HC Deb 02 August 1957 vol 574 cc1719-38

1.58 p.m.

Mr. Ellis Smith (Stoke-on-Trent, South)

Yesterday, I asked Mr. Speaker if I could move the Adjournment of the House for the purpose of calling attention to an urgent matter of public importance, namely, the serious allegations made by my hon. Friend the Member for Leeds, East (Mr. Healey). I linked that up with the question of the discharges which have now taken place in the Royal Ordnance factories and with the administration, within limits, of the Ministry of Supply. We welcome this opportunity of stating our view and also of providing the Minister with an opportunity of replying to my hon. Friend and considering the reasoned case which I shall attempt to make.

During my years here I have often listened to appeals being made on behalf of individuals, and I claim to be as sympathetic as anyone when individuals are in difficulty. But if it is right to appeal on behalf of one man it is surely right to use our time to petition the Minister to reprieve 7,000 men who are now under notice. That number includes 2,500 within a few yards of my constituency.

We are asking that through the inquiry which will be made into the allegations made by my hon. Friend, all or some of these notices should be cancelled. They cover hundreds, if not thousands, of people who have not done anybody any harm. They have a great record of service both during and since the war. Therefore, if it is right to petition on behalf of the rights of one man, then it is right to use our democratic rights within this assembly for the purpose of petitioning on behalf of the 7,000 people whom we represent.

I am one of the first people to make all allowances for the difficulty of the Minister, in particular, in the matter and of the Ministry in general. It is easy to talk. I was brought up in a field of activity and industry where we knew that only too well. Therefore, I am prepared to make all allowances. At the same time, however, we have to remember the background of this business and how well these people have served, many of them since 1938 when the Royal Ordnance factories were first constructed in the country, in the same way as others have served at places such as Woolwich.

Quite apart from that, but bearing in mind the startling revelations made by my hon. Friend the Member for Leeds, East, we say—and in this we have the support of most of our hon. Friends who are not here today—that the notices of discharge should be withdrawn pending a searching inquiry into the revelations. I have asked my hon. Friend to pull my coat when I have spoken for ten minutes so that all those who wish to do so may have an opportunity to speak in the debate. I have seen so much of the other thing happening that I do not want to be guilty of it. Therefore, if I do not provide evidence satisfactory to the Minister, I ask the right hon. Gentleman to look upon it in a generous way. It will be due to the limited time that I propose to speak.

What I have said up to now puts our case in correct prospective. If the allegations are well founded they will constitute a grave national scandal, and if an inquiry is held—and this is the main point I wish the Minister to note—it may reveal new ideas which would enable the right hon. Gentleman to reconsider the results of his recent survey. This is not a personal matter, because decisions have been based upon a survey. The inquiry may result in a new approach to the problem and in contracts at present being given to other firms being given to the Royal Ordnance factories, as a result of which we may be able to avoid the discharges.

The statement made about the alleged irregularities in reference to the Swiss Government's orders has already resulted in the Prime Minister ordering an inquiry. According to HANSARD of 31st July, column 1374, we read that the Swiss Government have already had an inquiry made. I understand that this matter was raised in the Swiss Parliament on several occasions and that the Swiss Government are satisfied that the allegations made within the limits of that particular issue by my hon. Friend were well founded. Therefore, we think that something should be said about that today in addition to the inquiry that is going to be carried out on the instructions of the Prime Minister.

I see that the Manchester Guardian and The Times today carry a report issued by the Chairman of Leyland Motors. On the technical side of Leyland Motors, we give all credit where it is due. We also give great credit for the very fine contribution which that firm has made to our export trade and to our standards throughout the world. I never forget that when I visited the Soviet Union in 1927 that country was placing orders all over the world for lorries and buses. The vehicles supplied by Leyland Motors cost more than those bought in other parts of the world, but the Russians said that, in spite of that, they would take all they could get from Leylands because the extra which they paid on the price would be saved in no time upon maintenance charges.

There is no complaint against one particular firm in regard to the matter, but we are inclined to be suspicious and to think that there has been a bit too much of this kind of thing going on. My hon. Friend seized upon this concrete illustration in order to see whether there is any basis in our suspicions. The Chairman of Leyland Motors said, "We paid the market price for the machine tools." I know a little about machine tools, and I should like to ask the Minister whether he can tell us, either today or later, what the price was. Could we be given some examples of the tools so that we can check up for a reason that I shall give later on?

The Chairman of Leyland Motors also said, "We paid what the Government asked for the factory." Could we be told what the firm paid for the factory? Every time I passed the factory in the train I could not help looking at it in admiration. It was one of the finest constructed factories I have ever seen. It was a pleasure to look at. As we are responsible for a colossal expenditure of approximately £1½ million of our country's money for armaments we should be lacking in our duty if we did not probe the matter to the maximum extent, to see that we are getting the best results for that expenditure.

I plead guilty to feeling very disappointed at the Prime Minister's Answer to a Question which I put to him with regard to the continued acquiescence of the House and of the Government in the out-of-date administration based upon the Monk Resolutions. I do not want to say too much about that today, because I am confident that, sooner or later, the House will begin to pioneer and develop. It often takes ten or twenty years for that to happen in the House, but eventually it comes about provided one follows it up and. is not too discouraged. I am discouraged at the Government's continuing acquiescence in administration based upon the Monk Resolutions. We realise the difficulties that consistently arise regarding coming to an agreement about the disarmament sub-committees, and it is against that sort of thing that we are determined to pursue these matters more and more.

Just before the war I was very friendly with a number of members of the management of A. V. Roe and a number of other places who brought out the Manchester which was later perfected and, which resulted in the great aircraft, the Lancaster. They were responsible for building and running "shadow" factories during the war. We cannot understand why, if a policy of that kind could be applied before and during the war with such magnificent results, it cannot be applied in peace-time.

We are of opinion that a factory like Swynnerton, which it is proposed to close and which is built on one of the most magnificent sites in the country, with sidings running parallel with the main north-south railway, could be used as a shadow factory for the purpose of increasing our export trade. We are leading the world in the development of atomic energy. Friends of mine have played a leading part in this and no one admires them more than I do. We think that we could be meeting more of the world's needs for these things if we increased our capacity, based upon the research and development carried out by such concerns as Metropolitan Vickers, English Electric, British Thomson-Houston, and others. The same applies to railway modernisation.

I thank my hon. Friend for giving me the tip that my time is up; all I hope is that other hon. Members will give one another the tip so that we may make the best use of our time this afternoon and, at the same time, leave the Minister ample time to do the debate justice in his reply.

The credit squeeze is still in operation, and some of the people who are suffering most as a result are the local authorities. I cannot understand why there is not the maximum consultation before embarking on a policy of this kind between the Ministry's representatives, the Board of Trade and the local authorities. I am a great admirer of that section of the Board of Trade which administers the Distribution of Industry Act. I know the great work that it does, but it needs more assistance from other Government Departments.

There should be close joint liaison so that when any difficulties arise, such as I have mentioned in north Staffordshire, there should be some first-hand consultation with the local authorities and large industrial firms so as to avoid the ruthless discharge of men and women who should be treated rather better than they have been so far.

2.11 p.m.

Mr. Denis Healey (Leeds, East)

I think that the whole House will be grateful to you, Mr. Speaker, for giving the Government an opportunity of replying to the case I made on Wednesday evening. I do not propose to repeat the case which I then made in detail.

It will be remembered that my main point was this. The Royal Ordnance factories are losing at present about £10 million a year of the taxpayers' money, because the home demand for conventional armaments has fallen very heavily. None of us complains about that, but there is still a very big foreign demand for conventional armaments, much of which is taken up in this country. My contention was, and is, that the Ministry of Supply has thrown away an opportunity of saving the taxpayers' money, and, indeed, of making a substantial profit, by allowing, encouraging, these orders to go not to Royal Ordnance factories, but to private firms.

If the cases which I am about to put forward can be substantiated—and I agree that, on one of them at least, I am as much in the dark as any other hon. Member whether my allegations and the statements made to me are wholly true or not—then, at best, the Minister is guilty of grave commercial incompetence, and, at worst, of something a good deal more serious.

I wish to raise two particular cases, and I should like to put some precise facts to the Minister, to which I hope he will be able to reply today. They concern two private firms—Leyland Motors, Ltd. and Vickers-Armstrong. I should like to make it clear that I am not concerned here in criticising the conduct of the private firms. If they have been able, through the incompetence of the Minister and in the interests of their shareholders, to get these contracts, so much the better for them. What we are concerned with is that the Minister should have given them the opportunity to make these gains.

Vice-Admiral John Hughes Hallett (Croydon, North-East)

Before the hon. Gentleman deals with the individual firms, and in order to clear our ideas, could he say where this figure of a £10 million loss comes from? Is it an official estimate?

Mr. Healey

It is a loss, but perhaps the Minister himself would like to reply to that.

The Minister of Supply (Mr. Aubrey Jones)

It is not a loss. It is the figure for maintaining in being capacity which is not, in fact, being used, but is retained for emergencies.

Mr. Healey

It is not a figure which is made by any gain. It is a loss, if I am right in saying that this capacity could be kept fully employed and cover its own costs.

I do not even say that the present Minister of Supply is mainly responsible in the two cases I wish to raise. Indeed, I believe that we should probably find, if we looked into it, that the present Foreign Secretary and the present Minister of Defence held a major responsibility at the time the critical decision was taken.

I should like to put to the Minister some precise questions. First, on the Leyland case. The Leyland tank factory was not a Royal Ordnance factory, properly so called; it was an agency factory, built by Leyland's with the taxpayers' money and used by Leyland's on the taxpayers' money for only two years. This superb factory was in operation for only two years when the Minister decided that there was no longer any work for it. In the middle of last year, he asked Leyland's if it would like to buy it, and, of course, the company stumped at the opportunity, because it had had the use of it for two years and it was on a neighbouring site to that of its main factory.

Sir Henry Spurrier, the Managing Director of Leyland's, has, according to the Press today, stated that the firm paid the market price for the machine tools, and what the Government asked for the factory itself. Of course, there is no market price for machine tools for producing tanks already in position. In fact, if Leyland's would not buy them, it is very doubtful whether anybody else would have done. What Leyland's paid for the factory buildings themselves I do not know, but I hope that the Minister will reply to my hon. Friend's question and tell us three things in this connection.

First, what was the cost to the Government of building this factory, which was in operation for only two years, and for putting the machinery into it? Secondly, what did Leyland's pay for taking over the factory? The third question in connection with the Leyland affair is that, at the time when Sir Henry Spurrier bought the factory, he had a large arms order up his sleeve. A major contract amounting to £25 million has been mentioned, and though it sounds a large amount to me it may be correct. It was to provide tank bodies on sub-contract for a French firm on an order of the German Government. This, undoubtedly, will make very substantial profits for Leyland Motors.

I suggest that it is gross incompetence for a Minister to sell a factory, even on the verge of getting an order like this, and when, consequently, a private firm is getting the profit instead of the taxpayer. I should like the Minister to say whether he knew of the possibility of this order coming the Government's way, and, if so, what steps he took to get it.

The second case I wish to raise is in my view a good deal more serious, because I hope to show that the Minister has already misled the House on a most important matter. The firm of Vickers-Armstrong recently acquired two contracts from the Swiss Government, each for 100 Centurion tanks, the first one in 1955 and the second in 1957. It subcontracted half—I am not clear whether it was half of the first or the second contract—to the Royal Ordnance factory at Barnbow, for which, of course, no doubt the factory was very grateful.

I do not wish to say much about the circumstances in which Vickers-Armstrong got the first contract. I know that a spokesman for the firm has said that there was no irregularity in the circumstances, but we all know that the standards of big armaments firms like Vickers are lower than the standards which some of us would wish to see maintained. The spokesman for Vickers-Armstrong did not say that the Swiss Government insisted, as a condition of Vickers getting the second contract, that the firm should sack its agent in Switzerland. Indeed, I am sure that any hon. Member who likes to read the account of the case printed in The Times of 18th June will agree that what I said on Wednesday was not unfair to Vickers-Armstrong.

I should like to say, however, that I was unfair to the Swiss Government, because it is not the case that the Swiss Government gave the contract to Vickers because of its own behaviour in relation to the money given to its agent and so on. Vickers-Armstrong got this contract because the Minister of Supply did not go after it, and because the Minister of Supply would not make a competitive tender.

I wish to ask the Minister some questions in this respect. In the first place, R.O.F. Centurions are cheaper than Vickers Centurions, or else Vickers could not afford to sub-contract the order. I understand that R.O.F. Centurions are probably 20, 25 or 30 per cent. cheaper than the Vickers Centurions because, of course, the R.O.Fs. were set up exclusively for producing this particular tank. Can the Ministry deny that the R.O.Fs. are capable of producing these tanks much cheaper? At the time these orders were going through there was heavy redundancy in the R.O.Fs. Indeed, at the time the second order was made, which was this year, the Minister had to decide to wipe out one tank R.O.F. entirely at Dalmuir and the other at Barnbow was working at 20 per cent. of its productive capacity.

Obviously, there was an outstanding case for the Minister to go after the Swiss contract. I asked the Minister about that on Monday, and he made a statement which I have found to be totally incorrect. The right hon. Gentleman said that the reason why he had not gone after the contract was that … it is part of the Swiss convention of neutrality, if not of their neutrality laws, that orders for arms should be placed not with foreign Governments but with firms. That is completely incorrect and I hope that by now the Minister knows it to be incorrect. It was on the basis of this incorrect statement that the Minister went on to say: Had it not been for this firm's acting as a middleman this order would not have been secured by this country at all."—[OFFICIAL REPORT, 29th July, 1957; Vol. 574, c. 845–846.] That is quite incorrect, because the Minister knows that the Swiss Government decided that they wanted Centurions quite early in the deal and had spent some time trying to find out how they could get Centurions most cheaply.

I cannot understand, on the Minister's statement on Monday, why he should not have known—I am sure he did not—that, in fact, the Swiss Government had gone to the Ministry of Supply several times both in connection with the first Centurion contract and the second. The reply they got from the Ministry was, first, that it could not produce the tanks cheaper, or was not prepared to sell them cheaper than Vickers-Armstrong, and, secondly, that it was not capable of meeting the delivery conditions. In fact, half the tanks have been subcontracted in any case to a Ministry factory which, as a result is only working at about 30 per cent. of its total capacity.

Mr. C. R. Hobson (Keighley)

It is nearly as bad as the dockyards.

Mr. Healey

I challenge the Minister to confirm or deny the truth of the statements I have made about the conduct of his own officials.

My last question is this. Vickers has sub-contracted half of one, or both, of these orders—perhaps the Minister can tell us which it is—to the R.O.F. at Barnbow. Can the right hon. Gentleman tell us at what price the R.O.F. is producing these tanks for Vickers? We know the price Vickers was getting for the first lot of tanks, because it promised to pay its agent one per cent. of any order passed by the Swiss Parliament, and it paid its agent £33,000. In other words, Vickers was producing the first lot of tanks at £33,000 a head. I challenge the Minister to tell us what price the ordnance factories provide tanks for Vickers.

Unless the Minister is capable of denying what I have put before the House, there is no doubt whatever that he gravely misled the House on Monday and for that I suggest he deserves the censure of this House. Not only did he mislead the House, but he misled the men working in the ordnance factories, because he informed bodies of the men on various occasions that the reason that he had not applied for the Swiss contract was that he was prevented from doing so by some obstacle of Swiss law. If my allegations are correct, I suggest that the Minister and his predecessors are guilty of gross negligence in their duty to the taxpayer and I should like to suggest that this is an affair which should be inquired into by the Committee on Public Accounts at the earliest possible moment.

2.24 p.m.

Mr. Jack Jones (Rotherham)

I speak as one who was duty Minister at the time when the Royal Ordnance factory at Barnbow was provided for the production of the Centurion tanks. This factory was a national asset and had been for a considerable time, and it should have been treated as such. I am interested in the facts of the situation. No one would wish to make political kudos out of this. Here was a nationally owned concern producing material of the greatest importance to the preservation of our democratic way of life.

I want the Minister of Supply to give us the actual price paid for the structure and the actual price paid for the tools there. I had some knowledge of what they cost to put there. They were provided at a time when American dollars were at a premium and we were paying for American tools from our scarce copper reserves. I do not mean copper in the sense of money, but as a vital raw material. No price can be placed upon the "know-how" of the people working in the factory, or the tremendous fund of skill which has been built up there. These men were taught how to make Centurion tanks and their skill and knowledge is second to none in the world. The Minister knows as well as I do that that factory could produce any weapon of defence cheaper and better than it could be done anywhere else.

I am interested in the prospects of the men employed at this factory. They are not in my constituency, but whenever men are likely to become redundant, and wherever they are, I am interested. This matter which has been raised by my hon. Friend the Member for Leeds, East (Mr. Healey)is one of vital importance. There are other activities in the country in which I am interested. It would be unfair to press the Minister for a reply today on the subject, but I should like to know what has happened to the factory at West Hartlepool, where refractory bricks are produced. Some of us are interested in these places, which are doing a wonderful job for the country, and if the Minister cannot give us the information today perhaps he could deal with it by correspondence. These bricks are manufactured from sea water and this is one of the finest factories of its kind. It should be proved to the satisfaction of the taxpayer that these men are redundant.

2.26 p.m.

Mr. John Strachey (Dundee, West)

With the leave of the House, I should like to speak again to associate the Opposition Front Bench with the initiative of my hon. Friend the Member for Leeds, East (Mr. Healey)on raising this issue. We consider it to be one of great importance. Unless the statements of fact which my hon. Friend has made to the House can be controverted, it seems clear that the Government have gone to extraordinary lengths to avoid these contracts being fulfilled by R.O.F.s and to insist on them being fulfilled by private industry. This seems to be borne out by the two reasons given by the Government. In the first place, we were told, through the Minister', that the Swiss Government would not, or could not, have placed an order with the R.O.F.s and would place it only with a private firm. That turns out to be completely untrue. It is just not the case.

The second reason given was that the R.O.F.s were too busy. On the contrary, we find that they were so incomplete, and Vickers was so busy, that Vickers subcontracted a large part of the order to the R.O.F.s. Here we find two stories which I must characterise as "cock and bull stories." If there were perfectly good reasons for doing this; if there were good and sufficient reasons for keeping the R.O.F.s out of this and giving the orders to Vickers, why were we told these "cock and bull stories" about it? If there were good reasons, why did the Government try to cover up the transaction by those two statements, which, the minute they are examined, turn out to be completely without foundation?

The Swiss Government were anxious to give the order to the R.O.F.s and actually approached the Government in the matter. The R.O.F.s which were said not to be able to carry it out are actually carrying out a large part of the orders under sub-contract. We are driven to the conclusion that the Government are acting with the most extreme doctrinaire prejudice against public enterprise and production, and that at all costs they are diverting orders, even when it is difficult to do so, from public enterprise to private enterprise.

We should like to hear what the Minister has to say about this and unless he can give very different explanations from those given so far I am sure that the House will not let this matter drop; that when we come back after the Summer Recess very much more will be heard about it.

2.30 p.m.

The Minister of Supply (Mr. Aubrey Jones)

Although the hon. Member for Leeds, East (Mr. Healey)tugged the coat tails of his hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith)at one point, I do not think any of us is without sympathy with the main tenor of his speech.

As I understand it, the real point that he was trying to make was this. At a moment when there are redundancies in the Royal Ordnance factories because of the reduction in domestic demand for arms, we ought to ensure that as many export orders in arms as possible should go to the Royal Ordnance factories. With that I wholeheartedly agree. I would put in this one qualification, that never under any Administration—Right, Left, Radical or whatever the opposite of Radical is—have the Government of this country gone in, in a very large way, for the export of armaments. I need not dwell on that. Clearly, it is a matter of tremendously critical delicacy and the implications would be quite formidable.

However, within the capacity of the Government arms-making factories, we certainly endeavour to export as much as we can. Of the total output over the last few years from Royal Ordnance factories, between 20 per cent. and 25 per cent. have been for export. Of the export orders received by this country for arms which the Royal Ordnance factories are equipped to produce, 80 per cent. have, in fact, gone to the Royal Ordnance factories. The vast majority have, therefore, come the way of the Royal Ordnance factories. As for the Barnbow factory—I am not sure whether it is in the hon. Gentleman's constituency or not—it is now almost entirely engaged on export orders.

Mr. Healey

The point is not that the Ministry is not giving its own contracts to the R.O.F.s but that it is not trying to get a high enough percentage of the total arms contracts placed in this country.

Mr. Jones

I accept that one ought to get as high a percentage as possible of arms contracts placed in this country. I have on more than one occasion in the last few weeks said what the Government's policy is. For domestic orders the Royal Ordnance factories are a preferred source; for export orders they are also a preferred source, subject in both cases to one qualification. The Government, the Ministry of Supply, have a duty to the armed Services as well as to the Royal Ordnance factories, and if the interests of the Services are better served from a design of a private firm than they are from a design of a Royal Ordnance factory it is better, I think, to follow the design of the private firm. That is why the Government have an interest in maintaining the Vickers tank design team, because it is an efficient and competent tank design team. The policy is to give preference to the Royal Ordnance factories, but not to give them automatic protection. They ought not to regard themselves as a monopoly.

I am not, therefore, out of sympathy with the general plea that has been made. Where I think I would differ from the hon. Member for Stoke-on-Trent, South would be in this. The implication of his remarks was that if only the Government would be more active in seeking these arms export orders, these redundancies would be entirely unnecessary and there would be no need to close down the seven factories which have been listed for closure. I must refute that. The orders of magnitude, I am afraid, make that argument utterly untenable.

The speakers on the opposite benches have justified their plea, a plea with which I hope they accept my sympathy, by adducing two examples, the Leyland factories and the Swiss ordered tanks from Vickers Armstrong. The hon. Member for Leeds, East was, if I may say so, more moderate in his expression today than he appears to have been the other evening, judging from the OFFICIAL REPORT. The other evening he went so far as to claim that he was completely satisfied that he had the absolute actual facts.

Mr. Healey

Of the Swiss case, yes.

Mr. Jones

That was a very large claim for anyone to make. This is a very complicated and intricate transaction. It involves more than one party, and all I can say is that I hope that I can give the facts as accurately as they are in my possession. I will give them as accurately as I know them to be.

Let us first of all take the Leyland case. The suggestion here is that the factory and the machinery contained in it were both sold at risible price and that on the basis of this low capital value the Leyland firm managed to make a handsome profit from an arms transaction which they secured and which I think, if I understood the hon. Gentleman, they knew they were going to secure before concluding the purchase of the factory.

Mr. Healey

Which they knew they might secure.

Mr. Jones

The Leyland tank factory was built on land next to the Leyland commercial vehicle and engine factory. The hon. Gentleman was quite right. The factory was built by Leylands and run by Leylands as an agent for the Ministry of Supply. A condition of giving up the land for the building of this factory was that Leylands should have first offer for the purchase of the factory when the Government no longer needed it.

I think early in 1956 it became apparent to the Government that there was no case for having in this country four tank factories, and at the same time Leyland's were anxious to expand their commercial vehicle production. There was, therefore, a marriage of two minds. Both had exactly the same need. Towards the middle of last year, therefore, the purchase transaction was completed.

The question has arisen about the price. The price agreed was the valuation fixed by the district valuer of the Inland Revenue, and the price for the building was equivalent to about 95 per cent. of the cost of erection of the factory. As for the machinery, the pricing of that has been going on over the last year. I do not think—I may be wrong about this—that it has, in fact, been entirely completed, but it has been done entirely on the basis of current values for the machines in the market. All I can say is that the Government, from their point of view, do not consider that this was a bad transaction.

I said that the firm wanted the factory because they were expanding their commercial vehicle production, and as a matter of fact they converted it to civil production. After this conversion they secured an order for certain tracked vehicles. The order originated from the German Government. The German Government wished to place an order for a private venture tracked vehicle designed, developed and manufactured by the Hispano-Suiza company. Half of their order was placed with one of the continental subsidiaries of the firm. I think it was half—I am not quite sure—but certainly a portion of the order was placed with either their subsidiary or their associate in this country. The pattern of the associate in this country did not quite match the order and, therefore, they sub-contracted it to Leyland's. At no point of time did the Government ever enter this affair. At no point of time did the German Government or the Hispano-Suiza subsidiary ever invite the Ministry of Supply to tender for this particular contract.

Mr. James Griffiths (Llanelly)

Why not?

Mr. Jones

It is not for me to say. All I can say is that had we been invited to tender, we should have tendered, and had our prices been competitive we would have hoped to get the order. But we were not invited. We knew nothing at all about it. The order does not in fact take up the full capacity of the Leyland factory. I think it takes up, I do not know for how many years, between a quarter and one-third of the Leyland capacity. It helps to give employment to the people previously employed by the Ministry of Supply. It was as a matter of fact a condition of sale to the company that it was to continue to employ the 1,750 people formerly employed there by the Ministry of Supply. That undertaking is being carried out. I submit that in the Leyland case there is no substance for the charge that the Government have gone out of their way to try to make these orders go the way of private firms and have refused these orders themselves. That is the allegation. There is no shadow of substance in that charge concerning the Leyland factory.

Now I come to the Swiss order. As I understand the history of this even more complicated transaction, which goes back a very long way—to about 1952—the Swiss placed an order for 100 tanks with Messrs. Vickers. They never invited the British Government to tender for the order. We knew nothing at all about it. I think the suggestion of any impropriety has been refuted. It was an ordinary commercial transaction. We were never invited to tender, but because at that point of time we in our tank factories were under-employed we withdrew from the Vickers firm an order for forty or fifty tanks—I am not sure which—which we had placed with it and gave it to the Barnbow factory.

Mr. Healey

rose——

Mr. Jones

I am not quite sure, Mr. Speaker, whether I am strictly limited in time.

Mr. Speaker

No, the right hon. Gentleman has five minutes yet.

Mr. Healey

The Minister said that he knew nothing about this order. Does he mean to tell us that he allows a private firm to receive an order for Centurion tanks without his permission or knowledge?

Mr. Jones

The Ministry of Supply was never invited to tender for the contract.

Mr. Clement Davies (Montgomery)

Surely the Government knew about it?

Mr. James Griffiths (Llanelly)

This is rather important.

Mr. Jones

May I first refer to the Answer I gave in the House the other day? I did say in answer to the hon. Member for Leeds, East that, according to my understanding, it was a part of the convention of Swiss neutrality—if not, I said, of their laws of neutrality—that they placed their orders with firms rather than with Governments. In invoking the law and the constitution of Switzerland, I concede that I went too far, and I unreservedly apologise for that. Nonetheless, so far as this country is concerned it has been the convention, the practice—that is what I meant—for the Swiss Government to place their orders in this country with private firms, and there are very few instances in which orders have come the way of the British Government.

Mr. R. H. Crossman (Coventry, East)

Has the right hon. Gentleman tried to change the practice?

Mr. Jones

I am most anxious to secure as many of these orders as we can for the R.O.F.s.

Mr. Crossman

What did the right hon. Gentleman do about it with the Swiss Government?

Mr. Jones

I am quite prepared to concede that within the limitations at this point of time with redundancies emerging in the Royal Ordnance factories we ought to have pursued a more active sales policy than we did.

Mr. Crossman

But that was not done.

Mr. Jones

I come to the second order. The first order never came the way of the British Government at all. On the second order I think discussions had been proceeding a very long time, and, as I understand, in November last year the Swiss Government approached Vickers for a repeat order of 100 tanks. It was perfectly natural that they should do so, Vickers had been the suppliers of the first order and they went to the same suppliers again. Then there was a fuss——

Mr. Crossman

Fuss?

Mr. Jones

—if I may term it such, over the commission to which the hon. Member for Leeds, East referred. There was no question of impropriety.

Mr. Crossman

Really.

Mr. Jones

It was formally established by a Swiss Parliamentary inquiry that there was no impropriety and the only question in issue was whether the commission was of the right order or not, which is quite a different thing. I repeat that the first approach on the repeat order was made by the Swiss Government to Vickers. Then, round about the end of November or early in December, the Swiss Government, for the first time, approached the Ministry of Supply and asked the Ministry of Supply to tender. Before the Ministry of Supply was able to give its answer, within a few days, the Ministry of Supply was informed by the Swiss Government that they were placing the order with Vickers.

In other words, so far as we in the Ministry of Supply could see, the Swiss were observing their preference for the private firm and, having got a discharge—I think it was of the agent in Switzerland, and certainly of the commission—they placed the order with Vickers. The Ministry of Supply, therefore, went to Vickers and said, "We have capacity, not being fully utilised in our factory. May we have part of the order?" Vickers' capacity was equal to the entire order. None the less, we managed to have from Vickers half of the entire order. In other words, out of both contracts the Royal Ordnance factories got half.

Mr. Healey

What was the price?

Mr. Jones

I am not going to say the price. [HON. MEMBERS: "Oh."] I am not going to prejudice commercial discussions all over the world by revealing figures of prices. I will, however, go this far. The alleged profit of £2 million which the hon. Member for Leeds, East was talking about is utterly fantastic; it is a gross exaggeration. The price being charged by Vickers for the tanks supplied by the Royal Ordnance factory at Leeds is only fractionally extra. In other words, it is a very small extra designed to cover the guarantee offered and the after-sales service the firm performs.

Mr. Healey

Will the hon. Gentleman allow me to clear up one other point?

Mr. C. Davies

Hear, hear.

Mr. Jones

I do not want to outstay my welcome, Mr. Speaker. The only other thing I wish to say is that the hon. Member for Leeds, East made the suggestion that the Leeds factory can produce to a measure of 20 per cent. to 30 per cent. cheaper than Vickers. All I can say is that I think the figures prove that so far as we know the costs are comparable. In short, I think the hon. Member on the basis of half facts has erected a contention for which there is no justification.

Mr. Crossman

The right hon. Gentleman refused to state the price.

Mr. Jones

I am sympathetic to the plea that the Royal Ordnance factories should endeavour to secure more export order, but I can only hope that the loose way in which the hon. Member has bandied about these figures of prices and profits—[HON. MEMBERS: "Nonsense."] will not prejudice the prospects of future sales from this country to foreign countries.

Mr. J. Griffiths

Having heard the discussion the other evening and the discussion today, my right hon. and hon. Friends regard this matter as of sufficient importance to take the earliest opportunity when we come back after the Recess to return to this question again. We think it should be fully investigated and that my hon. Friend the Member for Leeds, East (Mr. Healey)has brought to the House facts about transactions which demand the fullest discussion in this House.