Guided Missiles (Expenditure) (Hansard, 21 March 1960)

§ 32. Mr. Allaun
asked the Minister of Aviation if he will name the firms of contractors which supplied the three missiles originally estimated to cost £8 million, referred to in Report of the Comptroller and Auditor General, and now estimated to cost £110 million; if he will explain the discrepancies; and what inquiry is being undertaken in his own Department about this matter.

§ 34 and 35. Mr. Swingler
asked the Minister of Aviation (1) what consideration has been given by his Department to the recent Report of the Comptroller and Auditor General on estimated and actual expenditure on guided weapons; and what steps he has taken to make current estimates accurate;
(2) what steps he is taking to prevent waste and profiteering in the production and development of guided weapons.

§ Mr. Sandys
The Auditor General's Report makes it clear that the two figures quoted by the hon. Member are not comparable. Nevertheless, there is no denying that the original estimates have proved to 20 be absurdly low. It must, however, be recognised that, at that time, neither the industry nor the Government had any practical knowledge about making guided missiles. I am sure that the right hon. Gentleman the Member for Vauxhall (Mr. Strauss), who was Minister of Supply when two out of these three missiles were ordered, will not take exception to my saving this.
With the growth of experience, the reliability of estimates has progressively improved and the procedures for checking progress have been greatly tightened up. The Accounting Officer of my Department will shortly be giving detailed evidence on this subject to the Committee of Public Accounts, which I am sure the House would not wish me to anticipate.

§ Mr. Allaun
The Minister has not answered the first part of my Question. I asked him Whether he would name the contractors, or, aft least, the main contractors, and to say whether they will receive further contracts, or a heavy penalty instead. Secondly, is it right that after waste of this dimension, involving enough to pay every old-age pensioner 10s. a week extra for twenty-six weeks, no action at all is taken, inside his Ministry or outside it?

§ Mr. Sandys
As to the names, a large number of firms and Government establishments were involved in this development. It is not the practice to reveal the names of contractors in cases of this kind. As the hon. Gentleman knows, the main contractors are very easily identifiable, but I do not want to create a precedent on that point. As regards his suggestion of waste, I would say that the fact that the original estimate was absurdly low does not necessarily imply that waste was involved.

§ Mr. Swingler
Is the Minister of Aviation aware that he cannot get away with it quite as easily as that? In a case involving an increase of expenditure of more than a thousand per cent. on the original estimate, will he tell the House why, if it was so obvious Chat this was to happen, new and more accurate estimates were not produced in the meantime?
In view of recent discussions about the lack of Parliamentary control over 21 expenditure, and as this kind of expenditure is shrouded in security, will he tell the House—if he cannot give the names of the contractors—what profits have been made in the expenditure of this £110 million as compared with the estimate of £8 million; and What disciplinary action has been taken against those who are criticised in detail in this Report of the Auditor General for failure to develop the programme in a more accurate way and failure to get proper contracts?

§ Mr. Sandys
If the hon. Gentleman had listened to my original reply, he would know that I made it clear that the figures of £8 million and £110 million are not—as the Auditor General in his Report made quite clear—comparable figures.

§ Mr. Speaker
Mr. Dugdale.

§ Mr. Swingler
Can I have an Answer to the rest of my Question?

§ Mr. Speaker
Order. Mr. Dugdale.

§ Mr. Dugdale
Is the Minister aware that if such a faulty estimate had been made by any nationalised industry there would have been an outcry on the part of hon. Members opposite, who would have said that it proved the gross incompetence of all nationalised industries? Will he take note that this proves gross incompetence on the part of at least one private industry?

§ Mr. Sandys
The right hon. Gentleman is trying to make a party point out of this. I do not wish to make a party point out of this. I had, however, to point out that two out of the three missiles were ordered during the term of office of the right hon. Gentleman the Member for Vauxhall, and I did my very best to defend the miscalculation.

§ Mr. Strauss
Is it not a fact that estimates of this sort for a new weapon must be based largely on the opinions and estimates given by the contracting firms, which are criticised and scrutinised as accurately and as carefully as possible by the advisers to the Government of the time? Surely the Minister can do nothing else but accept the best expert advice that he can get at the moment of what is likely to be the estimate of such developments of such a new device?

§ Mr. Sandys
Frankly, I do not believe that any hon. Member, if he were in the position of either the right hon. Gentleman or myself—because I was his successor as Minister of Supply—could have formed any different estimate. All I can say is that we know a lot more about these things than we did ten years ago.

§ Sir G. Nicholson
This matter raises a very important question of Treasury control over expenditure. Can my right hon. Friend say, apart from the merits of the case, whether the Treasury was kept in constant touch with the ever-rising cost of these weapons, and whether full Treasury approval was obtained at all the necessary stages?

§ Mr. Sandys
There is a Question on the Order Paper relating to the last point. On the first point, certainly the Treasury has been kept informed of the changing estimates that have occurred, which is an answer to one of the points raised from the benches opposite.

§ Mr. Swingler
Will the Minister either answer now or promise in the future to answer the detailed criticisms both of wastage by contractors and of inaccuracies and improper contracting by the Department which are made by the Comptroller and Auditor General?

§ Mr. Sandys
I said in my original reply that the Accounting Officer of my Department is shortly to give detailed evidence to the Committee on Public Accounts. It seems to me that that is the best place to go into this matter in detail.