§ "That a Supplementary sum, not exceeding £1,270,000 be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March 1904, for Expenditure in respect of the following Navy Services, viz:—
| £ | |
| Section I. Personnel | 53,200 |
| Section III. Contract Work | 1,254,800 |
| £1,308,000 | |
| Section II. Matériel:— Deduct Appropriations in Aid | 38,000 |
| £1,720,000 |
§ MR. RUNCIMAN (Dewsbury)complained of the manner in which repairs were underestimated, and also of the huge sums spent on repairing comparitively new vessels. In two years the amount spent upon repairs had increased from £175,000 to something just under £1,000,000. This was due, no doubt, to the fact that repairs were now given out to private dockyards and also to the fact that the policy of the Admiralty had gone a great deal ahead of their original intention. He wished to refer to two or three instances of inaccurate estimating—a practice which showed itself in the Votes year after year. He would take three large vessels. In the case of the "Trafalgar" £46,000 was put down for repairs but the actual amount spent was £60,000. In the case of the "Minerva" the estimate was £32,000 and the cost £45,000; and the "Nile" repairs were estimated at £18,900, hut the actual cost was £47,000. In careful estimating it was necessary that some margin should be allowed, and it would have been much wiser to have intimated to the House at the time that more money might have to be asked for to carry out necessary repairs. He should like to direct attention to four cases of a serious character. The "Circe," which was only ten years old, cost £65,000, and the repairs undertaken on behalf of the Admiralty two years ago actually cost £52,000. In the case of the "Leda," also ten years old, the original cost was £62,000, and her repairs under one undertaking, not accumulated, was £52,000. The "Halcyon," eight years old, cost £75,000, and her repairs amounted to £55,000. The "Jason," ton years old, cost £50,000, and the amount spent on her repairs was £52,000. Surely it would have been much cheaper for the Admiralty to have built new vessels, having the advantage of new designs, rather than to go on tinkering up old ships at a cost which would have provided new ones. He did not wish to labour his criticism of the system adopted by the Admiralty of repairing vessels at the net cost plus a percentage, but he must point out that certainly, in the cases which he had instanced, either the system was seriously at fault or else the Admiralty officials had not known what 434 they were undertaking when they placed the vessels for repairs in private dockyards. He believed there were many other cases similar to those he had mentioned.
§ COLONEL DENNY (Kilmarnock Burghs)said that in the case of the vessels referred to by the hon. Member opposite, the repairs included new boilers and machinery, and, although he was not justifying the action of the Admiralty, he thought it right to point out that as the result of the alterations the speed of the vessels had been considerably increased in each case, and possibly the boats were much better now than they were when originally built. He was quite certain that the owners of the private dockyards who had undertaken the repairs were the last persons to shrink from inquiry into the accounts. Speaking as a member of the profession he desired to say that, although he was always against the spending of money on old articles because he thought that very often it was a pure waste of money, he still thought that when the Admiralty in their wisdom determined on the spending of a certain amount of money on vessels so that they might be ready quicker than new vessels, the system adopted was the best we could have.
§ MR. GEORGE BROWN (Edinburgh, Central)called attention to the Report of the Accountant-General, which had been issued since this matter was last before the House. He dealt with the Navy Appropriation for 1902–3, and pointed out that the system of contracting for repairs was attended with considerable disadvantages. The Accountant-General mentioned that in the first place experiments in tins direction had been tried and had proved costly as compared with estimate work. A case was mentioned in which the cost was no less than double what it would have been under the ordinary estimate system, and the Accountant-General went on to show that the different yards had different methods of accounting. It, was therefore, an exceedingly difficult thing to calculate the amount which should be allowed for general expenses, and it was impossible to secure uniformity in all the yards. 435 The proportional charge for general expenses varied very greatly accordingly to the amount of extra Government work which there might be in any yard at any given time. He thought the variation in these percentages would astonish the House. The Accountant-General said that they varied in the case of cruisers from 19 to 40 per cent., and he mentioned one case where the percentage added was actually 65.7. His object in drawing the attention of the Admiralty to these points was simply to ask what was being done to remedy these difficulties. Had they arrived at some standard of percentage as to the method on which the general expenses should be calculated so as to secure uniformity among the different yards? The contractors in some cases made claims against the Admiralty for their proportion of expenses on what was known as finished works; that was to say, some of the machinery was bought from a sub-contractor at a contract price, and then the chief contractor made a claim against the Admiralty for general expenses calculated over this finished work. He wished to know whether a settlement had been arrived at in reference to that, and whether the Admiralty refused to acknowledge such claims at the present time. In the last debate on this subject a word was dropped from the Treasury Bench which led him to ask whether the cost of repairs in His Majesty's dockyards had been compared with the cost of corresponding work done in private yards, and, if so, whether a little information on that point could be given to the House. It seemed to him that a great many hon. Members would be glad to know that besides getting additional speed, the work was being done on economical and businesslike lines.
§ SIR FORTESCUE FLANNERY (Yorkshire, Shipley)said the hon. Member for Dewsbury had called attention to the fact that the cost of repairs on some individual ships in private dockyards amounted to about as much as the original cost. He did not suppose that the hon. Gentleman suggested that the present system was bad and that he would prefer the work should be transferred to the Royal dockyards. Everyone who had studied the question 436 would admit that it was better to leave the Royal dockyards, available, for new construction and to have the repairs done in private yards. As to the system of paying for repairs by the cost of labour and material plus a percentage, he ventured to say that the hon. Member for Dewsbury would almost invariably have his own ships repaired on that system rather than by getting an estimate for repairs beforehand, for the simple reason that it was impossible to estimate the cost of repairs, whether the ships belonged to the Admiralty or the mercantile marine.
§ MR. RUNCIMANsaid he did not know what the hon. Member's reference to him had to do with the Admiralty. He wished to inform the hon. Member that his firm worked on the contract system.
§ SIR FORTESCUE FLANNERYsaid the hon. Member for the Kilmarnock Burghs had answered the hon. Member's complaint as to the cost of repairs by explaining the nature of the work done. It was sometimes better to carry out extensive repairs on an existing vessel than to set to work to build a new one which might have more modern features. So long as the Admiralty pursued the policy of having repairs done in private dockyards and paying on the ascertainment of the actual cost, so long would the House support them, notwithstanding the criticism of the hon. Gentleman opposite.
§ THE SECRETARY TO THE ADMIRALTY (Mr. PRETYMAN,) Suffolk, Woodbridgesaid the hon. Member for the Central Division of Edinburgh was under a misapprehension as to the relative cost of the work done in the private yards and the Royal dockyards.
§ MR. GEORGE BROWNsaid that he had read the Auditor-General's Report, in which that official contrasted the system of taking estimates in the ordinary way with that of getting repairs done on the cost of labour and materials; and stated, taking the accounts for 1902–3, that the latter system worked out very expensively. In particular, the Auditor-General gave a case where the cost of gun-mountings on the system of labour and material was double that 437 of similar work done on ordinary estimates.
§ MR. PRETYMANsaid there wore reasons why that ease could not be considered a test ease. With regard to the present system there was no reason to say that the actual cost of work done in private yards was materially greater than the cost of that done in the dockyards. Some confusion existed with regard to this matter, because the great divergencies that had been referred to wore not between the cost of contract and dockyard work, but between the estimate and the actual cost. It was perfectly evident that the estimates of the work framed in the dockyards before the ship was opened out could not be based on accurate information as to the work actually required—especially in regard to machinery and boilers. It had happened frequently that the cost of work done on machinery and boilers in private yards had been exceeded, but that did not mean that if the work had been done in the dockyards it would have cost any less. He agreed that it was desirable to make an accurate comparison of the cost of the work done in the dockyards and in private yards, and the Admiralty were now doing that, but he was sorry he could not now give the actual figures. However, an estimate was being made with regard to some of these large refits, now that the work was actually done and the full extent of it was known, as to what this work would have cost if done in the dockyards instead of in the private yards. As to the percentages, the variation to which attention had been drawn was really a fictitious one. It depended almost entirely on whether certain material parts of the expenditure on the ship were charged to the basis of the percentage or to the percentage itself. This was an entirely new experiment; and, being new, they were unable to lay down hard and fast rules to suit all cases; therefore they could not fix a certain percentage which would cover all cases. But as a matter of fact, if the different methods of calculating the percentage were taken into consideration, it generally came to 10 per cent. on material and 40 per cent. on labour or thereabouts. Another misconception was that this work had been given to 438 the private yards in order to get particular work done more quickly. He did not admit that the work could be done more cheaply, or better, or more quickly in private yards than in the dockyards. But there was a very large amount of arrears of repair work which the dockyards could not undertake, occupied as they were with new construction as well as repairs; and these contracts were given to private yards simply because it was necessary to extend the area over which the work could be done. The hon. Member opposite had referred to the large increase in the Vote for repairs. That was because the Admiralty were working off arrears. But it was not a permanent state of things. As a matter of fact, only four ships were to be sent to private yards in the coming year; and the hon. Member would see that that expenditure was to be reduced in the coming year. The hon. Member referred to the torpedo gunboats, and pointed out that on some of these boats which had cost £65,000 when new, £50,000 had been spent in repairs. The particular duty of these gunboats was to accompany the torpedo flotilla, and it was necessary that they should have the same high speed as the torpedo flotilla. As the time had come when these torpedo gunboats had not the necessary speed, the alternative was either to build new boats or to put into the existing ones new machinery and boilers. It was suggested that new torpedo gunboats could have been built more cheaply than these were refitted. But that was not the fact. The Admiralty had now obtained what they wanted—twenty knot gunboats—and they had cost less than if they had built new ones.
§ MR. WHITLEYsaid that the explanation of the hon. Gentleman was satisfactory so far as it went; but it did raise a rather alarming question that when the Committee voted £1,000,000 or £1,500,000 to build a battleship it was found that within ten years that ship was out of date, or that they had to expend large sums of money upon it. He thought it was possible on this Vote to raise a matter which was of great interest at the present time—he meant the subject of submarines.
§ MR. PRETYMANsaid that there was nothing on this Vote for submarines.
§ MR. WHITLEYthought that the Vote covered the item for men, and shipbuilding, and the contracts for repairs and alterations. He would be surprised if the Item did not cover the Vote for the staff engaged in directing the submarines; and after the lamentable accident that had occurred the other day he thought it would be useful and desirable if the Secretary to the Admiralty could give some information to the Committee as to what steps were being taken to prevent the recurrence of such a lamentable accident. He hoped that the hon. Gentleman would give some assurance of that kind; and if he did so, it would relieve a great deal of anxiety.
§ SIR JOHN COLOMBsaid he would point out to the hon. Gentleman that there was nothing to say in regard to that sad disaster. It was purely a lamentable accident; and it was unnecessary to raise it on the Motion before the House.