§ 66. Mr. HOGGEasked the Minister of Munitions whether Messrs. M'Alpine secured an advantageous contract for the erection of the hutments in Cleveland because a member of the firm is a relative to a Cabinet Minister; and whether he is in a position to make any statement on the subject?
§ Mr. KELLAWAYThe huts at Cleveland were erected by Messrs. MacAlpine on a basis of profit on cost. The total cost of the huts was £75,000 and the gross fee paid to the firm by the Government for their work in connection with the contract was £2,600. But the whole of this sum was subject to Excess Profit, Income Tax and Super-tax, the net benefit to the firm for managing the work being less than £300. As to the suggestion that the placing of this contract was influenced by some relationship between a member of the firm and a member of the Government, I have ascertained that no member 814 of the firm was even acquainted with the Cabinet Minister in question, or with any member of his family at the time the contract was made, under which the Ministry exercised this option to have the huts erected.
§ Mr. ROCHIs it usual for the Minister of Munitions to make contracts on the basis of profit on the cost price?
§ Mr. KELLAWAYNo, it is not usual; but there are exceptional circumstances in which it is justifiable.
§ Mr. KELLAWAYNot in the exceptional circumstances.