HC Deb 28 April 1937 vol 323 cc330-2
69. Mr. T. Johnston

asked the Secretary of State for War, in view of the reaffirmation of the managing director of Messrs. Ransomes and Rapier, Limited, that they are willing to produce shells at 17s. 11d. for His Majesty's Government, free from any stipulation as to indemnification in the event of eventual loss to the firm arising from production at that price, and that they will return to the Treasury any profit made, and seeing that this price is admitted by the War Office to compare favourably with the prices tendered by other firms, whether the Government will now give instructions in the public interest to have the Ransomes and Rapier offer made the subject of reopened negotiations?

The Secretary of State for War (Mr. Duff Cooper)

In addition to the cost of 17s. 11d. quoted, I am bound to take account also of the cost to public funds of providing plant, etc., which amounts to £30,500, while the deliveries of shell in the time required would not exceed 40,000. On this basis, the proposal is not sufficiently favourable to warrant the creation of new capacity in the locality in question.

Mr. Johnston

Will the right hon. Gentleman answer the essential part of the question—whether in view of the facts stated he is prepared to reopen negotiations with the proprietors of this firm on the basis that no loss shall fall on His Majesty's Government.

Mr. Cooper

As stated in my original reply, the proposal the firm put forward included a suggestion that His Majesty's Government should be responsible for the creation of a factory at a cost of £30,000. On that basis we are not prepared to reopen negotiations. If we have to erect factories for the production of shells we consider it desirable to build them in areas where there is great distress and grave unemployment or in areas where there is defence or an improbability of air attack.

Mr. Johnston

Is the right hon. Gentleman not aware that nowhere in the correspondence was there the slightest suggestion that this offer was turned down upon grounds of vulnerability? Secondly, is he not aware that the firm are prepared to give the most explicit guarantees that no financial loss can accrue to His Majesty's Government—

Mr. Cooper

On condition that we pay £30,000 for a factory.

Mr. Johnston

With regard to that interruption, is the right hon. Gentleman aware that the firm have said that the 10 per cent. that is included in the 17s. 11d. price they offered includes all the depreciation charges on the buildings, and that they are prepared to negotiate with the right hon. Gentleman even on that point?

Mr. Cooper

I am well aware of those facts, but I insist that in the first place His Majesty's Government would be liable for the provision of new plant to the extent of £30,000.

Mr. Johnston

In view of the fact that the right hon. Gentleman is not aware of the facts, will he be prepared to reopen negotiations with the firm on the basis stated in this question?

Mr. Radford

Is it not a fact that the head of this concern was a Socialist candidate at the last General Election?

Mr. Johnston

I do not desire to raise any fresh point; I merely ask in the public interest whether the right hon. Gentleman would mind answering the last part of my question "aye" or "nay"?

Mr. Cooper

I am always prepared to hear any representations either from the right hon. Gentleman or from the managing director of the firm with whom we have been in communication. If he has any fresh proposals to put forward, we should welcome discussion, but we are not prepared to undertake at the Government expense the construction of a new plant.

Mr. Johnston

I beg to give notice that, in view of the unsatisfactory nature of the replies, I shall take the earliest opportunity of raising this matter.

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