japanese have not accepted the same international obligations as have the United Kingdom and 1030 other European countries. So far as the plea of the National Association of Manufacturers is concerned, that was for a reduction in taxation or, as an alternative, for direct financial assistance to recompense manufacturers of exports. I can only repeat what the Economic Secretary said in another place on January 25—namely, that such plans would be contrary to our international obligations.
§ LORD SHEPHERDMy Lords, while the Minister has rejected the idea of special low rates for discounting export bills, would he and the Government consider the possibility of having a fixed discounting rate to prevail for, say, twelve months? As we know, the rate rises or falls according to the bank rate, and a sudden rise of 2 per cent., as we experienced last year, means that our overseas buyers are being called upon to pay more for their purchases than they anticipated when they placed their orders. This uncertainty is (shall I say?) no help to exporters in this country.
§ LORD MILLSMy Lords, of course I appreciate the point, but export bills mature in 90 days or, at the most, 180 days, and therefore the effect of having fixed interest rates would be quite marginal. On the other hand, if it were done by the Bank of England it would be a very complicated matter for the Bank of England to arrange; and if it were done by the Exchequer, again that would be contrary to our international obligations.
VISCOUNT ALEXANDER OF HILLS BOROUGHMy Lords, we have had this particular matter up before, and then I think we were very dissatisfied with the reluctance of the Government to urge upon the banks handling export business to come to some arrangement of this kind. In the present great need of keeping up our export trade, I think that there is a case for the Government's collaborating with the private banks to come to some arrangement of this kind, which would ease the position. Surely, if other sacrifices are being called for by the Government, and everything is going largely to depend on how we keep our export trade up, then every opportunity which is offered should be grasped by the Government to bring some alleviation to those who are so busy trying to get exports higher.
§ LORD MILLSMy Lords, of course I expect the Leader of the Opposition to say that he is dissatisfied with the Government, but I would assure the noble Viscount that the Government are really very concerned with this question. But they have taken the line that it is better to have an international understanding on this matter than to have a race of incentives, which would not help the export trade at all.
§ LORD BARNBYMy Lords, if I correctly understood the noble Lord, in his reply he emphasised the importance of the United Kingdom's not impinging upon international understandings. Would lie not think that the United States would have a similar obligation in regard to the 40-year loan for a large amount which they have announced, made free of interest, for the export of American manufactures?
§ LORD SHEPHERDMy Lords, what I cannot understand is why last week the Minister made the welcome announcement that long-term loans could he at a fixed rate and yet say to-day that it is impossible to do this for short-term loans, which I believe make up the biggest percentage of our export business.
§ LORD MILLSMy Lords, to reply to my noble friend Lord Barnby, I think that I should need notice of the last question he has put to me. On the question of long-term loans, I suggest that the arrangements that have been made are much more effective than could possibly be the case if applied to bills on short-term and transactions of that kind.
VISCOUNT ALEXANDER OF HILLS BOROUGHMy Lords, would it he possible for the Government to arrange to obtain from the questioner the particulars of the case of the American subsidy of exports and to have them printed in the OFFICIAL REPORT?
§ LORD MILLSI have already rather suggested to my noble friend Lord Barnby that he should put down a Question on that point.
§ LORD LINDGRENMy Lords, if in fact a wage pause is necessary so far as the wage-earner is concerned, is not an interest pause equally necessary so far as the financier is concerned?
§ LORD MILLSMy Lords, I should have thought that the opposite would be the case.
§ LORD LINDGRENA "free-for-all".
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, does that mean that Treasury policy now is not to have equal sacrifice from the financier as well as from the wage-earner subject to the pause?
§ LORD MILLSOn the contrary, my Lords; it does not mean anything of the sort.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, I suppose the noble Lord has not yet seen the cartoon in the Evening Standard.
§ LORD MILLSNo, My Lords; I admit that I have not had time to read the Evening Standard.