SUPPLY—NAVY SUPPLEMENTARY ESTIMATES, 1889–90. (Hansard, 17 March 1890)

§ *(5.48.) MR. ROBERT W. DUFF (Banffshire)
I wish to ask the First Lord of the Admiralty what course he intends to pursue—whether we are to have a discussion on Vote 1, and a discussion on the Supplementary Estimates?

§ LORD G. HAMILTON
I think it we aid be for the convenience of the Committee if we had a general discussion on Vote 1. I thought it would be more convenient if the Supplementary Estimates were discussed as usual.

§ * MR. DUFF
A discussion of the Supplementary Estimates will not be precluded?

§ * LORD G. HAMILTON
No.

§ (5.49.) MR. HANBURY (Preston)
Sir, I have one or two general remarks to make on this Estimate, which it is very clear was made by the Admiralty at the last moment. We have the statement issued by the First Lord in regard to the Estimates for the coming year, and it is clear that at that time the Department had no idea whatever that this specific Estimate would have to be presented. He begins his statement by saying that the expenditure for the coming year would exceed the Estimate for last year by £110,000. Well, if he knew at that time that a £350,000 Supplementary Estimate was to be asked for, clearly that was not accurate. Therefore, it is clear that it came to the knowledge even of the First Lord so late as the first week in March, that this extra amount would have to be asked for this Ordnance Vote. That points to one or two conclusions in my mind. In the first place it shows pretty clearly that the way in which the Admiralty give these orders to the Ordnance factories is not very satisfactory. It shows that the Admiralty does not at the beginning of the year make a definite statement of what guns it requires. It trusts merely to chance, and takes what the War Office, which has control of this Vote, may give it. Only at the last moment is it found that the War Office is able to find guns and ammunition to the extent of £350,000 more than anticipated. That is not a satisfactory way of doing business as between the Admiralty and the War Office. Another thing is this—and it is what ought to be complained of—it shows that the Admiralty knows nothing of how its guns are to be supplied; it simply has to take from time to time what the War Office may give it. It is a point to which the Treasury have called attention, and I did hope that by this time, at any rate, they would have got things on a more satisfactory footing. There has been a very 1030 curious correspondence between the Admiralty and the Treasury; and the Secretary to the Admiralty, writing on the 18th May, 1889, said there was great distrust of the figures respecting the expenditure by the War Office, of which no account had yet been received. Have they had any account now of this money for which they are asking the Supplementary Estimate? They are asking for this extra money in March, 1890; and yet last year, even in May, they did not know what had been the expenditure by the War Office, or how it was to be accounted for, up till March of the preceding year. The Treasury says the Admiralty ought to insist on having every information from the War Office, mouth after month, week after week, of how the Navy is being supplied by the Ordnance factories. The Treasury says the Ordnance factories stand in the same relation to the Admiralty as ordinary contractors, and there should be no difficulty in obtaining the requisite information as to the progress of the work being done. The Admiralty ought to treat the War Office and the Ordnance factories exactly as it would any private contractor, and ascertain exactly whether its orders are being supplied or are not. The wording of the Supplementary Estimate is rather peculiar. It says the War Office "expects" that during the year they will exceed the Estimate. When is it expected? Only three weeks before the end of the year. Surely the War Office ought to be able to say exactly bow much they can supply the Admiralty. Although it only "expects" to exceed the Estimates, yet the amount of the Supplementary Estimate, £350,000, is almost a fourth of the original Estimate. It is a very loose way of doing business, and we have some right to ask how the War Office and the Admiralty really do carry on the public business. Again, are the Admiralty satisfied that they are going to get value for this £350,000 during the current year? We do not think they got it last year. These March payments are always very suspicious, and they always are larger than the payments for the preceding quarters of the year. A great deal more work is turned out that more money may be claimed in the last quarter than in the three previous quarters. Last year, for instance, the charge for work done in the first three quarters was 1031 £213,000; and during the last quarter it was £103,000. What is the Admiralty actually to receive in return for this £350,000? What guarantee is there that this ordnance will actually be supplied during the current financial year? I have some doubts whether this is not really to meet another difficulty. The Ordnance Factories' Vote is entirely distinct, I understand, from the Army Estimates. Inasmuch as the Ordnance Factory Vote has not been proposed, they have, of course, to got money to carry on the Ordnance Factories. I am afraid that this £350,000 is not actually being taken to pay for matériel supplied to the Admiralty, but that it is, practically, a sort of Vote on Account to carry on the Ordnance Factories during a portion of the coming year. If that be so, we ought to have it told us very distinctly. I am sure that just as confusion arose in the past so it will arise in the future if the Admiralty and the War Office are allowed to muddle up their accounts in this way. I should like to have an explanation of the very large increase under the heading "Small Arms and Miscellaneous." I find that the Supplementary Vote is almost as large as the original Vote. I should like a little more information on that point. Another question I wish to ask is whether out of the special fund set aside for ordnance, the contractors have supplied sufficient guns and matériel for the amount taken out of the fund? I want to know whether it is the fact that the special fund is being starved in order that this additional amount may be found. I have no further remarks to make upon this point. I am simply trying to get these accounts between the War Office and the Admiralty placed on a more business-like footing than they occupy at present, and in trying to do that I am sure I have the support of the Treasury.

§ *(5.59.) LORD G. HAMILTON
Sir, my hon. Friend is quite right in calling attention to the large amount of the Supplementary Estimate, and in asking for additional information. When we took over the Vote for naval ordnance from, the War Office two years ago we were informed that at the commencement of the financial year we would be responsible for all the liabilities as to naval ordnance. 1032 We had to commence with half a million of liabilities more than we anticipated. I watched the expenditure closely, feeling it to be of primary importance that the ships should not be kept waiting for guns or ammunition. Little by little, as the year went on, the prospect of requiring a Supplementary Estimate diminished until ultimately there was an actual surrender of £100,000. So that, in addition to the half million of liabilities we had taken over from the preceding year, we had another liability of £100,000, on account of the surrender in a subsequent year. In framing my Estimate, I had great difficulties to face. Some of the contractors have only recently increased their plant, and cannot say how it will work, consequently they are unable to give anything like a reliable forecast as to the amount of their output. And in the second place, their business is peculiarly liable to strikes. There have been during the past two years a number of strikes. We have a large order with the Maxim Nordenfelt Company, but owing to the difficulties they have had with their workmen, they are very much behind hand with the contract. We have not all the information to hand with regard to these matters that we could desire, but there has been a marked improvement this year over last year, and I hope that after further consultation with the War Office, and, if necessary, by the appointment of a Committee to go into these questions, we shall get upon a more satisfactory footing. The nation in one sense is better off, owing to the arrangements which have been made, because we have saved the interest on the £600,000 to which I have referred, and are only now called upon to pay for ordnance, which, if the contractors had only been up to time, we should have had to pay for some months ago. The hon. Member (Mr. Hanbury) asked if we should get value for our money this year. Well, we only pay on receiving certificates that the goods have been, passed, and we are informed that there is no doubt whatever that the contractors will earn the whole of the £350,000 before the close of the present financial year. I have shown that this large Supplementary Estimate is caused by the surrender of two years' back, and if the Committee will consider that the 1033 two Departments had to undertake a large, difficult, and complicated business it will admit that we have succeeded better than could have been anticipated; and though we shall have to face difficulties from time to time until the contractors have mastered the processes of manufacture, I am sure we have broken the backbone of our difficulties. I believe that in the future we shall have reliable information, and shall not be obliged to ask the House for a large Supplementary Estimate.

§ (6.8.) MR. HANBURY
The noble Lord has spoken a great deal about contractors, but they were not so much in my mind's eye as the Ordnance Factory itself. We want to have a check upon the officials there. We want to know distinctly what chock the Admiralty has on the work of the Ordnance Factory, so as to know that it is being done—and done up to date.

§ * LORD G. HAMILTON
Last year a special Naval officer was appointed to inspect, on behalf of the Admiralty, the materials supplied by the Ordnance Department. In that way, independently of the information the War Office gives, we have reliable information of everything the Ordnance Factory has in hand.

§ (6.10.) SIR W. PLOWDEN (Wolverhampton, W.)
With regard to the question just put—as to our getting full value for the money laid out—I wish to say that I have been reading the Report of the Comptroller and Auditor General, and I find it there stated that a large claim was made by the War Office for guns and warlike stores, and was not supported by any certificate from the Commissary General. Possibly a change may have been made in the method of arranging these things since the accounts were presented, but the Comptroller and Auditor General certainly draws attention here to the fact that payment should be made on production of certificate. A letter was addressed by him to the Admiralty on the 19th December, 1889, but no reply was received.

§ THE SECRETARY TO THE ADMIRALTY (Mr. FORWOOD,) Lancashire, Ormskirk
The course of practice between the War Office and the Admiralty in reference to payments for work done by the War Office for the Admiralty is that the Admiralty are satisfied with a cer- 1034 tificate that the work has been done, and it is not the province or the duty of the Admiralty to examine the books of the War Office. That is done by the Comptroller and Auditor General in duo course. We have no option but to take the certificate from those responsible that they have received the goods or expended the money on account of the Admiralty.

§ SIR W. PLOWDEN
Perhaps I have not made myself sufficiently clear. I can understand that these certificates are required; but in the case I have referred to, the statement of the Comptroller and Auditor General is that no certificate was given.

§ MR. HANBURY
When the hon. Gentleman talks about the War Office being a responsible Department, and its word being taken without a certificate, is it to be understood that that is to be the definite policy in the future? The Treasury have laid it down as their opinion that the War Office and the Ordnance Department should be treated like private contractors, and should have their accounts scrutinised as carefully. Is the Admiralty in its dealings with the War Office going to treat the War Office as a privileged Department, whose accounts ire not to be looked into as thoroughly as those of private contractors?

§ * LORD G. HAMILTON
We pay on certificates which are given by officers of the War Office as in the case of other contractors. We require to see the certificates relating to work in the Ordnance Factory as we do certificates from other contractors. That seems to mo the only possible course to take. As my hon. Friend (Mr. Forwood) has pointed out we do not inspect or audit the accounts. That is done by the Comptroller and Auditor General.

*(6.15.) MR. CAMPBELL BANNERMAN&c) (Stirling,
Are the War Office certificates given by the officers of the Ordnance Department, or by the Inspector's Department in the War Office?

§ THE SECRETARY OF STATE FOR WAR (Mr. E. STANHOPE,) Lincolnshire, Horncastle
By those who pass the goods.

§ * MR. DUFF
I have not heard an answer given to the hon. Member for Wolverhampton, who has referred to a ease where money was paid for guns 1035 without a certificate. It will be found on page 168 of the Appropriation Account, £10,000 was paid before the contract was entered into. That seems to me a bad principle, and it is one which the Public Accounts' Committee has frequently reported against. According to the Report of the Comptroller and Auditor General, no one seems to know what has become of this £10,000. It is in dispute between Messrs. Armstrong and the Admiralty at the present moment, I believe. We ought to have some understanding from the War Office or the Admiralty that before money is advanced in this way the contract shall be signed, and that money will not be advanced except on the certificate of a responsible officer.

§ MR. FORWOOD
There are special circumstances connected with this £10,000 which I think I can explain to the satisfaction of hon. Members. An arrangement was entered into with Messrs. Armstrong to construct certain 4.7 guns. At the time the arrangement was made the 4.7 guns were a new weapon just introduced into the service, and the precise form it would take before it was completed could not be determined at the time. It could only be determined by experience, and, therefore, the final specification was not drawn up at the time. Meanwhile, Messrs. Armstrong were entitled to advances when they had in their works steel or material equal to a larger amount than the amount advanced. The £10,000 was advanced on account of material in the hands of Messrs. Armstrong.