HC Deb 28 June 1920 vol 131 cc33-4
41. Mr. DOYLE

asked the Prime Minister whether, in cases where contractors to Government Departments were compelled to grant increases of wages to their workers by Statutory Rules and Orders made subsequently to the date or dates when the contracts were entered into, by the Minister of Munitions acting in pursuance of the Munitions of War Acts, the amount of the increased manufacturing charges resulting therefrom is allowed and paid by the Government to the contractors in addition to the contract price, and, if not, what allowance, if any, is made; and whether, in regard to claims for such allowances, increases of wages paid in conformity with such Orders are regarded as in the same category as increases of wages granted as a result of agreements between representatives of employers and representatives of workers?

Mr. HOPE

I have been asked to answer this, and as the answer is somewhat long and complicated, perhaps the hon. Member will allow me to circulate it in the OFFICIAL REPORT.

The following is the answer referred to:

So far as the first part of the question is concerned, pre-Armistice contracts placed by the Ministry of Munitions fall into the following three classes:

(1) Those containing a provision that when wages are varied by direct Government action during the course of the contract, price shall be raised accordingly.

In this case addition to the contract price is allowed, upon application, as regards amounts necessarily paid on account of Statutory Rules and Orders.

(2) Those containing a provision that the contractor takes the risk of any rise in wages.

No allowance is made in these contracts.

(3) Those containing neither of these provisions.

In this class it is the practice to grant ex gratia on application such additional sums (not exceeding the amounts necessarily paid by the contractor in pursuance of Statutory Rules and Orders) as shall allow a contractor a reasonable profit provided the contract has been satisfactorily performed.

The answer to the last part of the question is generally in the negative, but the matter is one that depends upon the terms of the particular contract.