§ 75. Mr. W. THORNEasked the Chancellor of the Exchequer if he can state what is the rate of profit on shipbuilding and ship repairing, allowing for the price of material and labour; and if he can make any comparison with the profits on similar work before the War?
§ The PARLIAMENTARY SECRETARY to the ADMIRALTY (Dr. Macnamara)I have been asked to answer this question. During the War practically all repairs for the Fleet, so far as they have been executed in private yards, have been carried out under "time and line" contracts. These provide for a payment, over and above cost, of 10 per cent, profit. This represents the profit figure allowed in Admiralty pre-war repair contracts, and, so far as I know, is not in excess of the profit allowed for similar work for the merchant service pre-war. As regards new construction, circumstances compelled us very largely to adopt the "time and line" contract system at the outset of hostilities. Here, again, 10 per cent, on cost was the figure fixed for profit. As time proceeded, however, opportunity offered us to reduce the number of "time and line" contracts for new construction, and for a long time past few, if any, new construction contracts have been on the "time and line" system. Recently we have introduced a system of contract for new construction which may be described as a modified "time and line" contract, in which the profit is limited to a definite sum based on a 10 per cent, basis of the estimated cost. As regards the whole matter, I may refer my hon. Friend to the evidence which I gave before the Public Accounts Committee on the 4th May, 1916, which he will find set forth in Parliamentary Paper No. 115, at pages 144 onwards. Further evidence has been given this year by Admiralty officials. That evidence and the Report of the Committee thereon will be available for Members later in the Session.