§ 2.48 p.m.
§ Lord BARNBYMy Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they will state for the most recent convenient period the extent of the adverse balance of trade with Russia; and also the figure for the overall balance of trade of Russia with external countries.
Lord ORAMMy Lords, the crude trade deficit with Russia in the twelve months ended August 1976 was £385 million. Figures reported to the United Nations show that in 1975 (the latest period available) Russia had an overall deficit on visible trade of £1,648 million.
§ Lord BARNBYMy Lords, those figures take a little digesting. Arising out of that reply, may I ask whether it is to be understood that the exports that go from this country to Russia are mainly against long-term credits and that therefore the change in the value of sterling can he a disadvantage to the importer? Is it right that in the case of timber, which is understood to be the largest item in exports from Russia, those exports are all at negotiable prices, practically indexed prices, so that as sterling falls the importer has to pay more for the import? Could the noble Lord also indicate what, if anything, is being done to try to encourage importers who are swelling this large adverse balance of trade to meet their requirements in other directions where the balance of trade may be more in our favour?
Lord ORAMMy Lords, in answer to part of the noble Lord's supplementary question, much is being done to encourage British exports to the Soviet Union. My honourable friend, the Parliamentary Under-Secretary of State was recently 295 in Moscow, and a great deal is being done at all levels to encourage British exports to the Soviet Union. On the other part of the noble Lord's supplementary question, I am not in a position to give him the answer about timber imports for which he has asked. If he will agree, I will write to him on that point.
§ Lord BLYTONMy Lords, is my noble friend the Minister aware that the imbalance in trade with Russia is very small compared with the balance of trade deficiency for the Common Market of £2,800 million?
Lord ORAMMy Lords, that raises a wider question. The deficit between the United Kingdom and the Soviet Union arises largely because the Soviet Union is a supplier of raw materials, particularly timber, and, in recent months, crude oil. It is difficult and not always valuable to make comparisons between the deficits or surpluses between particular pairs of countries.
§ Lord SHINWELLMy Lords, are we to understand that the adverse balance of trade with Russia is a demonstration of what is regarded as détente, or does it come within the category of compassion?
§ Lord CARRINGTONMy Lords, is it not a fact that Sir Harold Wilson, on his last visit to Moscow, extended a large loan to Russia at interest rates which are almost inconceivable when we think of what is happening in this country at the moment? What has happened to the will of the Russians to buy British?
Lord ORAMMy Lords, the terms of that line of credit were not out of line with those available to the Soviet Union from our major competitors. The rate at which that line of credit has been taken up has been disappointing. Until this date only some £42 million has been taken up. I can assure the noble Lord that there is a substantial number of Soviet inquiries currently with British companies and the value of those will exceed the total value of the credit agreement.
§ Lord GISBOROUGHMy Lords, are Her Majesty's Government satisfied with the fact that some of this cheap British loan is being used to build up the Soviet textile industry which is then competing directly with our own hard pressed industry?
Lord ORAMMy Lords, the export of textile machinery is a very encouraging part of our exports to the Soviet Union. It is true that they are building up their textile industry, and one has to weigh one aspect of this against the other. It is very desirable that the export of textile machinery should be encouraged and facilitated by this line of credit.
§ Lord ORR-EWINGMy Lords, is it not true that the Soviet Union is now in debt to the West by more than the total of their annual exports to the entire world? Could the noble Lord tell us when it will start repaying these debts to us and to others?
§ Lord SHINWELLMy Lords, would my noble friend arrange that we might export to Russia some literature on the subject of democracy?
Lord ORAMMy Lords, possibly my noble friend would consider making a visit to the Soviet Union. I am sure that there his words would be listened to avidly.
§ Lord BARNBYMy Lords, arising out of the massive adverse balance which the Minister referred to in his original reply, will he see that respect for these figures is given in the appropriate quarter where, admittedly, they are given consideration? Some action has been strongly urged regarding imports from Russia or other countries of goods which are necessarily at prices which reflect a political and not commercial character.
Lord ORAMMy Lords, I can assure the noble Lord that these figures are constantly being studied. The action I indicated earlier in reply to questions is undertaken on the basis of careful consideration of the facts and figures concerned.