§ 38. Sir J. LONSDALEasked the Parliamentary Secretary to the Ministry of Munitions if any contracts made by his Department for the supply of bleached cotton waste are arranged upon the basis of a profit on cost; if he is aware that the adoption of this system has resulted in an abnormal increase in the market price of the raw material and that, whilst the Government have to pay enhanced prices for their supplies and contractors who supply waste on the basis of a fixed price are unfairly handicapped, loss is occasioned to the entire cotton industry; and if he will take steps to terminate the system of contracting on a profit on cost basis?
§ Dr. ADDISONThere is no contract for cotton waste of the kind indicated by the hon Member wherein the amount of profit increases with the cost. The contract to which he may refer provides for a fixed profit per ton of waste supplied.
§ Sir J. LONSDALEDoes the right hon. Gentleman suggest that there is no contract under the terms of which cotton waste is acquired upon the basis of a commission on cost?
§ Dr. ADDISONThat is so. There is no contract of the nature referred to by 509 the hon. Member. The contracts referred to gives a definite profit; it does not take into account the cost of production. The profit does not vary with the cost.