HC Deb 21 April 1937 vol 322 cc1746-7
65. Sir Arnold Gridley

asked the Secretary of State for War whether, in their offer to manufacture shells on a no-profit no-loss basis, Messrs. Ransome and Rapier asked for nothing, in their required reasonable contribution to charges, by way of rent, interest, or dividend for the use of their share and debenture holders' capital, or what rate per cent. was asked for, if included; whether costs were to include the whole expenditure on new buildings; and whether the company have had any experience in the manufacture of shells?

The Financial Secretary to the War Office (Sir Victor Warrender)

The actual tender received from this firm was on the basis of receiving a reasonable profit, but, in correspondence, the firm had stated that their intention was to make no profit and incur no loss. No building was mentioned in the tender dated 12th October but the firm had intimated that a new building would be required, and in an interview on 20th October, the managing director explained that he intended to set aside any profit towards the cost of this building, which would be the property of the firm, though held available for the Government in an emergency. The War Office was to provide plant at a total cost of over £30,000. This company had experience of the manufacture of shells during the War, but not, of course, of the new type of shell now required.

As hon. Members are aware, it was arranged, in the course of the Debate on 24th March last, that my right hon. Friend the Minister for the Co-ordination of Defence and the right hon. Gentleman the Member for the Western Division of Stirling and Clackmannan (Mr. Johnston) should inspect the War Office records dealing with this case. The result of their examination is contained in a letter written by the Minister to the right hon. Gentleman, copies of which I am having placed in the Library.

Sir Arthur Salter

Could we be informed whether, apart from the details of this particular case, the Government would encourage and welcome offers on a no-profit no-loss basis where they are likely to be economically advantageous to the Government?

Sir V. Warrender

Yes, Sir, where they are likely to be economically advantageous to the Government, but it does not necessarily follow that a tender on a no-profit no-loss basis is more economical than others.

Mr. Noel-Baker

Is not the price quoted by this firm, 17s. 11d., approximately 4s. per shell less than that quoted by other firms, and would it not have given, on an order of 150,000 shells, a £30,000 gain to the Government, which would have paid the cost of the plant?

Sir V. Warrender

If the hon. Gentleman will read the letter which I am having circulated, he will see that, in the opinion of the experts, the price quoted is far too low.

Mr. Noel-Baker

May we press the Minister for an answer whether the Government will welcome offers of contract on a no-profit basis?

Sir V. Warrender

I have already said so.

Mr. R. C. Morrison

Will the letter be circulated in the OFFICIAL REPORT.

Sir V. Warrender

It will be available in the Library for all hon. Members, and it will be in the Press.

Mr. Day

Can the hon. Gentleman say how any estimate can be far too low?