HC Deb 24 March 1955 vol 538 c2260
31. Mr. Holt

asked the Chancellor of the Exchequer if he will recommend to the appropriate Departments that, in future, Government contracts should be made firm contracts without escape clauses for increases in the cost of materials or labour.

Mr. H. Brooke

It is already the general policy for Government Departments to call for tenders at fixed prices, and not to include variation of price clauses in their contracts. The uniform application of these principles is not, however, always practicable, for example in the case of certain long-term contracts.

Mr. Holt

Will the hon. Gentleman use his influence to spread this practice throughout industry? Does he not think it would be a useful practice, to prevent wage increases, when they take place, from being immediately passed on to the consumer?

Mr. Brooke

I think I have stated the Government's policy quite clearly. It does, of course, take two to make a contract.

Mr. J. R. H. Hutchison

Will my hon. Friend not agree that at a time when wage rates and costs are constantly rising, a time of full employment, which results in long delivery dates, an escape clause which allows for the variation of a contract with variations in costs of wages and materials frequently provides the cheapest method and not the most expensive to the customer of obtaining the article?

Mr. Brooke

My hon. Friend has stated one aspect of this problem.