§ 9.53 p.m.
§ Lord HACKING rose to ask Her Majesty's Government whether they will reverse present policies towards British-American Chambers of Commerce in recognition both of the contribution which their members make to British-American trade and of the adverse consequences to British-American trade when such or similar bodies are dissolved. The noble Lord said: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper. The Question concerns British-American Chambers of Commerce in North America, and I should at once declare my interest. My firm is a member of the British-American Chambers of Commerce in New York, Los Angeles and San Francisco. I have addressed the New York and Los Angeles Chambers of Commerce and I have accepted an invitation to address the San Francisco Chamber of Commerce next year. I assure your Lordships, however, that I intend to address the House on this problem with my customary lack of prejudice.
§ As I have indicated, the debate concerns Chambers of Commerce in North America. It is important to look at the circumstances in which they are operating. New foreign investment into the United States of America in 1978 has reached unprecedented levels. It is expected to be well over 6 billion dollars by the end of this year. Furthermore, British companies are taking a lead. In the first six months of this year known corporate acquisitions by foreign companies produced, against popular assumption, the following figures: 32 per cent. of those acquisitions came from the United Kingdom; 28 per cent. came from Canada —making those two countries account for 60 per cent. of all these foreign acquisitions—11 per cent. came from Germany; 5 per cent. from Switzerland and 4 per cent. from Japan and from Belgium.
§ Among those new investments from Great Britain, there were very large investments—for example, ICI has entered into an enormous investment of 600 million dollars in the building of a new ethylene plant in Corpus Christi, Texas. To take 686 another example of big investment, Unilever has, at the colossal price of 482 million dollars, acquired the National Starch Company. But as well as the well known names are smaller companies from the United Kingdom undertaking smaller acquisitions. The majority of these new United Kingdom investments are for a million dollars and often for much less.
§ To complete the figures—and I promise not to confront your Lordships with further figures or statistics this evening— there are at present over 1,000 British companies operating in the United States of America. The current level of exports from the United Kingdom to the United States of America is at the 3 ½ billion dollar mark per annum. Now many of these new companies from the United Kingdom are not experienced in America and, rightly, need much advice and assistance. You would have thought, therefore, that this is the moment to maximise the effectiveness of our trade operations in the United States of America.
§ We are well served by trade officers— Consuls and Consuls-General of the highest quality—but they cannot provide all the needed advice and assistance. Therefore, it is the Chambers of Commerce in New York, San Francisco and Los Angeles who have played their part. Indeed, I am happy to report that the relationship between Government officers —Consuls-General and consular officers— and the Chambers of Commerce are excellent. Both recognise that their roles are complementary one to the other.
I should like to quote from a very recent publication by the Los Angeles Chamber of Commerce in which the British Consul-General in Los Angeles said:
The British-American Chamber of Commerce of Los Angeles is a very good example of how an Overseas Chamber, working in close contact with, and with the support from the Consulate-General, can make a significant contribution to trade promotion in both directions: any businessman who wants to keep in touch with developments in Britain and two-way trading opportunities would be wise to join it, and misses much of it if he doesn't … Locally, we are helped by the British-American Chamber of Commerce not merely in arranging lunch-time meetings to hear visiting speakers (an important task they perform well) but also in helping American businessmen who would like information and even some indication of opportunities to do business with Britain, but prefer not to use the official machine to get it".
§ It is therefore with no little sadness that I report to the House that current Government policies present a bleak future to all these Chambers. So long as the members of these Chambers have patience the stronger ones will survive, (with decreasing effectiveness) and the weaker ones will fail or be dissolved. Since Government, indeed successive Governments, developed the present policies, two Chambers of Commerce have already been dissolved. I refer to the British-Canadian Trade Association and the British-American Chamber of Commerce in Chicago. Views on both sides differ as to the precise causes of these failures, but they have occurred during the currency of present policies.
§ What are these destructive policies? Actually, they all sound rather good, especially for the United Kingdom taxpayer. It is all to do with the cutting of costs and removing dependence on Government funds so that each of these Chambers and, indeed, so that each of these NOTOs, as they are called—Non-Official Trade Organisations—will be self-sufficient and will stand on their own feet. My argument is that, however attractive this proposition may be, it is unworkable, it is wrong and it is against the interests of British trade and of the British people.
§ The basis of this policy is that British-American Chambers of Commerce are commercial entities which ought to be able to achieve profits, or at least should be supported by commerce and not by Government. Although many, of experience and influence, in Government and in advisory positions in industry support this view, I do not believe it to be sound. My reasons are as follows. The Chambers themselves are not profit-making and are not acting in a commercial capacity, however much their members may in their business activities be acting in profitable commercial enterprises. It is true that there are certain services which could produce a fee, but these are mainly performed by the Consuls without a fee or with a nominal fee—and I know, as a lawyer, how little note is taken of my advice when I do not charge a fee. In any event, as presently constituted, these Chambers do not have the resources for these purposes. Secondly, there is a limit to the support which commerce is 688 also prepared to give. Remember, members of British-American Chambers of Commerce are both British and American. Indeed, in passing, it was the American members of the Chicago Chamber who took umbrage and caused its dissolution.
§ Looking at the limits to the support that commerce can give, I would remind your Lordships that however big a company is, or however large are the profit and loss accounts, the officers of that company abroad have to work upon a budget. Those companies, too, as well as paying the annual subscription to the Chambers, support functions, sometimes with very large sums of money.
§ Most important of all, companies, by releasing their executives in order to undertake Chamber duties, lose executive time. In New York five or six years ago, it was calculated that between 200,000 dollars and 300,000 dollars-worth of executive time for officers and members of the committee was taken up from the companies by the Chamber. In Los Angeles, not the President but an officer of the Chamber—and this is a recent calculation—reckons that he contributes in executive time, and very willingly, 40,000 dollars per annum. Also, companies provide disbursements and other support in this form.
§ The third reason why I believe these policies to be wrong is that the beneficiaries of good Chamber activities are not the existing Chamber members, of established companies, but the new or potential members of small companies who are out in the United States of America either investigating or beginning to set up a business. The other great beneficiary— again not members of the Chamber—is British trade itself. Look, for example, at the highly effective efforts made by the New York British-American Chamber of Commerce at that critical stage when we were trying to persuade the American Government and people to accept Concorde. I refer to the evidence given by an American member of the Chamber, Mr. Frederick Glass, to Mr. William Coleman, the United States Secretary of Transport, at the critical public hearing on 5th January, 1976.
§ To give another example from the New York Chamber, recently a Customs Procedural Reform Act was proposed. The 689 Chamber set up a drafting committee and also lobbied members of Congress, and was able to note when the Bill was eventually signed by the President that sections from its draft had actually been incorporated in a Statute of the United States of America. I could give you two examples from Los Angeles and San Francisco, but let me just give you two from Los Angeles. Recently the Chamber there introduced a United Kingdom company to the Metropolitan Water District in Los Angeles. The result was a sale of 35 million dollars-worth of British manufacturing and generating equipment. Another introduction by this Chamber of a local Los Angeles food importer to a United Kingdom company resulted in frozen food exports to the Los Angeles company from the United Kingdom at no less a rate than 590,000 dollars a month.
§ Another beneficiary which is not the Chamber itself is the provision of a good public platform for innumerable senior United Kingdom officers of Government and industry. One only has to look at the list of speakers who have been invited to both of these Chambers to find a list of prominent members of this Government, and indeed one or two prominent members of the Opposition, as well as industrialists.
§ The fourth and final reason why I suggest that this policy is wrong is very simple; it is failing. It is failing in its endeavour to make the Chambers self-operating and self-sufficient. The Chambers do not like to go begging to the Government, any more than apparently the Government like them to do so. It is good for neither side. The Chambers, I believe, are looking for a partnership in which the essential ingredient is that Government make their contribution to these Chambers for the benefits which they are providing to British trade and hence to the British people. It does not seem to me an unfair proposition.
§ I have not come to chastise the Government, certainly not with the noble Baroness Lady Stedman, holding the Government brief. But I have come to persuade, and I have come to persuade the Government to a practical and sensible route out of these present difficulties. I am not the first to suggest it. The Government, instead of giving ad hoc payments or pay- 690 ments of one sort or another to free a Chamber when it gets into difficulty, should fund the executive director of each of the established Chambers, and fund him at the market rate for the job.
The key to the success or failure of a Chamber lies in the strength and efficiency of the executive officer. Of course, through the Counsul-General, the Government would have the right to approve the selection of the executive director and, equally, the Chamber itself would need an achievement level in the number of members and so on, but the price would not be heavy—the cost for example, of one consular officer—and the gain would be large. Nobody here should doubt the value of these Chambers and—as the noble Earl, Lord Limerick, who is unable to be here tonight, wrote to me—the way in which they harness that unique British asset which is the goodwill and energetic support for British affairs which resides in the foreign business communities. In a poignant way this is how a recent president of the British-American Chamber of Commerce put it:
In spite of the many pressures brought about by our business responsibilities, because we are all vitally interested in expanding the market for British goods and increasing the export, investment and trading potential, we contribute our time, knowledge and talent in Great Britain's interest".
§ Finally, I wish to thank noble Lords who have taken the trouble to remain in the House till this late hour to support me in this debate. I feel a little routed by the deer because I received a number of letters of apology from noble Lords who would otherwise have been here, including one from Lord Redmayne. I thank also those noble Lords who have stayed not only to participate but to listen to the argument.
§ 10.8 p.m.
§ Lord NEWALL
My Lords, we are most grateful to the noble Lord, Lord Hacking, for introducing this Question. Perhaps I should remind the few noble Lords remaining that the United States market has 200 million customers, and that is what we are really talking about tonight—one of the greatest of the world's markets—and there are 50 million people in Great Britain who are able to understand those 200 million without too much 691 trouble. It was George Bernard Shaw who said we are two nations divided by a common language, and that is still true today.
I must declare a past interest as a former member of the New York British-American Chamber of Commerce for a few years. At that time I was working with the late Commander Whitehead, who did so much for some very effervescent exports to the United States and elsewhere. I can safely say that the Americans were "Schwepped" off their feet by his efforts. During that time the company I was then with had very close associations with all the Consuls and Consuls-General around the country, but we were quite big and successful and we had a good British image, so they liked us. But what about all the small companies who were just starting up and wanted help? When we think of the United States we must remember that we are dealing with a Continent, not just a country; it is 3,000 miles from one side to the other, as far as from London to New York. There are many large markets in between the two coasts of America and there are few companies that could even consider tackling the whole market at once. The country has to be broken into sections and each section approached independently.
I think that this is obviously appreciated by the Government, as there are Consuls and Consuls-General in no less than 15 cities in the United States. I think that they do a great job, even if they, like other people, are probably suffering from some potential cutbacks. We do need diplomatic representation, but more importantly to our balance of payments we need commercial assistance, especially for the smaller companies. I believe that there are two basic ways of helping businessmen abroad. The first is through Government Departments, the British Overseas Trade Board, and through commercial Consuls and various other organisations allied to the Government. The second way is through some form of non-direct Governmental support—but letting them get on with the job.
Perhaps I may take a hypothetical example of a small British businessman who decides for good reasons to interest Americans in his products. He makes some contacts, he picks up his samples, 692 he takes a Freddie Laker plane, thereby incurring minimal costs to his company. However good his contacts are, as everything is relative, he is unlikely to have enough contacts at this very early stage in order to make comparisons as to the efficiency or the ability of his original contacts. So where does he go? He has the Consulate and the various organisations that are provided by the Government; he is very courteously received by a civil servant who probably deals with 523 other products, and gives him a list of possible people to talk to, but taking enormous pains to show no favour towards, or against, any of them. Undoubtedly, that is very helpful, but it is a rather cold, unapproachable way.
His alternative to this is to go to the British-American Chamber of Commerce where undoubtedly he will be warmly welcomed, probably told of several people to see, with a recommendation and a description, and various other attributes will be described. People will be telephoned, introductions will be made, and, as likely as not, the businessman will be asked to have a drink with some of these other people in order to meet them socially and very informally. I know which method is more likely to produce the most business. Where else could the new businessman meet the head of United States Customs, or American bankers and insurance chiefs, and many leaders in commerce and industry altogether under one roof?
The British-American Chambers entertain a great many people from a wide selection of places: Her Majesty's Ambassador, editors, such as those of the Economist, or Time magazine, the chairman of Pepsico, Mrs. Thatcher, Mr. Ivor Richard, the United Kingdom Permanent Representative at the United Nations, and a great many others who are in the world public eye and who are very important also in the business world.
What else do British-American Chambers do? They offer platforms for distinguished speakers: Ministers, diplomats, industrialists, and even members of the Royal Family. They organise small business meetings, luncheons for visiting Government and union officials, and senior businessmen. They hold regular seminars of specialist groups of members. They offer members the opportunity to 693 meet regularly to exchange and express their views and increase their business. They have highly qualified standing committees which are readily available to advise and assist the members. They receive many inquiries from firms and bodies which they deal with. They provide a comprehensive reference library with directories of all kinds. They represent their Chamber membership and the British interest generally by appearing before the House and the Senate committees regularly, which a Government cannot do.
I support these Chambers of Commerce very much. I suppose that I am slightly biased, but I admit that I regret that they cannot really exist without some help. I know how much they achieve in real terms. After all, what they achieve, they achieve in the market. They are not outside the market. They do something that no Government organisation can get involved in very often, and they are the obvious people to whom to go for help. That is their main role. No Government official can lobby Congress in Washington. The British-American Chambers can do this, and do do it; and they need to do it. It is a normal procedure in American business, and it is quite common. To lose this asset would be a major loss.
So what does it really cost? Is it going to break the Government to give money to British-American Chambers of Commerce? New York got nothing this year; San Francisco got about 7,000 dollars last year, or £3,500, and that is going to ! be halved this year; and Los Angeles got about the same paltry amount. These Chambers, covering the enormous mileage which they do, need merely a good director, as the noble Lord, Lord Hacking, suggested, and a minimal staff for the paperwork. What very paltry sums are being curtailed? Perhaps the noble Baroness, Lady Stedman, would care to tell me what assistance is given to other countries—maybe Japan, Iran in better times, Middle East countries and even Australia. There may be some money which is given, maybe it is not; but it is perhaps important to know what is given. I have not been able to find out; it is supposedly privileged information.
But, my Lords, whatever are the arguments in justification of the Government's
694 action in reducing to nil the support for the British-American Chambers, these small sums of money do have a value far above the actual cost. There is an enormous reservoir of goodwill which cannot be measured in purely financial terms, and we do not want to lose it. Even now, at this stage, the British community in America has a smaller and reduced identity compared with any other European nation despite our language similarities, and this is based mostly on the fact that all other European nations have much larger Government support than we have. It is very necessary for the Government to have full consultation with the business interests involved before cutting back further on this very small but valuable aid to British-American trade. And the trade goes both ways, my Lords.
Perhaps the Government could discuss the situation more fully with the British Overseas Trade Advisory Committee, who are extremely knowledgeable on this subject. Let us at least ensure the continuation of these Chambers of Commerce somehow. They are efficient in many ways —some, I agree, more than others. They perform a very necessary function, and they assist companies in a thousand and one different ways; they are nearly always unsung and unpraised, and always behind the scenes, helping to boost trade both ways. I would suggest that the Government should support them with Government speakers; this, I am afraid, they are becoming rather shy of doing at the moment.
Let us keep the Chambers in existence for as long as possible. Their cost can be estimated from a Telex I received from the San Francisco British Chamber just the other day. They said that the cost of operating a Chamber was about 30,000 dollars. They have asked for only 10,000 dollars themselves, in fact—not a lot of money—and the 30,000 dollars which they actually find it costs them is less than the salary, allowances, transportation costs, children's education and all those other things that a low-ranked United Kingdom-based diplomatic officer receives. And who does the better job? Of course, a British Chamber can do far more than a single person.
Perhaps I may be allowed to quote from Mr. Eric Varley, who wrote in one of the British-American Chamber magazines: 695The British-American Chamber of Commerce does much to bring the opportunities for investment in Britain to the attention of American industrialists. I hope it will continue this work and encourage more US companies to make what I am certain will be a mutually profitable investment in our future".So I would urge the Government to give an undertaking to have further talks with the people who are involved; to remember that the sums we are talking about are very small; and to bear in mind that, from a commercial point of view, in no way can a Government organisation fulfil this task—a task undertaken with great skill by the British-American Chambers in America.
§ 10.19 p.m.
§ Lord LLOYD of KILGERRAN
My Lords, may I add my thanks to the noble Lord, Lord Hacking, for having raised this important question of aid to the British-American Chambers of Commerce. My task at this late hour is simply this: to urge the Government to take careful heed of the submissions of the noble Lord, Lord Hacking, coupled as they have been with the speech of the noble Lord, Lord Newall, who has had practical experience of the operations of the Chambers of Commerce in America. In the course of my professional experience, acquired chiefly with science-based industries internationally, there has been a great change in the relationship between British companies and American companies during the last decade. It used to be said that it was very difficult for small British firms to make any money in the American market. But now the position has entirely changed. More and more smaller firms—and by "smaller" I mean firms with under 500 employees—are going into the American market; but sometimes they have not got the expertise and knowledge to deal with the difficulties that appear in the various environments in which they are endeavouring to trade.
It seems to me to be incumbent upon the Government to consider that at this time it is essential to maximise the effect of our trade operations by the investment of comparatively small sums of money in America. I should like to pay high tribute to the Embassies and the trade commissions in America for the great work they do. The assistance that they have given to British traders during the past decade 696 has been invaluable. I am sure that they will accept what I am about to say: that they have the difficulty in their operations that they are not in the trade. These British-American Chambers of Commerce act as quasi-diplomatic institutions. They are associated with the trade; their presidents are usually distinguished people in some trade or another; and, therefore, the operations of these quasi-institutional bodies, the Chambers of Commerce to which I have referred, are complementary to the work of the Embassies and the trade organisations. Therefore, I would submit that were the Government to invest (if that is the right word) in these Chambers of Commerce in America at the moment, that would give them a very good return. I strongly support what has been said by the noble Lord, Lord Hacking, in urging the Government to assist these Chambers of Commerce in their valuable contribution to British trade.
§ 10.22 p.m.
§ Lord GLENKINGLAS
My Lords, it is in some ways rather sad that this debate, which is of very considerable importance, should have come at this time of night. I am grateful to my noble friend Lord Hacking for having raised it and I am only sad that a number of people who would have been able to speak with great authority on this subject have been prevented from being present by the lateness of the hour and the difficulty of knowing exactly when the debate would start. My noble friend Lord Redmayne, like me, was informed firmly yesterday by what is known as the "normal channels" that the debate would take place between 6 o'clock and 8 o'clock. I rushed back from a hospital in Winchester to be here in time. He had to leave just after 8 o'clock as he had another appointment. This is the way, as your Lordships know, that affairs are often conducted. It is a pity because my noble friend Lord Redmayne was until very recently chairman of the North American Advisory Group of the British Overseas Trade Board and he has had a great deal of experience of dealing with American business affairs in the most practical manner possible. He asked me whether I would indicate that had he been able to be here tonight he would have been a witness to the very strong support of both industrial and commercial firms in 697 this country by the British-American Chambers of Commerce and, for that matter, by the British-Canadian Trade Association also.
My Lords, as you know, I was at one time, for my sins, President of the Board of Trade, an office which, sadly, has disappeared into a much less important Secretary of Stateship. At that time, I had a certain amount to do with these types of operation. During the time that I was Secretary of State, the British Overseas Trade Board came into being to replace the BNEC which had existed up to that moment. I suppose to some extent I have to admit parenthood of this child—if one can admit parenthood when, so far as I know, no woman was obviously involved.
All I can say, having watched the progress of the British Overseas Trade Board since that date, is that I have to admit that I am ashamed of the child for which I was at least partly responsible. The reason for that is that when it was born, or when it was procreated in my day, it was expected to have complete control over the money it was assigned, and the chairman of that organisation was supposed to argue with the Treasury as to what amount of money it should have. Neither of these things has happened. No chairman has argued with the Treasury about the amount of money that is needed for the very important operation of promoting British exports, and no chairman has had control over the money that he has been allocated. The Treasury have, since the day the Board was created, argued in detail about whether or not they should spend any given amount of money.
My noble friend Lord Newall indicated —and I am sure that the noble Baroness in her reply will tell us whether or not he was right—that the amount of money which has been suggested for the two American Chambers of Commerce in Los Angeles and San Francisco is of the order of 14,000 dollars a year. £7,000 my Lords! A good deal less than half the salary of a very low grade civil servant in this country. And how many civil servants are the British Overseas Trade Board employing? The picture is really totally deplorable when one thinks that British-American trade is not just a very important part of our balance of payments, 698 but America are easily the biggest trading partners that we have at the moment.
If we expect—and I think we should— that the British-American councils in Los Angeles, San Francisco and New York are going to do an important job of work for our traders who go over there, we have to do two things: we have to give them stability; we must not say to them: "You may have 6,000 dollars one year and 2,000 dollars another year". My noble friend suggested that we should pay the salary of their chief executive officer. If that is to be effective—and I do not disagree with that as an idea—I reckon we are talking—and I am out of touch now by three or four years with costs in America—in terms something nearer 100,000 dollars for each Chamber. I still would not think that was money irresponsibly spent.
I happen to have travelled most of the world and have talked with a large number of Consuls, High Commissions and Embassies. As one moves around the world, there are two problems which continually come upon one's mind if one happens, as I did, to have had some experience of business as well as being a politician. First—and my noble friend mentioned it—is if one is dealing with an official Government body, they are unable to give any preference or favour between one, two or three firms who may be all competing for business at the same time. It is often perfectly clear to the Embassies or High Commissioners concerned that only one, or possibly two, of the firms concerned have the slightest chance whatever of completing the task at the right price on time. But they are obviously not allowed to say so. This is not so with a Chamber of Commerce, because they can introduce them to the right people and say: "We know these people, and they can do the job". So that is a very great advantage, and officials clearly have extreme difficulty in finding a way round.
Secondly, in the old days when I was a good deal younger, Consuls and Consuls-General in most of the important places in the world were local people who had lived there for 40 or 50 years and knew everything that happened in the area. Today our Consuls and Consuls-General are lucky if they are left in a place for three or four years, and they are very lucky if they have any knowledge whatever of what 699 really goes on behind the scenes, and if they have made a few friends before being moved somewhere else. This, to my mind, is a very important distinction between the Chambers of Commerce which are continuing and our Consuls and Consuls-General who, for perfectly good reasons, cannot do that.
The last thing, or the last but one thing I want to say, is this: If the Government seriously believe, and if the British Overseas Trade Board seriously believe, that they want the Americans to believe that we regard British-American trade to be important, then for the British Overseas Trade Board to deny the sort of sums that are being asked for—14, 20, 30, 40: the noble Baroness will no doubt tell us—if they believe we are saying, "No" to these sort of numbers, why should any American businessman think that the British Government care one hoot about British-American trade? Those of us who have been involved in trade for a great many years know how important it is; and it is high time that the Government and the British Overseas Trade Board showed that they know how important it is by not being so totally petty over what are, in effect, very tiny sums of money.
§ 10.32 p.m.
§ Lord GARNER
My Lords, because of the lateness of the hour I rise with some diffidence, but I assure you that I shall be brief because I have no recent detailed knowledge of this problem and any knowledge that I have is confined to Canada rather than the United States. But I do want to lend my strong support to the general thesis advanced by my noble friend Lord Hacking.
Years ago, it was said that Ambassadors used to refuse to have any contact with commerce. Thank Heavens! those days are past. Today, I like to think that the Diplomatic Service is highly skilled, of high quality and does a superb job in a number of ways. It is certainly excellent in general economic intelligence and other things of that kind. The noble Lord, Lord Glenkinglas, has just made the point that continuity is a major factor in maintaining contacts in business relations. This is lacking in the Service as it is today, and I often think that perhaps too much emphasis is put on the diplomats and not 700 enough emphasis is laid upon business interests.
When I first joined the Service and served in Canada, the Trade Commissioner Service was entirely distinct from diplomacy. One of the best and wisest of our Trade Commissioners, then based in Montreal, which was far from the diplomatic establishment (and he thought that was right) was told during the war years that he would have to move to Ottawa and possibly have to share a building with the High Commission. He was absolutely emphatic that if he was required to do that it was essential that he had a back-door which bore no relationship to the High Commission, so that his business friends could go in and not be tarred with the diplomatic brush. That, no doubt, is a totally out-of-date philosophy, but it represents a substantial point which is of relevance to the general matter that we are discussing this evening.
In my time as High Commissioner in Ottawa, we had the fullest co-operation with a whole variety of bodies, some of which have now passed on. There were the Dollar Export Council, the Canadian and British Manufacturers' Association, the trade centres, and so on, and I can say from very definite experience that, however bad a job I did, I could not possibly have begun to do it on the business side without powerful assistance from all those commercial organisations.
I therefore want to lend my very strong support to the general thesis that, at a time when our exports are so vital, we cannot afford to neglect any opportunity of increasing them, and that we should look to the business interests both in the countries concerned and at home to support our case.
§ Lord RANKEILLOUR
My Lords, is it too outlandish to ask that the Government consider abolishing or at least reducing the commercial Consuls and aides in America which my noble friend Lord Newall said are not very useful to potential British salesmen and ploughing the money saved into the more efficient Chambers of Commerce? This would at least help to refine the extra cash problem.
§ 10.37 p.m.
§ Baroness STEDMAN
My Lords, I feel somewhat like the Consul of the 701 noble Lord, Lord Glenkinglas, who has not been around very long and who has not made many friends tonight. But I have listened to the debate tonight with very great interest, and I should like at the outset to assure noble Lords that the Department of Trade and the British Overseas Trade Board, which directs its export promotion programme, value very highly the contribution which British Chambers of Commerce overseas made to the promotion of United Kingdom exports. There are very close working relationships between overseas Chambers and Her Majesty's diplomatic posts, and the links are constantly being strengthened.
Without having rather more notice than I have had tonight, I should not like to make any reply to the noble Lord, Lord Rankeillour, as to whether we should dispose of the consular trading posts and plough the money into the American Chambers of Commerce. Responsibility for providing export services now, at home and overseas, rests, however, on the official machine of government, which, through the Department of Trade and Her Majesty's diplomatic posts overseas, provides a comprehensive range of services which is very well used and is appreciated by industry.
The Government recognise that overseas Chambers may wish to offer their members and others services either similar or additional to those offered by posts. In these circumstances, we believe it is right that independent bodies such as Chambers should be prepared to finance them through membership subscriptions and charges. Chambers of Commerce and similar bodies overseas should, therefore, in the Government's view be able to sustain their activities independent of official support, and many of the 43 known to be in existence have throughout been able to do so.
The British Overseas Trade Board is prepared to examine sympathetically requests from overseas trade organisations, either on a pump-priming basis when first setting up. or during periods of temporary financial difficulty or to fund special and approved projects. Assistance is normally given if the Board has confidence in the organisation's ability to achieve financial independence or a return to viability. Assistance is not, of course, given towards the cost of 702 activities which duplicate work done by the official services. The Government's policy towards Chambers has been generously and flexibly interpreted, and provides financial assistance to overseas Chambers on an exceptional and a short-term basis. But your Lordships will also recognise the need to maintain a firm but fair attitude to requests for Government money. I accept and recognise the importance of trade with the USA, as with other countries, but the Government consider that this is a sensible approach to the question of assisting overseas trade organisations, and it is consistent with the policy which we have adopted towards trade associations in this country.
§ Lord GLENKINGLAS
My Lords, I am very grateful to the noble Baroness for giving way. I do not expect her to answer my question tonight, but perhaps she could find out the answer and let me have it later. Would the noble Baroness consider what other countries, which have perhaps an even less important connection, are spending on their equivalent operations? What worries me desperately is that we expect the Americans and the British over there to pay for the whole thing. No other country does; they are all subsidised by their home Governments.
§ Baroness STEDMAN
My Lords, I am grateful to the noble Lord. As he will understand, I cannot give him exact figures tonight. However, I will check up on them and then write to the noble Lord to let him know what the position is, so far as we know. Since the inception of the British Overseas Trade Board in 1972, from time to time it has given very generous help to 20 overseas organisations. In the current financial year, so far we have indicated grants in support of eight, including the British-American Chambers of Commerce in Los Angeles and San Francisco. Both of these Chambers have been in receipt of generous assistance from Her Majesty's Government since the early 1960s, but in accordance wih the Government's policy, the British Overseas Trade Board, since its inception in 1972, has asked these Chambers to make determined efforts to achieve self-sufficiency as soon as possible, and we have given them a very generous period in which to achieve this.
The New York Chamber, which received assistance up to 1976, is to be commended 703 on achieving financial independence, and we understand that there is a very strong disposition among its directors to maintain that position. The Chamber is gaining in membership, and it seems to be becoming a very lively and effective body. The Chambers in Los Angeles and San Francisco are similarly demonstrating a determination to continue their activities and are trying to do so without continuing assistance from Her Majesty's Government. Los Angeles and San Francisco have been established long enough now to be able to decide whether they are or are not viable organisations. We shall help any Chamber through a bad patch if it is clear that in the long run they will be able to stand on their own feet. Our objective is to help a body to meet the occasional temporary need, up to a limited sum, if that body looks as though it has an effective life ahead.
I cannot go all the way with the noble Lord, Lord Hacking, but I can give him an assurance that we would help and that we shall help, as we did in Iran, if business suddenly grows and if local business and commercial interests want to form a Chamber. We would help if there were sudden financial difficulties for a short period and if help was needed to adjust to new circumstances. The British Overseas Trade Board has worked, and continues to work, very closely with us on our present policy, and it supports and endorses our attitude. I was asked certain questions about finance and the kind of assistance that we have given. From 1972 to 1977, the New York Chamber was in receipt of £111,034. Since 1977, they have been able to stand on their own feet. Los Angeles, from 1972 until, we estimate, 1979, will have received £58,579. San Francisco will have——
§ Lord HACKING
My Lords, I apologise for interrupting the noble Baroness, but I should be most grateful if she could break down those figures. There were certain special circumstances which called for certain special payments. The concern, as I presented it and as the noble Baroness will remember, is that it is annual support.
§ Baroness STEDMAN
Yes, my Lords, I accept that there is concern. On the question of the New York Chamber of 704 Commerce, for example, there was the sum of £40,219 in 1975–76, which included a grant of about £37,500 in respect of a loss which they had incurred on a lease. These figures have been broken down over the years, and they are now, in accordance with our policy, a decreasing figure each year. However, over the pericd from 1972 until the end of the year 1978–79, we shall have given to these three Chambers the sum of £218,094. As I have said, we are still willing to help them out over temporary difficulties, but we feel that they have now been going long enough and they ought to be viable and ought to be able in normal circumstances to stand on their own feet.
I am grateful, as I am sure other noble Lords are—and I regret that there are not more in the House—to the noble Lord, Lord Hacking, for giving us the opportunity to air this subject. It has been an important debate and we have had the opportunity of sharing his undoubted expertise in this field. I envy him his intimate knowledge of the Chambers and how they work. For my part I will certainly bring to the notice of my right honourable friend the Secretary of State what has been said in this House tonight, so that he is aware of the views of the Members of this House who are closely associated with the British-American Chambers of Commerce. But I must ask your Lordships to accept that the British-American Chambers of Commerce have received substantial financial support from Her Majesty's Government over a very long period of years, and now accept that the continuation of their services depends on the willingness of their members and United Kingdom companies and other trade organisations to contribute adequately to their finances.
The boards of directors have accepted this and we are told that they are anxious to ensure that they can continue without further subsidy. I hope that all noble Lords will—as I am sure they will—use their influence to encourage exporters in this country to give full support to the British Chambers overseas, but it is not the policy of the Government to hand out the annual grants or to pay for the cost of the Directors-General of any of these organisations. Government policy is that there must be a decrease in grant over the years and that the Chambers should be made to be viable and to stand on their 705 own feet. If business and commerce demand these services, then business and commerce will have to pay for them.
§ Lord HACKING
My Lords, just before the noble Baroness sits down I should like to ask a second indulgence. Before she came to the Chamber today she was not able to know the detailed argument that I was going to present to her, or indeed any of the arguments of my noble friends. It would be of great assistance to me—and I speak only on behalf of myself—if the noble Baroness could write to me and answer the particular points that I raised, and particularly the point, for reasons that I urged upon your Lordships, that these Chambers of Commerce, in their operations in the United States of America in their special assistance of British trade, are not commercial units and can never, in all sensible terms, be so considered and be judged thus, in the way in which Her Majesty's Government erroneously continues to judge them.
§ Baroness STEDMAN
My Lords, I did say that I would bring all the views on this matter to the notice of my right honourable friend the Secretary of State, and I will certainly undertake to write to the noble Lord on the points that he has raised and to other noble Lords who have taken part in the debate, so that they may know the official replies to it.