HC Deb 23 June 1936 vol 313 cc1592-3
54. Mr. SANDYS

asked the Minister for the Co-ordination of Defence whether the Government intend asking for powers to secure priority for their essential armament orders

The MINISTER for the CO-ORDINATION of DEFENCE (Sir Thomas Inskip)

The policy laid down in the White Paper is that the defence programme is to be carried out without impeding the course of normal trade. Accordingly the question raised by my hon. Friend does not at present arise.

Mr. SANDYS

Does the right hon. Gentleman recognise that a state of emergency exists, and that the speediest restoration of our defensive position should override all other considerations?

Sir T. INSKIP

I do not know in what sense my hon. Friend uses the word "emergency." Certain action of an emergency character has been taken.

Mr. SANDYS

Is my right hon. Friend aware that the Chancellor of the Exchequer informed us that we already felt the heat of the flame?

55. Mr. EMMOTT

asked the Minister for the Co-ordination of Defence on what basis and by what machinery the calculation of fair profits on Government armament contracts is made?

Sir T. INSKIP

Fair profits cannot be determined by the application of any single criterion. As indicated in the reply given by my right hon. Friend the Chancellor of the Exchequer on 12th March last to the hon. Member for Shoreditch (Mr. Thurtle), it is necessary to have regard to the circumstances of each case and to deal with it on its merits taking into account such factors for example as the extent of orders and a reasonable return on the capital assets directly employed. As regards the second part of the question, the machinery adopted necessarily varies according to the type of contract. The underlying principle is that, where effective competitive tender is not available, Departments obtain such information as to production costs as will enable a fair price to be determined. This information is normally obtained by such methods as examination of the contrac- tors' books by the Departments' accountants, or by the preparation of technical estimates of cost. On all such questions as this, the Admiralty has the assistance of their Contract Advisory Committee and the Air Ministry of the committee presided over by Sir Hardman Lever, and the establishment of a similar committee is being considered by the War Office.

Mr. ALEXANDER

Will the right hon. Gentleman lay a statement before the House as to the margin of gross and net profits respectively which will be allowed.

Sir T. INSKIP

If the right hon. Gentleman will explain to me privately what he wants, I shall be very glad to see if I can give any further information as to the methods to be adopted.

Mr. ALEXANDER

To the House?

Sir T. INSKIP

In such a form as is most accessible to hon. Members.

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