§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sharpies.]
§ 4.2 p.m.
§ Mr. Norman Dodds (Erith and Cray ford)
The Sixth Report of the Select Committee on Estimates on Treasury Control of Expenditure reports that a very knowledgeable person, Sir Ivone Kirkpatrick, former permanent head of the Foreign Office, had called for a purge of top civil servants who squander public money. In fact, he asked Chat civil servants who waste public money should be sacked, and he said that many top civil servants are failing to keep a tight hand on the taxpayers' money and should be retired earlier, with revocation of honours granted. That is the view of Sir Ivone Kirkpatrick, who should know.
There are many thousands of people in this country who are asking why top civil servants are not penalised when public money is wasted. People want to know, and I want to know, what does happen to them when millions of pounds are thrown away or lost through lack of initiative or care. Are they punished, and if not, why not? I have asked this question of the Prime Minister, and there does not seem to be any record at any time in recent years of any top civil servant being sacked or in any way penalised when money has been spent and it has been proved that much of it has been wasted.
I have raised this sort of subject many times, particularly with the War Department. On this occasion, I am raising the question of the surplus Army boots, on which for two years I have been asking Questions. If I had the time to give all the Answers, they would show that they were complicated Answers, conflicting Answers and above all the whitewashing that has gone on during that time. I want to make it clear that I am not making this charge against the Minister who will answer me, but, nevertheless, he speaks on behalf of the War Department. Primarily, I am talking about the Secretary of State for War, who I would have expected would have come to these debates on occasion, and have said that 876 mistakes are inevitable, but that, when a mistake has been made, some sort of rebuke is given to the people concerned.
I put my case to show that something should have been done, but that it has not been done. I submit that there are many mistakes about money in Government Departments because it is not the policy to punish those who make mistakes, although, as one knows only too well, in outside industry the penalties which prominent people have to pay when mistakes are made are of some magnitude.
Column 391 of HANSARD of 9th July, 1958, shows that the original cost of boots which had been declared surplus was about £2 million, representing one and a quarter million pairs of boots. Column 1195 of HANSARD of 2nd March, 1960, shows that the surplus had by then been reduced to 1,043,000 pairs sold for £576,000, the original cost being £1,600,000. There, at least, the taxpayer lost more than £1 million. Those are official disclosures and show that it was decided that there should be retained nine and a quarter years' peacetime supply of boots. People who know a lot about this subject say that that was part and parcel of covering up a much bigger surplus of Army boots and that it was unnecessary to have nine and a quarter years' supply.
On 2nd March, 1960, speaking of myself, the Minister said:… the hon. Gentleman has been told before that more than 1 million pairs became surplus not because of any over-ordering but because of a deliberate decision to reduce mobilisation stocks as the size of the Army was reduced." —[OFFICIAL REPORT, 2nd March, 1960; Vol. 618. c. 1195.]Having got that answer, on 13th April, 1960, I asked:… what was the date on which the decision to reduce the mobilisation stocks of boots was taken which resulted in 1¼ million pairs of Army boots being declared surplus.The Secretary of State replied:The reduction was in two stages, decided in April and December, 1956."—[OFFICIAL REPORT, 13th April, 1960; Vol. 621, c. 127.]If I had time, I would give the extracts from the Report of the late Sir Frank Tribe, then the Comptroller and Auditor-General, but I will quote from the later Report, that of the Committee of Public Accounts, published in July, 1958. In doing so, I hope that hon. Members will recollect that the excuse 877 has been that it was decided to reduce mobilisation stocks. Page 27 of the Report of the Committee of Public Accounts says:The War Office, in 1955, ordered from the Ministry of Supply 500,000 pairs of boots and 500,000 pairs of half-soles to the estimated total value of £980,000. The order was placed at that time to use up stocks of special leather reserved by the Ministry of Supply… . The quantity ordered was meant to be the smallest order which would keep production open but the War Office thought it was within their needs, not withstanding the fact that the provisioning depôt"—That is the depôt which should have known—had calculated the requirements at only 200,000 pairs of boots.The War Office ordered 300,000 pairs more than the provisioning depôt thought necessary. Each pair of boots cost the taxpayer £2, and they were sold, on average, for 10s. a pair three or four years later.
The Report continues:In April, 1956, there was a reduction in the requirements for reserves and in the following June the depot suggested cancellation of that part of the order, 317,000 pairs of boots and 235,000 pairs half-soles, which had not then been placed to contract. By this time it was known that the original order had been based on a seriously over-estimated figure of requirements, and that there was such an enormous stock of boots and half-soles in hand that there was no longer any prospect of maintaining continuity of production until orders for the new boots could be placed.I hope that the Parliamentary Secretary will answer the next point:The War Office, nevertheless, declined to cancel any part of the order on the ground that continuity of production must be maintained and "—this is the absurd excuse—that cancellation would have involved a loss on disposal of the Ministry's stocks of leather.This is an authoritative Report. Rather than admit that the boots would not be required at that stage in 1956, and rather than dispose of the stocks of leather, even if it meant a loss, it was decided to go on and to make the boots and to make a far bigger loss. The Report concludes:Your Committee fail to understand why the War Office should have ordered in 1955, when there were no unusually pressing circumstances, a far greater quantity of boots … than was warranted by the provisioning depôt's calculations, particularly as this was done without any attempt to find an explanation of the 878 difference between the depôt's and their own figure of requirements.If that had happened in business somebody would have been very severely in trouble.
On 16th July, 1958, I asked about the machinery in the department for invoking disciplinary action, where necessary. I askedhow often action has been taken, and in what way, since 1st January, 1954, where mistakes have been made in the ordering of supplies which have resulted in a substantial loss of public money.In his reply the Secretary of State for War said:Since 1954, improvements have been made in our procedure following reports of the Public Accounts Committee, but no negligence or misdemeanour has come to light which would call for disciplinary action."—[OFFICIAL REPORT, 16th July, 1958; Vol. 591, c. 1218.]If disciplinary action has been taken since, it should be recorded, and if no disciplinary action has been taken I believe that it is an encouragement to slackness in the spending of public money.
I expect that the Parliamentary Secretary will say that there was no mistake. I believe that this is the only thing he can do—to bluff it out, as the Minister bluffed it out for a long time. In that case I refer him to Hansard of 10th December, 1958, when, in answering questions, the Secretary of State for War said:The surplus was, however, larger than it need have been because of the mistakes in administration commented on by the Committee."—[OFFICIAL REPORT, 10th December, 1958; Vol. 597, c. 341.]Those mistakes in administration, there recognised, were in the War Office itself. Has anyone suffered for it? If not, it is a disgrace, and it shows civil servants that, unlike people outside, they do not have to be careful about spending public money.
That is not the only aspect with which I should like to deal. When I have asked Questions about this I have been given all sorts of evasive Answers. On 23rd March, 1959, I asked about the age of the boots, and the Parliamentary Secretary to the Ministry of Supply said:… these boots were ordered a very long time ago and have been held in stock for a great length of time. It is almost impossible now to say who ordered them, or indeed, I should imagine, what was paid for them."— [OFFICIAL REPORT, 23rd March, 1959; Vol. 602, c. 902.]879 However, I received a letter from the boot manufacturers, and I was assured that it was quite easy to ascertain these details. The details can be ascertained from the boots themselves, because these particulars, such as the manufacturer's name and the year of manufacture of the article, are stamped on the boot. The letter concluded:In my humble opinion the excuse he offers is very poor indeed.We come now to the disposal of the boots. It was pointed out that to unload these boots on to the market would be very serious for the heavy boot trade, which was already in a depressed state. Undertakings were given that the boots would be sold abroad, but, to cut a long story short, it was found afterwards that someone who had bought them had sold them to a Dutch merchant, and that the boots came back and were sold in this country.
Questions were asked about what action was being taken against those who had broken their contracts, and it was said that it was not possible in law to take any action of any sort. At long last, on 9th March of this year, action was taken to ensure that if this sort of thing happened in future it would be possible to deal with it in a court of law.
This story describes a shocking state of affairs from beginning to end. Month after month Her Majesty's Government are asked to increase the meagre amount of £200,000 which they grant to the World Refugee Appeal. Time and again people, even on the Conservative side, have been disgusted with the small amount of money given to this great appeal. It is said that the grant is large, but before the Under-Secretary of State and Financial Secretary comes to the Box I would point out that a much larger sum of money than that granted to the appeal has been spent, and it is that to which we object. When a good scheme is put forward a meagre grant is made, but when it comes to public waste there is no record of anyone who suffers for it.
We believe that this is another classical case. I have not had time to give the complete story, but what I have said embodies the details of a scheme the details of which it has taken us two years to get.
§ 4.19 p.m.
§ The Under-Secretary of State for War (Mr. Hugh Fraser)
I am content to support my Minister on these matters and to support the Report of the Department with which I am proud to be associated. I ask for no mercy from the hon. Member for Erith and Crayford (Mr. Dodds), or from his hon. Friends.
We have heard "Boots—boots—boots —boots—movin' up an' down again" ever since the Comptroller and Auditor General first mentioned the subject in his Report on the Army Appropriation Account for 1956–57. The War Office has apologised for its errors.
§ Mr. Fraser
To the Public Accounts Committee, and in the House we have stated that an error was committed. We have put in order that small section of our house which was affected by the failure to which I will refer later. The hon. Member for Erith and Crayford marches on long after the others have given up, and long after matters have been put to right.
He knows that I represent not merely the War Office but the town of Stafford. The War Office is a great consumer of boots, and in its earlier days Stafford was entirely reliant for its trade upon the production of boots and shoes. Stafford once had the honour to be represented in Parliament by no less a man than Sheridan, who once baffled his constituents by saying:May the whole world tread the trade of Stafford underfoot.The hon. Member has been almost equally heavy-handed—if not heavy-footed—in the 20 or so Questions he has put down.
§ Mr. Fraser
The hon. Member will see that we admit that there has been a mistake. I welcome this debate as an 881 opportunity to put the matter in its true proportion. I suggest that its background is a fairly simple one. In 1955 the War Office held about 6 million pairs of boots; today we have run down that stock to 2¼ million pairs. The hon. Member makes two accusations. First, he says that we over-ordered and, secondly, that there was faulty disposal. The confusion in his mind, which has continued throughout his 20 Questions and in his speech today, involves the 1¼ million pairs of boots disposed of and the 157,000 pairs over-ordered. Two absolutely separate questions are involved.
In the case of the 157,000 pairs over-ordered, I admit that the War Office made an error. That error has been admitted in the House of Commons, if the hon. Member will look through the many columns in the OFFICIAL REPORT, relating to the Questions that he has asked. It was also admitted to the Public Accounts Committee and pointed out by the Comptroller and Auditor General himself. I must disabuse the hon. Member once and for all of this confusion. The great majority of this surplus 1¼ million arose not from over-ordering but from two deliberate policy decisions made in 1956.
He will be aware that when the World War ended we naturally found ourselves with very large stocks of many types of equipment. After the war no firm decision on retention levels was taken until 1953. All such decisions are difficult to arrive at. In 1956, there were two major decisions of policy. The first concerned the size of stocks in a nuclear age, when it would be difficult to mobilise and when the duration of a war would necessarily be short, and the second concerned the size of the Armed Forces. In that year it was decided to reduce the retention level for peace maintenance stocks, including boots, from 10 years to 4¼ years. There was never any question of holding a 9¼ years' stock. A negative limit was imposed, above which, no one could go.
§ Mr. Fraser
I do not think the hon. Member quite understands what "peace maintenance stocks" means. There was 882 a total stock of about 6 million pairs of boots in 1955. If the stocks rose above the 10 years' supply point we would start disposing of the boots. The two decisions made were to bring down the peace maintenance stock retention figure from 10 years to 4¼ years and also to reduce the war reserves in anticipation of the run-down of the Army.
These two policy decisions, deliberately taken, led to a surplus of just over 1 million pairs of boots. I would repeat that these were deliberate decisions, planning for the new look which we have since given our Armed Forces. I am sure that the hon. Member would not have wished us to retain National Service so that future generations of young men could wear out more of these stocks of boots.
The comparatively minor figure of 157,000 pairs was due to errors in calculation as between the depot and the War Office—
§ Mr. Fraser
One of the men concerned is now dead and the other is retired. I am sure that that gives great confidence to the hon. Gentleman, but I would tell him that my right hon. Friend and I stand absolutely responsible for the activities of our officials at the War Office. I said, as he knows from the Questions he asked, that the procedure has been tightened up to prevent a recurrence. I would repeat that the error of 157,000 pairs of boots must be viewed in relation to a planned decline in holdings of from about 6 million pairs in 1955 to 2¼ million pairs today.
The hon. Member also mentioned the question of the disposal of surpluses of half soles. He will be pleased to know that there is no great surplus of half soles. We do not expect there to be more than a few thousand. Obviously, boots go on being repaired long after they are issued and we do not think that we are faced with any problem here at all.
I now turn to the question of the disposal of these surplus boots. It was not until the latter part of 1958 that the disposals organisation of the Ministry of Supply was given the task of selling the surplus boots—a full review of holdings had been going on at the depôt in question in 1957 and 1958 to ensure that we kept the best of our stocks and also to 883 find customers at non-disposal prices for as many boots as possible. The total for disposal was 1¼ million pairs.
We succeeded, through this delay, which previously the hon. Member has cavilled at, in disposing of 200,000 pairs of boots within Government Departments, or to other Government agencies, that is to say, some to the Air Ministry, some to the cadet forces and some to the Libyan Government. This apparent delay, in fact, was put to very good use. Just over 1 million pairs then remained for disposal and we decided, after consultation with the trade and other Government Departments that, to avoid the danger of unemployment in the manufacturing industry these should not be sold on the home market.
As the hon. Member is aware, there was, unfortunately, the breach of agreement to the extent of 43,000 pairs of boots by a Dutch firm. That is a matter which we think we have put right, as my right hon. Friend explained in answer to a Question by the hon. Gentleman on 9th March, and we have now tightened up our contracts. As a result of these deliberate steps to keep the sales in general overseas, we have, of course, received a lower price than we would otherwise have expected. I hope that the hon. Member will agree that this was a small price to pay for safeguarding as far as possible capacity and employment in the heavy boot industry which, as he knows, is a small industry producing no more than about 4 million pairs of boots per annum.
To sum up, the vast bulk of the surplus of 1¼ million pairs of boots referred to by the hon. Member is merely one facet of the many problems encountered in running down from a conscript Army to an all-Regular force. An error resulting in an avoidable surplus of only 157,000 pairs of boots was made; 884 a foreign firm defaulted on a contract agreement and sold 43,000 pairs of boots in the home market. These are matters of detail.
The main fact remains that over the last few years we have been engaged in the massive task of running down a large conscript Army to a small all-Regular force, with all the effects this must inevitably have on our store holdings. In general, I think that we can be reasonably proud of what we have done, of the way in which we have closed our depôts, run down our stocks of uniforms and equipment, including our stocks of boots from 6 million to just over 2¼ million pairs. I think that we have nothing of which to be ashamed. We have put our house in order. The men whom the hon. Gentleman would pursue are protected not merely by myself, but by the general efficiency and service which our Ministry renders to the public.
I started with a quotation from Kipling, and I will end with another quotation, as a word of advice perhaps to the hon. Member for Erith and Crayford.
§ Mr. Fraser
The hon. Member is undoubtedly well aware of this work of the poet. May I remind him of the other famous lines from the poem "Boots" by Kipling:Try—try—try—try—to think o' something different—Oh—my—God—keep—me from goin' lunatic!
§ Question put and agreed to.
§ Adjourned accordingly at twenty-eight minutes to Five o'clock.