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There are one or two questions which I want to ask on Clause 3. I was sorry that I could not take part in the Second Reading, when, perhaps, I should have asked the questions, but I understand that it will be in order to do so now.
Clause 3 increases from £800 million to £1,300 million the amount which can the loaned under the Clause, and, later—
I beg to move, That the Bill be now read the Third time.
I shall not delay the House in any way, but perhaps I may have the opportunity to answer some of the questions which I was asked on Second Reading, in so far as I am able to do so after so short a time. Secondly, I hope that I can give my hon. Friend the Member for Louth (Sir C. Osborne) an opportunity to rephrase his remarks, so that he can intervene in the debate. I say at once that if for what I know are good reasons he is unable to do so, I hope that he will not hesitate to raise any question he likes privately with me on some other more convenient occasion.
The purpose of the Bill is to assist in the promotion of British exports. As the House knows, it is necessary to increase the limits available to E.C.G.D. because of the possibility that the current limits, authorised in 1959 and 1961,will shortly be reached, certainly during this year. The figures which I gave to the House on Second Reading illustrate the immediate need for this legislation and I will not rehearse them.
The House will recall that the limits have been successively increased since the passage of the Export Guarantees Act, 1949, on four occasions—in 1952, 1957, 1959 and 1961. In one sense, therefore, the Bill is a routine matter, as the right hon. Member for Battersea, North (Mr. Jay) suggested on Second Reading—in that it is a logical successor to the Acts of earlier years.
An increase in the limits available to E.C.D.G. has become, on the last three
occasions at any rate, a biennial process, again as the right hon. Gentleman suggested. There is one important departure from precedent in this Bill. It seeks Parliamentary sanction for an increase in the limits which, it is estimated on the basis of the calculation which I gave to the House on Second Reading, should remain valid for a period of five years, i.e., until 1969. I should particularly like to comment on this aspect of the Bill.
Last year, as we now know—for only very provisional figures were available during Second Reading—British exports totalled £4,075 million, an all-time record and an increase of some 7 per cent. over 1962. The House will agree that this is a substantial and positive achievment and reflects great credit upon British industry and business—on the designers, the managers, the people who make, the people who invent and, perhaps most of all, on the men who sell.
The hon. Gentleman says a "bit late". I am not clear what his view is about this impressive increase in British exports. I fancy, however, that he shares my great enthusiasm for it.
The calculations reflected in the Bill must be affected by a number of important factors. First, a continued and sustained further expansion of our exports is esssntial—again, I know that I take the hon. Gentleman with me—to the economic well-being of the country. It is the policy of Her Majesty's Government, therefore, to encourage and assist exporters. The work of E.C.G.D. is one practical example of this.
Secondly, prospects for increased world trade, so far as one can estimate them at this stage in 1964, seem in general good. There is no doubt that the opportunities are there for British exporters if our quality and our delivery dates are right—perhaps delivery dates are of specific importance as the home economy moves forward—and not least if our prices are right. We should be able to look with confidence for an increase in the total of British exports in 1964.
Thirdly, E.C.G.D. now insures roughly one quarter of British exports on behalf of 7,000 firms. During 1963, business insured with E.C.G.D. increased by more than 18 per cent. over 1962. If, therefore, as we all so urgently desire, the total of British exports rises so similarly may E.C.G.D.'s participation. If so this must affect the calculation to which I have already referred. The proportion of British exports now insured by E.C.G.D. is twice the proportion insured ten years ago, and is higher than the proportion achieved by any of E.C.G.D.'s competitors overseas. Nevertheless, we certainly do not regard it as the maximum.
There is a fourth point which I should mention. E.C.G.D.'s facilities range widely. We have guarantees covering the whole spectrum of the export trade, from consumer goods to capital goods, from the smallest cut-lengths of cloth to the multi-million-pound steel works. We have special policies for special needs, such as constructional works, and, indeed, invisible exports like royalty payments and consultants' fees. Moreover, we are always prepared to consider special cover for any proposition which needs special treatment.
In other words, the figures written into the Bill must also be continuously affected by the development of E.C.G.D.'s facilities. Indeed, I have already stated in the House my determination as Minister of State at the Board of Trade, with responsibility under the Secretary of State for exports, to pay specific and special attention to the questions of development. Things are moving very fast, and it is most important that we should always be ahead of our competitors.
It is sometimes suggested, however—again bearing on this same point—that E.C.G.D. should be more flexible. From what I have seen of cases which have come to me so far, and these, of course, are usually the exceptions, as the House was good enough to acknowledge on Second Reading, E.C.G.D.'s approach is, in fact, very flexible. Every endeavour is made to find a solution, however unorthodox, provided that it does not damage the vital principles upon which the Department's success is based, and about which I spoke a little on Second Reading.
Difficulties have sometimes arisen because exporters have carried nego- tiations too far and therefore committed themselves before coming along to E.C.G.D. to find out just how far, and on what condition, the Department can go. They have then expected E.C.G.D. to break important points of principle in order to get them out of trouble. I repeat that these are only a minority of cases, but they represent a matter which gives me a little anxiety because in these cases the people concerned are asking not so much for flexibility as for a root and branch change in proven policy which would suit their immediate interests.
Most exporters come along at an early date to find out what room they have for manœuvre. The point that I wish to make is that it is always possible for exporters, or people who are thinking of going into the export field, or wish in any circumstances to talk to E.C.G.D. to do so informally and at a very early stage, and I hope that will become increasingly possible and increasingly taken advantage of.
If it becomes necessary to turn to Parliament to seek a further increase in the limits before the expiration of the five-year period, this will be a matter for rejoicing in E.C.G.D., and, I am sure, also by the House. If the proportion of exports insured by E.C.G.D. continues to rise, and if British exports show the growth which the National Economic Development Council has recommended as the foundation stone for economic growth at home, then it is likely that fresh arrangements will require to be made.
E.C.G.D. is managed on sound commercial lines. As a business we are dependent, obviously, upon the good will of our client. I can assure the House that we are always eager to consider any constructive suggestions. Indeed, E.C.G.D. is, the House may think, forward looking in having staff specifically engaged in discussions with commercial organisations and individual exporters to inform themselves about the changing conditions in the export trade to which I referred earlier.
The aim—perhaps the House will think it is the right aim—is to be in a position to develop the Department's facilities to cater fully for these changing needs. It is unquestionably a fact that these facilities have now been brought to an impressive pitch. I would certainly be the last to suggest that improvements are not possible. British exporters will always have maximum support from E.C.G.D. We are determined that they should not be at any disadvantage in the credit and credit insurance fields. We shall certainly vigorously continue our efforts for Government help for exporters and, in particular, to maintain the lead which, we are sure, E.C.G.D. has.
I think that these general remarks have some bearing on the specific points about which I was asked during Second Reading. I said in that debate, and I am pleased to have an opportunity to repeat it, that it is certainly our wish in the Board of Trade and particularly through E.C.G.D. always to be ready to listen, not least to hon. and right hon. Gentlemen in this House. I hope that they will never hesitate to bring either to the Secretary of State's or to my own personal attention any particular cases or ideas. In that debate, a number of very useful and interesting points was made. I am hoping to let right hon. and hon. Gentlemen have specific replies during the course of next week on any cases which are still outstanding.
But one item that I should like to mention particularly is this. It is a matter of great general interest and importance. Several hon. Members were rightly concerned about the extremely important order for Trident aircraft for Japan. In particular, they wondered whether our credit facilities were good enough. I have made careful inquiries during the past week, and I have every reason to believe that our credit terms were fully competitive. One matter about which I am satisfied is that the Trident is undoubtedly one of the finest aircraft flying in the world today.
As the hon. Gentleman has mentioned the Trident and there are other markets in which we hope to sell it, are the producers of the aircraft as satisfied as the Government are that our credit terms are competitive?
I am happy to reassure the right hon. Gentleman completely on that. I was satisfied of that, not only on the Department's advice on this matter, much as I value it. The right hon.
Gentleman will be glad to know that in general the firm concerned is in agreement with what I have said.
On the other hand, I think that the right hon. Gentleman has raised a point of anxiety for the future, and if this is of interest to him, I give him a categorical assurance that I shall continue to watch this matter, and if ways are open to me to promote and assist in the sale of this aircraft, I propose to take them. In that regard there is one matter that I have under examination.
If Parliament decides that the Bill should reach the Statute Book, it will be providing the facilities for further growth in British exports. For our part, we must, and we will, do our best to see that these facilities are used to the maximum extent. The House may think that the Bill is, in fact, a vital instrument by which a further advance can be made possible.
Mr. Deputy-Speaker, I am sorry that I made a foolish error during the Committee stage of the Bill, and I am grateful to you for the chance of making one or two observations which I should like to have made then.
Clause 1 says that the guarantees under the Bill have a two-fold purpose. First, to encourage trade, and, secondly, to render economic assistance to countries outside the United Kingdom. It is on the latter that I wish to ask a few questions. Is my hon. Friend satisfied that an increase: from a maximum of £800 million to £1,300 million is big enough or good enough? Will it meet the needs that are so obvious at the present time? Will it even begin to scratch the surface of the problem that faces us when we talk about giving economic assistance?
During the Second Reading debate on 15th January, 1964, at column 318 my hon. Friend said that the future scale of aid that we could give under this Clause depended on two factors First, Britain's capacity to give the this, and, secondly, on the Government's policy as to where the aid should go. I think that there is a much more important third factor, namely, the willingness of the nation to make adequate and bigger sacrifices to provide this aid. I do not think that the amount which the Clause allows to be provided is anything like adequate, and the amount that will be required to deal with the problem will never be obtained until the country realises the vast problem which faces us.
During the Second Reading debate my hon. Friend gave India as an example of what had been done and said that she would benefit further under the new proposals. If my hon. Friend looks at column 362, he will see that he said, rather boastfully, that over the last 15 years India had received 16 loans under the various Acts. Those 16 loans totalled £193 million. He went on to say that with the extra money available India would get bigger and better loans.
We must be realistic about this. That figure shows that we were merely playing with the problem. A loan of £193 million in 15 years represents, on average, £13 million per annum. If we assume that there are 400 million people in India, and if we assume that the whole loan went in economic aid and not in straight business loans, that represents 7½d. per year to the 400 million inhabitants. I suggest to my hon. Friend and to the Government that much more help than that is necessary if we are to meet our obligations to the people living in under-developed countries.
Perhaps I might give the House five sets of figures which make me believe that the increase from £800 million to £1,300 million is inadequate. First, about two months ago it was said by the Leader of the Opposition in the Indian Parliament that 270 million people in India were living on 3½d. a day. The Prime Minister said that that was wrong, and that the figure was 1s. 3d. Whatever figure one takes, it shows that the standard of living is scandalously low, and for this nation to say that it is doing its duty by the Indians by giving them 7½d. per head per year is fantastically absurd. If we are to carry out our moral obligations to the less favoured nations, we must provide much more aid than that, and £1,300 million is nothing like enough.
Secondly, it was stated in the Economist some time ago that India had a totally unemployed population of 8 million, and 18 million people who are chronically under-employed, all of whom were crying out for help, yet in the last 15 years we boast that we have given them 7½d. per year to help them.
Thirdly,—and this is what alarms me still more—it is estimated that the population of India will increase by 116 million by 1971. If that be so, and if the amount of aid that we have given in the past is continued in the future, we shall give them less than 6d. per head per year. I think that the nation must look at this problem afresh and consider what is required of us.
I have not completed my speech.
The fourth figure is the United Nations' estimate that apart from the most distressed sections of the vast Indian population, the average income per capita is about £25 a year. In this country it is £400 a year. For us to give them 7½d. per year and think that we have done our duty is humbug and hypocrisy.
If we are to get the nation to agree to provide vastly greater sums to render economic assistance by this method—and I hope that I shall not be ruled out of order, because I consider this to be vitally important—our people will have to be made to realise that if the wages paid in this country and those paid in India were averaged out, the figure would be less than £2 a week, yet we have men who are on strike at Port Talbot who say that £25 a week is insufficient. We have to get our people to appreciate that aspect of the matter, and I am saying to my hon. Friend that what counts is not merely the capacity to help, but the willingness to do so.
I therefore ask my hon. Friend to go back to the Cabinet and to plead for much greater assistance to be given to the under-developed countries under this scheme.
I am sorry if I have trespassed upon the rules of order, Mr. Deputy-Speaker. I am saying that an increase from £800 million to £1,300 million does not begin to scratch the surface of the problem. I am setting out the problem to show why my statement is true.
In the Second Reading debate my hon. Friend took pride and pleasure in referring to the fact that over a period of 15 years we had given India 16 loans valued altogether at £193 million. I say that this is only playing with the problem and that the proposed increase is nothing like adequate. Since you feel that I am transgressing, I shall say no more, except that it is the realisation of the enormity of the problem that faces us and the inadequacy of what we are doing that horrifies me, together with the fact that the nation as a whole feels that, somehow, by leaving the problem to organisations such as Oxfam we are salving our consciences, while not being prepared to do what is required of us.
I support the Bill, because it goes a little way towards what is needed, but it is nothing like adequate.
I support what my hon. Friend the Member for Louth (Sir C. Osborne) has said on the general issue. I wish to raise the question of the administrative strategy of this kind of Bill. The first mention of this kind of Measure was in 1949, and we have had amending Acts in 1952, 1957, 1959, and 1961 which, I suspect, mainly altered the amounts of money made available for this purpose. My hon. Friend talked about the inadequacy of the sum of £1,300 million, which is the new figure, and my hon. Friend the Minister of State, before the Bill has left the House, has prognosticated the possibility that within a few years he may have to introduce yet another Bill to increase the amount.
This House is far from being unbusy. It is far from having no legislation before it, especially in these days. In those circumstances, I wonder whether it is beyond the ingenuity of the Treasury to find a better way of dealing with the matter. I do not profess to be a mathematician, or an economic strategist, but I should like to know whether it would not be possible to devise a sliding scale, based on a percentage formula, and perhaps with the £1,500 million as the starting figure, so that in every year, according to the number of requests received, taken together with our trading figures—mainly exports—a percentage could be added to the basic £1,500 million, so giving the Board of Trade a new top line from which to work.
I advocate that for two reasons. First, to the world at large it would show that we have faith in our ever-growing volume of exports. Here I should mention that my hon. Friend was careful to point out that this sum is supposed to last for five years. I should like to see the introduction of a sliding scale, which would mean that there was no ceiling—
I bow to your Ruling, Mr. Deputy-Speaker, and turn to my second point.
The fact that we have arrived at a figure of £1,500 million for the next five years shows that there must have been a certain amount of thinking at least on the part of the two responsible Departments. My hon. Friend the Minister of State has been honest in saying that he is not certain that this sum will be adequate for five years. I believe that this is the longest period that such a Bill has been designed to cover. For all the reasons that I have given I think that we should cease to lay down a detailed figure to cover a certain period of years. There are precedents in other Bills for arriving at percentage figures. If the rules of this House prohibit that, we can surely amend them. This would be for the betterment and convenience of all. We ought to depart from the practice of naming a definite sum, and find a flexible formula.
I support the Bill. I am grateful to my hon. Friend for the clarity with which he has explained it, and also for the fact that he has laid down a fixed figure. This is highly desirable. I appreciate the sincerity of my hon. Friend the Member for Louth (Sir C. Osborne), who spoke with great feeling. Sincerity is a great tribute to a man's faith and to his heart, but not necessarily to his head. I do not say this offensively. We must remember that when we urge the Government to provide vast sums of money—and these are vast sums, by any standard—we must not be surprised if the Government relate their ability to provide them to the economic position of the country.
This is not the money of the Minister, nor even the money of my hon. Friend the Member for Louth; this is money which the Government have not got, and will have to get from the taxpayers' pockets. Therefore, they must have some regard not only to the warm feelings which my hon. Friend has mentioned but also to their ability to foot the Bill. It must be remembered that not all these countries are newly emerging territories. Some have been emerging for some time, and sooner or later they will have to learn from the advanced countries that they must develop an ability to increase their own strength and to maintain themselves and their expanding populations.
To place the responsibility for the growing problems of some of these countries entirely upon the shoulders of Her Majesty's Government, and to say that we should have a sort of sliding scale, without paying any regard to the progress made in these countries themselves, seems to me to be quite unsupportable. I am grateful to my hon. Friend for explaining the extent to which this country is prepared to foot the bill in respect to the many demands which are put forward by various countries all over the world, and I am sure that the arguments which he has put forward are entirely sound ones.
I wish to congratulate my hon. Friend the Minister of State on the lengths to which he has been able to go in giving sustenance and assistance to India and developing countries. My hon. Friend the Member for Louth (Sir C. Osborne) would be the first to complain—not on his own behalf, but on behalf of all the citizens of this country—if he realised that any extra help, more than is proposed in the terms of this Measure, would mean extra tax burdens on the people of this country, and he would not have made such a moving appeal as I admit he did make this afternoon.
My hon. Friend the Member for Louth made one reference which affected me. It was to the charitable organisations to which the Government frequently appeal for assistance for emergent and under-developed countries to an extent which I feel is sometimes not quite fair. My hon. Friend referred to Oxfam, with which I am closely connected. I would also mention the Freedom from Hunger Campaign and the Help the Children Campaign. It would seem almost as though the Government rely on these charitable organisations to fill up any gaps which may exist in the amount of assistance which the Government are prepared to give.
We cannot dig more than a certain depth into the pockets of the people and today the charitable organisations give an enormous amount of help to emergent countries. If the Government felt at any time disposed to go further than they are prepared to go at present it would help the charitable organisations who would feel they were being encouraged, instead of being lectured about any further help that they should give.
With your permission, Mr. Deputy-Speaker, and that of the House, I wish to do my best to reply to points which have been made during the debate.
My hon. Friend the Member for Louth (Sir C. Osborne) has a substantial business experience which we all greatly respect and I thought that he was going to pillory me about some detail of E.C.G.D. operations in the financial or commercial field, so I listened to his opening remarks with trepidation. Little did I think that the debate would develop in such a way that we should be talking about aid, a subject which, to some extent at any rate, is a little removed from the major purpose of the Bill.
Several distinct classes of business fall under Section 2 of the 1949 Act. Financial guarantees are one of the most important and, as my hon. Friend so correctly said, economic assistance loans are another. But the point I should make clearly to him, and at once, is that such aid as is given, and which falls for the purpose of financial calculation under Section 2 of that Act, is only a part of the whole of the United Kingdom's massive aid effort. In fact, at present it is only a quarter.
If my hon. Friend wishes me to attack him on the purely economic side, I warn him that next time I will do so. If he says that the economic aid provided in this Bill is a quarter of that which we provide, it means that the aid amounts to 7½d., multiplied four times—2s. 6d. a year which we provide to aid the people of India.
I think, Mr. Deputy-Speaker, that you would become very cross with me were I to pursue this point too far, because to give my hon. Friend the kind of answer to which I think he is entitled I should have to trespass far beyond the rules of order.
My hon. Friend's calculation may be correct. I do not have his razor-like mathematical brain, and I should prefer to go away and check it; and that I will do. I am not certain that one of the figures which he quoted earlier was right. But I will write to him on the subject.
I am saying that the aid channelled through Section 2 of the 1949 legislation is a quarter of our total aid effort. Whether that total is adequate is an entirely different subject which I should be happy to debate with my hon. Friend at any time. It is correct that during the Second Reading debate I said that there are limits on what we can afford. I must not go into details, but I will refer to the White Paper on Aid to Developing Countries, which was produced a little while ago, and indicate three things to my hon. Friend.
On page 11 of the White Paper there is a table which shows that British overseas aid has doubled during the period from 1951–52 to 1962–63. That is not too bad for poor old Britain, which has so many enormous burdens to bear. It states, in paragraph 22, that
Our ability to maintain, and perhaps increase, the size of our aid programme depends on the soundness of our domestic economy.
My hon. Friend will be as delighted as I am that our economy is doing so well at present as to result in the amount of aid given in the 1962–63 period being an all-time record.
Government expenditure overseas, which is quoted in paragraph 24 of the White Paper,
is currently running at nearly £500 million a year.
That is an enormous figure. If one takes into account private investment at about £300 million—I hope that my hon. Friends will not disparage what the private sector ought and can do—one can appreciate that there is a substantial charge upon our balance of payments. My hon. Friend suggested that I had boasted about our aid to India. I do so because I think that Britain is doing just about as much as she can afford to do. I agree that we should like to do more, and so we shall, if we keep the economy moving and our balance of payments correct.
On the other hand, we must be realistic about cur resources. I admired very much the way in which my hon. Friend spoke from his heart and I have considerable sympathy with what he said. But there are limits and it is important to recognise that our Section 3 effort is such a small part of what we do, important though it is.
My hon. Friend the Member for Bedfordshire, South (Mr. Cole) discussed the method by which calculations are made. He discussed the whole circumstances of E.C.G.D. although, as you pointed out, Mr. Deputy-Speaker, that is not included in the Bill. I was interested in what my hon. Friend had to say. Any constructive suggestion for improving the position will be given the strictest attention.
My hon. Friend the Member for Southend, East (Sir S. McAdden), whose contributions to our debates we have all enjoyed over so many years, beginning at Tower Hill and now in the House of Commons—I think that he and I have something in common there, although he seemed to get away with his speeches and I am not sure that I did—took a different view on the important point about parliamentary control of expenditure, which is a most important matter. It became clear, during the Second Reading debate, that the House welcomed an opportunity to discuss export matters at regular intervals—
I note that I carry the hon. Member for Ashton-under-Lyne (Mr. Rhodes) with me.
My hon. Friend the Member for Ayr (Sir T. Moore) said some wise words on this topic, to which we listened with great interest. Many of us know of the work which my hon. Friend has done for Oxfam and other institutions and we are glad to have the opportunity to pay public tribute to him for that. Also in connection with aid, we shall, next week be discussing the International Development Association Bill, as part of the business to be dealt with in what the Leader of the Opposition has called a "dull week". But none the less it is useful business. So, whether it is aid under Section 3 of the 1949 Act, or private investment, all these things are extraordinarily important; and most important of all is that Parliament should have the opportunity to talk about them at reasonable and regular intervals.
There was no suggestion in my remarks that there should be any lack of Parliamentary expenditure. But the amount would have to be sanctioned each year in one way or another and there would be an opportunity for discussion. I was trying to help my hon. Friend by suggesting that there should not be the paraphernalia of a Bill—which would have to go through both Houses of Parliament, and take time—every two or three years.
I am most grateful to my hon. Friend. I quite understand that point, and note what he says. If I sat down in a couple of minutes, and nothing else untoward occurred, we should have been very quick in this House. Perhaps that is a model for other occasions and other legislation. Reading the Bill, and seeing how much of it is printed in italics, I venture to think that another place may be similarly quick, but it is not for me to comment on that.
I said that there were certain aspects of financial control of E.C.G.D. on which an investigation has been authorised. One can, perhaps, find places where one can improve and investigate further. I quote this because I want my hon. Friends to know that the suggestions made, whether we act on them or not, will certainly be taken seriously.
I again thank all four of my hon. Friends for their contributions to the debate. I was interested to find that they did not all agree all the time, but if they had done that might have been a pity. I am sure that this is a useful Bill and I am grateful that it has been given so warm a welcome.