ESTIMATES COMMITTEE (REPORTS)

HC Deb 18 December 1962 vol 669 cc1157-222

6.43 p.m.

Mr. Robert Carr (Mitcham)

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof: this House takes note of the Eighth Report of the Estimates Committee in the last Session of Parliament relating to the War Office and of the Third Special Report of the Estimates Committee The Eighth Report referred to in that Amendment is the Estimate Committee's main Report of its inquiry into the War Office. The Third Special Report of this Session referred to consists of the Departmental replies to the Estimates Committee's recommendations, together with a comment on them by the Estimates Committee.

Although it is by no means unprecedented for the Estimates Committee to comment on a Department's replies and to draw public attention to the fact that it regards part of the reply as unsatisfactory, it is nevertheless unusual for the Committee to do so, and while the normal practice of not commenting does not mean that the Committee is satisfied with the Department's reply in total, nevertheless when the Committee does comment it means that it is so dissatisfied that it feels that the attention of the House ought to be drawn to this fact.

I am sorry to have to say to my right hon. Friend the Secretary of State for War that the Estimates Committee feels exceptionally dissatisfied in this case. I want to make clear the nature of the dissatisfaction. We tried to make this clear in the comments in the Third Special Report. It arises not so much because we are disappointed with the rejection of some of the recommendations in the Report, although this was disappointing, particularly in some cases, but from the fact that the arguments used in several of my right hon. Friend's replies seemed to us either not to meet the point in the recommendations or merely to repeat the arguments used in evidence during the inquiry, which had been carefully considered by the Estimates Committee, set out in its Report, and rejected.

If any hon. Members are in doubt about the justification for the Estimates Committee's criticisms, I ask them to compare the War Office reply on this occasion with that of the Admiralty to a similar, but actually more critical, Report made by the Committee two years ago. If these two replies are compared it will become clear to the House why we feel that this reply from the War Office did not take our arguments sufficiently seriously, regardless of whether the recommendations were accepted or rejected.

I do not want to spend time on what could easily become petty arguments about the merits of the reply. It seems far more important and constructive that we should concentrate on the substance of the Report, because very large sums of money are involved in the field into which the Committee inquired.

First, I want to make clear what was the basic objective of this inquiry. As we emphasise in paragraph (4) of our Report, the Sub-Committee was not solely or even mainly concerned with the annual cost of the War Office itself, but rather with the manner in which the War Office exercises effective control over the total cost of the Army.

The War Office itself will cost about £9½ million in 1962–63, but it is directly responsible for a total Army Vote of about £520 million. It is, therefore, the effectiveness of the control which the headquarters exercises over this much larger sum which is far more important that the cost of the headquarters itself, and everything in the Report is directly related to this over-riding principle.

Is the organisation of the War Office as at present constituted the appropriate one for the effective control of such an enormous sum of money? I want, if I may, to deal in outline with four of the main features of the War Office organisation which caused us most concern from this point of view. I hope that other hon. Members will have a chance to amplify some of these points in greater detail, and of course also to take up other points which I shall not mention.

The first major feature is the question of the top levels of administration in the War Office. Without judging the efficiency of any large organisation controlling expenditure of hundreds of millions of pounds, I think the House will agree that it is natural to start by looking at these higher levels of administration.

In this respect, it seems to us that continuity of management, as well as high quality in the people who are in the top positions, is a cardinal requirement for efficiency. The most striking feature about the War Office is that 80 per cent. of the top level posts are held by military personnel who, on average, do not stay more than three years, and often less, in any particular post. The House will therefore realise the extent of the rapid turnover which takes place at the highest levels in the administration. We believe that this cannot be in the interests of efficient administration.

As an example of this, I should like to take the case of the development of the Chieftain tank. In the case of this major project, most of the senior War Office staff concerned with it had already changed at least twice at the time of cur inquiry. It seems to us inevitable that further changes will have taken place before the project is completed.

Let hon. Members think what that means. Let them translate the development and production of this tank into the development and production of a new motor car, and let us take the recent case of a relatively new British motor car, say, the Jaguar Mark 10. What do hon. Members think would have happened to that? Would it have been on time? Would it have cost mare or less had the people responsible for the production and technical decisions changed several times during the development and production? One has only to translate what this rapid turnover means into a form of production such as a motor car, which is more familiar, to realise that it must lead to serious inefficiency.

The Estimates Committee expressed similar and serious disquiet about this lack of continuity at the time of our inquiry into the Admiralty two years ago. The Committee's cancan expressed in that Report has since been strongly supported by the Zuckerman Committee on the Management and Control of Research and Development. We felt that we made this recommendation with even greater weight and greater authority behind us in the case of the War Office than we did two years ago in the case of the Admiralty. Yet, I am sorry to say, in its reply the War Office appeared far less ready to correct this weakness than was the Admiralty.

The Estimates Committee realises that this is a difficult matter in a Service Department. We accept that there must be a large proportion of officers in senior posts in the War Office, or any Service Department. We accept that serving officers cannot stay indefinitely in one post. But this is a matter of balance and we are in no doubts that at the moment the balance in the War Office is wrong, and seriously wrong.

The greater continuity which we believe to be vital to efficiency can be achieved in a Service Department in two ways. The first is by increasing the length of the tour of duty of the senior officers concerned, and the second is by the introduction of more civilians into senior posts. That is why we recommend both these things. They are complementary and I stress that they in no way represent a prejudice against military personnel holding senior posts in the headquarters organisation. They should hold such posts in considerable numbers, but if they are to do so, measures must be taken to provide far greater continuity at the administrative and technical levels than has been the case in the past if we are to get the weapons we want at the cost we can afford and if we are not to have some of the frustrations which we have suffered in defence in Britain in recent years. I repeat that it is the serious view of the Estimates Committee that greater continuity in tap management is absolutely essential if we are to achieve better administration, stronger control of expenditure and, consequently, better value for money.

I should now like to turn to a second subject, the control of research and development. This was the subject of one of the most important sections of the Committee's Report. The cost of research and development falling on Army Votes alone runs at something more than £14 million a year, but in addition there are substantial sums carried on Ministry of Aviation Votes for work done on behalf of the Army. The House should also be aware that much of the details regarding this kind of expenditure and much of the evidence on which our conclusions were based could not be published for security reasons.

It was immediately clear to the Estimates Sub-Committee making the inquiry that the system of control of research and development which had existed in the past, both in the old Ministry of Supply days and since in the War Office, was unsatisfactory. To take an old example, hon. Members will no doubt recall the dismal story of the Champ vehicle, which was abandoned in 1954 after an expenditure of about £16 million. We followed the progress of a current conventional project which, for security reasons, we referred to throughout our Report as Project X.

This project started seven years ago and has now reached an advanced, but by no means final, stage. We discovered that authorisation for the research and development programme had been given without any estimate of the likely total production costs. As the project continued, the cost became so alarming that it was necessary to reduce the number of units to be supplied to the Army. We were assured that in future this sort of situation could not occur, and I think that we were satisfied that there had been improvements in the system of control, which we welcomed. However, it seems to us extraordinary that whereas Treasury authorisation has to be secured for expenditure on projects costing more than £50,000 when given to outside contractors, no estimate has had to be produced for work carried out within the Government's own research and development establishments.

A system of project costing has now been introduced into the War Office Research and Development establishments but, as a War Office witness told us in evidence, previously there was nothing other than a statement of staff deployment to show how the resources of the establishment were being employed". and that intramural costing could not have been introduced since there were no documents from which estimates of intramural costs could be made". A Treasury witness informed the Sub-Committee: I think in one recent case we were given some indication of cost". That is, intramural costs.

I think that it is right that the Estimates Committee and the House should be gravely concerned that such a rudimentary system of financial control should have been permitted to last for so long Had there not been recent improvements in this respect, I can assure the House that our comments would have been still more critical. But even when the present position has been further strengthened by the extent to which the War Office has accepted our Recommendations Nos. 15, 16 and 17, the degree of control may still leave something to be desired. We sincerely hope that the attempts to improve the system of control will be zealously continued.

The third of the four subjects to which I want to refer involves the number of committees in the War Office. This is another feature of War Office organisation which struck us forcefully and unfavourably. We found them in almost every part of the administration. This inevitably created a suspicion in our minds that there might be a lack of a clear division of responsibility between different branches, and also that individual responsibility, which is a most important feature of good management, is too often replaced by management by committee. We therefore recommended that the whole subject of internal committees should be reviewed.

This is one of the recommendations which my right hon. Friend accepted in his reply, and we welcome that. But we cannot help being a little sceptical about the practical effect of this acceptance when we consider his reply to our other recommendations in which committees were involved, notably in connection with establishment control and costing policy. I want to take briefly the example of costing policy. In this case the Estimates Committee recommended the appointment of a Director of Costing to replace the present Costing Policy Committee—a Committee set up in September, 1961, to develop the use of costing as an aid to management and to approve an annual programme of costing work. This Committee is composed of very senior officers, military and civilian, and it has met only twice in the first eight months of its existence. This field of costing policy seemed to the Estimates Committee clearly to be one of management, in which direction of policy should be continuously applied by a single responsible individual and not by a committee of high-level, busy officers meeting twine in eight months. But this recommendation was rejected by the Secretary of State and the principle of management by committee was upheld.

The fourth subject to which I want to draw attention is the need for a fundamental inquiry in the War Office. In view of the three main matters to which I have already referred, and others which I have not had time to mention, it became clear to us during our inquiry that the time had come for a fundamental review both of the structure and function of the War Office, comparable in scope to that of the Esher Committee of about 60 years ago. To begin with we were encouraged to think that such a review might already be under way, by a committee known as the Committee on War Office Organisation, set up in September, 1961, to undertake a radical examination of War Office organisation. That phrase, "a radical examination of War Office organisation", is a direct quotation from the evidence we received. Moreover, the War Office stated in evidence to us: it is probable that radical changes cutting deep into long-established charters and responsibilities will be required and that it will be necessary to re-examine the basis of the distribution of duties throughout the War Office. With this the Estimates Committee wholeheartedly agreed.

But—and I am sorry to say that it was a pretty serious "but"—we subsequently found that the Organisation Committee, which should have been dealing with radical changes cutting deep into long-established charters and responsibilities was a relatively junior fact-finding sub-committee, which did not appear to us to have the status or authority to take a fundamental look at the existing organisation in the way in which the War Office itself said was required.

Furthermore, the War Office Reduction Committee, to which the sub-committee reports, meets irregularly. It has had only 12 meetings in five years, and has a constantly changing membership. It is a committee of eight people, but there have been no fewer than 14 changes of membership in five years. This is another example of the lack of continuity at the top to which I referred earlier. If, as the War Office acknowledges, a really fundamental review is required, surely it should not be given to a committee which meets only occasionally and whose composition changes so rapidly.

That is why the Estimates Committee recommended that a new committee—replacing these two existing committees—consisting of very senior military and civilian officers, should be appointed forthwith, to make an intensive study of War Office organisation in every aspect. I underline the words "in every aspect." We warmly welcome the Secretary of State's acceptance of this recommendation and the setting up of a committee under the distinguished chairmanship of General Sir Archibald Nye.

In view of our welcome for the acceptance for this recommendation it may at first sight seem rather odd to the House—and rather unreasonable to my right hon. Friend—that we should have made some critical comment in our observations upon his reply on this point. I want to explain why, because this may show him why we were dissatisfied with substantial parts of the reply. The wording of the reply to the recommendation for a fundamental committee of inquiry is a typical reason for our feeling of dissatisfaction.

We had recommended that this new committee should make an intensive study of War Office organisation in every aspect", but in his reply the Secretary of State says that the committee should be appointed to make an intensive study of War Office organisation with particular but not exclusive reference to that part of it dealing with equipment, research, development and production. It is true that those terms of reference did not exclude anything, but they seemed to us to indicate that the study was to he slanted, not on every aspect—as we had recommended—but particularly on certain limited although important aspects. That is what caused doubts in our minds.

These doubts were increased when we saw that Recommendation No. 2, dealing with the important matter of the length of tours of duty of Service officers at headquarters, had not been referred to the Nye Committee, although Recommendations Nos. 1 and 3 had been. So we began to wonder how comprehensive this committee of inquiry would be. That is why we considered the reply not to be wholly satisfactory, and why we wanted to know more about it.

Since then I have been allowed to see a copy of the terms of reference of the Nye Committee. The principal one reads as follows: To examine the functions of the War Office, its organisation and the distribution of duties within it, and to report to the Army Council". That is exactly what the Estimates Committee wanted. Knowing that, I can tell my right hon. Friend that we wholeheartedly welcome the acceptance of this recommendation. If only the Estimates Committee had been informed that these were the terms of reference no doubts would have been felt or expressed about it in the first place.

Mr. George Wigg (Dudley)

What does the hon. Member mean when he says that he was allowed to see the terms of reference? Was there anything confidential about them? Could not this information have been obtained by putting a Question on the Order Paper? Is this some special privilege accorded to the hon. Member?

Mr. Carr

I am sure that my right hon. Friend will deal with this in his reply. I do not believe that any special privilege is accorded to me. The members of the Estimates Committee feel, however, that in their special position as servants of the House these terms of reference might have been communicated to them so that they in turn could have reported them to the House, but I do not want to stand on dignity about this. What matters is that I am satisfied, and I believe the House will be satisfied, that this Recommendation of the Estimates Committee has been accepted in the full spirit in which it was made. That, I believe, we should warmly welcome.

In conclusion, I refer to our final recommendation in which we suggested that the Minister of Defence should institute a comprehensive review of the present system of separate Service headquarters. We mentioned the fact that the introduction of a system of unified commands as envisaged in the 1962 White Paper gave strength to the argument that there should be greater coordination and integration at the centre in defence matters.

The Estimates Committee in the last three years has inquired into the headquarters organisation of two Service Departments, the Admiralty and, now, the War Office. As a result we have come to feel that it is desirable to have a far more comprehensive examination of the whole system than we can undertake as an Estimates Committee with our limited terms of reference. Such an inquiry should ask the most fundamental questions about the suitability in modern conditions of the present structure of having independent Service headquarters. I am sorry that the reply of the Minister of Defence to this proposal was, to say the least, not very forthcoming. The 1958 system, he stated, is perfectly appropriate and it was suggested, by strong implication, that the subject is closed.

I note that The Times of 4th December described our dissatisfaction with this reply as "understandable". I leave it there, except to say that it seems that the Estimates Committee, the House of Commons which it serves and the taxpayers, whom we represent, each have the right to be assured that the present system is the most efficient and economic that can be obtained. I am afraid that the Minister's reply does not appear to recognise this fact.

Our Report was critical in some respects and I realise that my speech in introducing it has been critical in some respects. That is the duty of the Estimates Committee and the House, provided that criticisms are well considered as far as we are able to consider them and are matters of substance. It should also be said that our Report contained more than just criticism. There were many aspects of War Office organisation which we thought were good and which we praised in our Report. Although, naturally, in discussing this matter one concentrates on the critical aspects, it would not be fair to the War Office or to this House to leave unstressed the fact that there was considerable praise in the Report as a whole, which we believe was highly deserved.

I should also not wish to end my speech without on behalf of the Sub-Committee thanking those officers and officials of the War Office who assisted the Sub-Committee throughout this inquiry. I have now had the privilege of taking part in a number of these inquiries. In them we have witnessed much courtesy and co-operation, but their courtesy and co-operation reached the highest levels I have experienced in this sort of inquiry. I particularly thank the Permanent Under-Secretaries, Sir Richard Way, who was the main witness and gave a great deal of time to the business, and General Sir James Cassels and his staff at B.A.O.R. Headquarters, who received us and gave us helpful information.

It would be appropriate on behalf of the Estimates Committee to put on record the formal thanks of the Committee and, I believe, of the House, for the work that has been done by the Clerk to our Committee in preparing the Reports. As Chairman of one of the Sub-Committees of the Estimates Committee, I know very well that without a first-class Clerk it is doubtful whether any report would be produced, certainly no report of any quality. My final word is to register thanks to him.

7.15 p.m.

Mr. Bruce Millan (Glasgow, Craigton)

I am very glad indeed that we have this opportunity of debating this Report of the Estimates Committee, because I think it desirable that when the Estimates Committee has reported, if there is real dissatisfaction, as there is in this case, with the replies from the Department concerned, the matter should not be simply allowed to rest there but we should have an opportunity of pursuing it by debate in the House.

The hon. Member for Mitcham (Mr. R. Carr) closed his speech by paying tribute to a number of people who helped the Estimates Committee in its work in this inquiry. In turn I pay tribute to him as Chairman of the Sub-Committee of the Estimates Committee which carried out the inquiry. Anyone who has served on the Estimates Committee will know that the work could not be done unless the Chairmen of the various Sub-Committees were exceptionally diligent and persevering in their duties. Much falls on the Chairman of a Sub-Committee. The hon. Member in this case carried out his duties in an absolutely admirable manner. The particular quality for which I pay tribute to him is perseverance. Because of his perseverance we are having this debate this evening.

I do not want to cover the ground he has covered so adequately. My main remarks will be directed to two particular aspects of the Report in which considerable dissatisfaction with the War Office replies is expressed. One is on the question of auditing and the other on costing. I may also say a word on another subject the hon. Member mentioned, but on an aspect of it which he did not mention. That is the question of the staffing of the War Office and, in particular, the efforts made to get reductions in headquarters staffing.

There is a Committee on War Office reduction and a Sub-Committee which works under that main Committee. The unfortunate thing about the efforts which have so far been made for War Office reductions is that they are made almost exclusively in the lower levels. This is brought out graphically by the table printed on page ix of the Eighth Report of the Committee referring to military personnel changes between 1960 and 1962. The other ranks in that period came down by 22 per cent., and captains and majors by 7 per cent., but when we turn to the details about lieutenant-colonels to generals we find there was an increase.

This is one of the most disturbing aspects of the War Office administration. I suspect that it may also be true of other Service headquarters. There tends to be a continuing preponderance of very high-ranking officers at headquarters and the rest of the staffing tends to get completely out of balance.

The reason for this, or one of them, is the very simple one that these Committees on reduction tend to be comprised, on the whole, of high-ranking officers, with a result that their actions are much less drastic when dealing with high-ranking officers than with people lower down the scale. I do not believe that we can get an adequate War Office organisation unless something is done about this imbalance. The principal things about which I wish to speak are auditing and costs, but perhaps I may be permitted to say a few preliminary words.

Generally the main expenditure of the War Office, or any other Government Department, follows policy decisions, and there is no substance in the belief that one can make any considerable reduction in total or percentage terms in costs simply by looking at administration compared with what could be done were there a change of policy. Nevertheless, it is one of the particular tasks of the Estimates Committee to look at the control of expenditure once policy has been decided, upon. In the control of expenditure, as distinct from the control of policy, there is of course a considerable field for economy.

The second thing I wish to say is, as may be known to a number of hon. Members, I am myself an accountant and it may seem therefore in what I have to say about the approach of the War Office to auditing and costing that I am suffering from a feeling that the amour propre of the accountancy profession has been offended by the reaction of the War Office to our recommendations. I should say right away that what I shall have to say does not only represent my own personal view or opinion, but is the unanimous opinion of the Sub-committee and of the Estimates Committee as a whole.

Regarding auditing, we made what I thought was a mild recommendation, Recommendation No. (9), of which the main points were that the War Office should take steps to establish qualified accountants in the branches under the Controller of Audit and Accounts where at present there are none, and for the position or Controller of Audit and Accounts the possession of accountancy qualifications should be an important factor. It is extraordinary that in these three branches of the Controller of Audit and Accounts there are no qualified accountants. Not even a stray one has managed to get into any of these departments.

This is particularly strange, because one of the Departments deals with the auditing of command expenditure, and this command expenditure represents very big money. For example, if one takes B.A.O.R., the total expenditure is at least £100 million, and the locally controlled expenditure alone as distinct from any expenditure which may be controlled at the War Office is no less than £45 million, which includes a considerable component for expenditure on civilian labour recruited on the spot in B.A.O.R. and controlled exclusively, or almost exclusively, from there. I do not believe that any private firm in this country, or any nationalised concern for that matter, which spent anything like the amount spent on this one command would have the same attitude towards internal accounting which is adopted by the War Office. The attitude was that, despite the large sums of money involved, the recruitment of staff with professional qualifications was irrelevant, and I repeat that I do not believe any private firm would adopt that view.

Mr. R. T. Paget (Northampton)

Perhaps my hon. Friend can assist me further on this point. I was intrigued by the answer of the War Office to Recommendation (9): Nevertheless the normal Army accounting systems are so different from the commercial accounts with which a professional accountant has to deal and on which they have been largely trained that it is considered that the expertise of professionally qualified accountants would be largely wasted in the three branches under the Controller of Audit and Accounts. … Does that in fact mean that the accountancy system of the War Office is so obsolete as to be unrecognisable by a trained accountant?

Mr. Millan

I have taken a rather more charitable view of what the War Office means. Nevertheless, I suspect that there is a good deal in what has been said by my hon. and learned Friend.

If one is to be assured that the accounting system is not obsolete, the easiest way to obtain that assurance is to have some qualified accountants bringing their professional expertise to bear on the system. My interpretation of this paragraph was that the War Office in effect said that accounting at command and unit level was so rudimentary—a simple matter of a receipts and payments system or something of that sort—that professional accountants would not be required to audit the system. One does not want to have a proliferation of highly qualified accountants doing routine work and checking the sort of routine receipts and payments which the units probably keep. Nevertheless, the War Office report is fundamentally misguided on this matter, because a good deal of internal auditing work, even in a private firm, consists of looking at and checking, at local and branch level, what are rudimentary accounting systems.

To give an example which crops up in practice, how much detail should an auditor actually carry out in the checking of accounts? Should he check simple accounts in detail or should he do something else which might be called auditing in depth? I wish to assure the Secretary of State from my own experience—and any qualified accountants would say the same—that if unqualified personnel were given the work of checking rudimentary accounting such as one might find in the accounts of Army units, a proper balance would not be obtained between the mass of detail which has to be carried out and the other account checks which should be carried out at the same time and which are often a good deal more effective than detailed checking by unqualified people. On this matter I speak from personal experience. What normally happens is that there is far too much checking rather than too little, and a good many other checks which would be detailed checking would not be carried out at all.

The other point is that it would result in an ossified accounting system. Once the pattern had been laid down it would be followed by successive auditors year after year on the good old system that one auditor copies what was done the year before. That is what happens if unqualified people with no technical training or professional expertise are given the job of auditing the kind of rudimentary accounts which the Secretary of State seems to have in mind.

There is another aspect of command auditing to which the Command Secretary, B.A.O.R., attached considerable importance. He said that as well as doing detailed work the auditors were there to give financial advice. Once one starts giving financial advice to local unit commanders and so on it helps if there is a certain amount of professional expertise available. I am not suggesting that this need be at local level, but I am suggesting that in any Army organisation there ought to be qualified people to see that effort is not being wasted and that the Army is getting value for money—to see that auditing is effective in bringing out wasteful or even fraudulent expenditure, as must sometimes arise in this kind of auditing.

I have no doubt that the staff involved do the best that they can, but there is a need for some professionally qualified people. The Secretary of State has completely misread the position and misinterpreted the kind of recommendation which we made. We do not want a proliferation of accountants but a certain minimum of expertise to be available at a fairly high level to give direction to the auditing policy.

The same kind of general criticism is made about costings. Mention has been made of the recommendation that the present Costings Control Committee should be supplanted by a Director of Costings. There is a tendency in the War Office to appoint committees to do practically everything which is required to be done. I am speaking as an ordinary member of the Sub-Committee, and I think that the greatest difficulty which I found in the whole inquiry was finding a way through the masses of committees, usually with long-sounding and impressive titles, which seem to abound in the War Office. The War Office seems to be built on committees and absolutely nothing else.

In costing, one will not get direction in the Army costings system unless there is somebody at the top with an overall responsibility for costing. We recommend this in our Recommendation No. 11. This was turned down for what we consider to be inadequate reasons by the Secretary of State for War. He seemed on the whole to be quite well satisfied with the Army costings system. As is brought out in our Report, the costings effort is to be reduced rather than increased in the Army, as one means of cutting down Army expenditure, and there was a general bias in the evidence given on behalf of the Permanent Under-Secretary on the question of costing. There seemed to be a distrust of the professional expert. There was a feeling, "Do not let these professional castings experts loose in the Army as we do not know where it will stop". For example, there was the attitude of the customer-salesman relationship, with the various Departments of the War Office being customers for costings and the costings experts being salesmen trying to sell costings measures to the various Departments against the wishes of the Departmental heads. This is a false and misleading way of looking at the relationship which ought to be developed when any professional expert is involved.

There was also a criticism by the Permanent Under-Secretary in evidence that the trouble with costing was that one tended to have useless information brought out by means of costing exercises, and that the exercise was continued indefinitely in time with useless information being drawn out that no one was using. But this is the very thing that one gets when one has not qualified people directing the effort. What happens is that someone expresses an interest in a particular item of cost or a particular analysis of cost and there is an ad hoc—or what is meant to be an ad hoc—inquiry carried out to get the information, but it does not become ad hoc because the people lower down the line who have to do the exercise keep it in being month after month and quarter after quarter and year after year, and it is by this time useless information because no one higher up takes a careful look at the kind of information which is brought out and says that this ought to be stopped and that they ought to do something entirely different. This lack of professional expertise leads to the very complaint which the War Office made in their evidence.

There is another aspect of costing to which the Secretary of State ought to pay some attention. There was a tendency in the evidence which we were given from the War Office to look at costing simply as an exercise in analysing expenditure in ever-greater detail; as if instead of having some items divided into two, they were to be divided into 20 or 30 heads. This is only a small, and I consider on the whole an unimportant, part of costing. The whole point about costing control is that there should be some control of expenditure and that one should have some idea of what the expenditure should be and should be able to relate actual expenditure to it and to see where things are going wrong and where money is being spent unnecessarily.

If the War Office would look at this very much more from the point of view of budgetary control than from the point of view of analytical costing, which is all they seem to know about in the War Office, we might get something much more profitable on costing. The staff Which they have on the job looks inadequate; apart from a substantial number of people on the Royal Ordnance Factories there is very little costings effort in the Army and few of the people who are engaged on costings have the professional qualifications which they ought to have.

There have been some glaring examples of wasteful expenditure in the past in the development contracts and one hopes that they will not recur in the future. There is a quite artificial distinction between what the War Office call intra-mural and extra mural—in other words internal and external—expenditure. There seemed to be an idea that it was very necessary to control external expenditure but that it did not matter very much what one did about internal expenditure. The attitude seemed to be that the expenditure was incurred anyway; the buildings and staff were there and it did not matter that the costs should be broken down over particular projects. This is a misguided way of looking at the problem.

There are some improvements which are to be made. The Secretary of State referred to them in reply to the recommendations, but even these do not go nearly as far as they should. On the question of the costings sheet, it has been decided that action should be taken on all these quarterly costings sheets—unfortunately we could not publish this point in the Report; the Secretary of State has made a big concession in that against actual expenditure for a particular project he intends to show estimated expenditure in the case of projects costing more than £250,000. But of course, the estimated expenditure must be know without any difficulty at all for every project. Why should estimated expenditure not be published for every project? It is not something which has to be calculated or which changes —or one hopes that it does not keep changing continually? We know this at the beginning. Why should it be only every project over £250,000?

The fact that the War Office put such a point forward in reply to our recommendation shows how little they have grasped the points which we were putting to them about the attitude to costing. In view of the War Office Memorandum on Costing, which we print on page 100 of our Report, one can only be very unimpressed by the kinds of costing which the War Office says it is carrying out at present. One does not get the sense that the War Office is working on the same level as the Estimates Committee on the question of costing. Our recommendations on costing, as on auditing, were extremely marked. I am very disappointed that the Secretary of State for War did not see fit to accept them in total, as he could quite well have done.

There are certain aspects of the War Office administration that we thought were good. I am not sure that we got to know as much about organisation and methods and work study as we might have liked, but obviously the War Office put some effort into organisation and methods and work study. Even there, one feels that there should be co-ordination between organisation and methods, work study, the Inspectorate of Establishments and the costing effort. The War Office is not really grasping in the way it should the necessity to ensure that there is as stringent a control over expenditure as can possibly be operated.

I find the greatest difficulty in understanding what the rôle of the Treasury is in controlling Government expenditure. I put that down to start with to in- experience on the Estimates Committee, but now I am not so sure that it is inexperience. I am not so sure that the Treasury itself has any real idea of what its rôle is with regard to the control of Government expenditure. On project costs, for example, the Treasury has to give its approval if a project is to cost more than £50,000. At that point the Treasury comes in. However, in the whole field of War Office expenditure—command expenditure, expenditure at headquarters, expenditure everywhere—the Treasury seems to play a very minor rôle indeed.

Mr. Emrys Hughes (South Ayrshire)

Is my hon. Friend arguing that the Treasury takes a greater interest, say, in the Scottish Office or the Ministry of Health with a view to curtailing expenditure than it does in the War Office?

Mr. Millan

I do not know whether that is true. As a Scottish Member, I am not in favour of the Treasury taking any interest in Scottish Office expenditure. I take an exception to that. Apart from that, the principle holds good. As to the War Office and other Departments, we ought to get the rôle of the Treasury defined.

I have been talking about two particular aspects of the control of expenditure, auditing and costing. Has the Treasury a responsibility for ensuring that the individual Government Department orders its affairs rightly in fields like this which are directly concerned with the control of expenditure, or has it no interest in the detailed way in which the Departments go about their operations? In their evidence Treasury witnesses are continually saying that they are disturbed about the inadequacy of this or that control. The question which we have to ask the Treasury is, "If you are disturbed about it, what are you doing about it?" The answer clearly is that it is doing absolutely nothing in practice about it.

There is no Treasury spokesman here tonight and all our criticisms are therefore directed at the Secretary of State for war. I have a certain sympathy with Departments in their relationship with the Treasury and their not knowing exactly where their responsibility ends and where the responsibility of the Treasury starts. The previous Financial Secretary to the Treasury, who is now the Minister of Education, talked at various times in his former position about, for example, the need for professional expertise in Government service. One sees absolutely no sign that the Treasury takes the slightest interest in that when it comes to the kind of things that we have been discussing in the Report and in the debate this evening. Quite apart from our questions about the War Office, if we could get some enlightenment on that aspect of Government administration those of us on the Estimates Committee would be very grateful indeed for the opportunity that we have had of having this debate this evening.

7.45 p.m.

Captain John Litchfield (Chelsea)

Nearly half the recommendations in the Report refer to the financial aspects of the War Office. The hon. Member for Glasgow, Craigton (Mr. Milan) spoke with great authority and experience on these aspects. I think he said he was an accountant. The fact that I was able to listen with such interest and comprehension to an accountant speaking about finance indicates the breadth of his knowledge on this part of the Report. I cannot match the hon. Gentleman's experience as an accountant. I propose to deal chiefly with other aspects of the Report.

I congratulate my hon. Friend the Member for Mitcham (Mr. R. Carr) on the Report and on his presentation of it this evening. It is a valuable Report, of which I am one of the signatories, but I must admit that I signed the Report with some reservations, which I expressed to the Estimates Committee at the time and which I should like briefly to develop now. Reports of the Estimates Committee rightly attract a good deal of attention outside the House, if not always inside the House. What is said by hon. Members, and even party spokesmen, in the House tends to be a little suspect sometimes as being angled by party political considerations, but the Reports of the Estimates Committee are all-party Reports in which party politics never enter, so far as I know. What is more, they are based on evidence, albeit sometimes rather scanty evidence.

I should like to sound a note of caution about this, for three reasons. First, it must be admitted that not all members of the Estimates Committee are necessarily expert or have had very much experience in the matters which they have under consideration. Secondly, the Estimates Committee is a part-time Committee which meets once or twice a week and the evidence which it hears is necessarily limited. Thirdly, the time of the officials who come before the Estimates Committee, often no doubt at some sacrifice to their other duties, is also limited.

The fact remains that the Estimates Committee is a powerful body. Recently it has become even more so. It is regarded inside the House as the watchdog of the House, keeping an eye on the expenditure of public money, while the rest of the House can get on with more exciting and important subjects, such as the dates of our seasonal Adjournments. Without doubt, the Estimates Committee has done in this Report and in the others with which I have been associated a valuable job. There are very great benefits to the State and to the House in Departments feeling that (there is a powerful body representing the House ready to breathe down their necks, even if the process is not always altogether welcome to them. What is more, it is important that Departments should wonder whose neck should be breathed down next. It helps to keep them on their toes.

The work from the point of view of the members of the Committee is of absorbing interest and considerable educational value to those who have the privilege of being on the Estimates Committee. It is especially agreeable to serve on a Committee in the House in which party considerations are not, to say the least of it, paramount.

Mr. Emrys Hughes

Can the hon. and gallant Member give an intimation of how one gets on to this Committee?

Captain Litchfield

My hon. Friend the Member for Farnham (Sir G. Nicholson) could probably answer that better than I. I do not think that one gets on to it necessarily by acclamation or vote. I think that it is partly merit, partly integrity and chiefly luck.

It is important that the Estimates Committee should take care not to overstep the border between what one might call the investigation of specific inefficiencies which have led to money being wasted and questions of how a Department of State actually conducts its affairs and organises itself. There are some dangers in going too far in making sweeping recommendations affecting the organisation as opposed to the specific question of finance in great Government Departments.

I sometimes wonder whether in the Estimates Committee we are not tending a little, perhaps unconsciously, to become a sort of image of the United States Senate departmental committees, however pale a shadow we may now be. Some say that to become such would be a good thing. I have heard hon. Members on both sides of the House suggest that we should have functional, all-party committees of that kind in this House, but we have not reached that position yet and there are strong arguments both for and against doing so. On the whole I think that I would be against it in general.

The American system of Government is entirely different from ours. Undoubtedly it is vastly inferior and more extravagant in the expenditure of public money, but perhaps it can afford to be. The various Senate committees are an integral part of the American system and they have immense power. I very much doubt if this House would delegate that sort of power to any Committees of this House. On the other hand, Ministerial responsibility as we know it here is absent in the United States system. Ministers or Secretaries of Departments there are not responsible to Congress but to the President. Here Ministerial responsibility is a cardinal factor in our system of Government and I believe that it should be most firmly upheld.

Returning to the Report under discussion, it seems that it is to Ministers and not to any other body that we should look for the running of Departments when considering efficiency, organisation and weaknesses. It is for them to seek out and repair extravagance, inefficiency or faults in administration. We should hold Ministers, as I think we broadly do, responsible for what goes on, whether it is bad or good. There are many committees which have sat over the years within the Departments of State. I speak with greater personal knowledge of the Admiralty than of the War Office, but I do not remember a time when there has not been some body, either an internal Admiralty body or something brought in from outside, which has not been investigating the organisation and administration of the Admiralty.

Mr. William Ross (Kilmarnock)

What happens to the Reports?

Captain Litchfield

It is not as simple as that. Sometimes we have committees of investigation set up—and, no doubt, the same is true of the War Office—and conducted by the Secretary of State, the Permanent Under-Secretary, sometimes by high serving officers or people brought in from the business world outside and possibly a judge. They have not really been very successful in reducing numbers or making really drastic economies, and that is why I cannot help feeling some doubt about whether,a Report which makes such sweeping criticisms and suggestions such as the one under discussion—considering especially that it is based on a part-time study—should necessarily be accepted without, at any rate, the note of caution I have tried to sound.

I wish to deal with only a few of the recommendations. First, Recommendation No. 1 states: The number of military officers holding senior positions in the War Office should be reduced … I am sure that we should all like to see that done, but that is, to some extent, a matter of judgment. That is not the sort of thing one can lay down as law without being inside the place. Certain dangers are involved. I remember that, not as a general but as the equivalent of a brigadier, I was looking through the files in the old days, 30 or 40 years ago, finding that my side of the house—namely, naval operations, which involved a far greater number of ships than the Admiralty controls today—was handled by a much smaller staff than exists today. I am sure that staffs breed staffs in Service Ministries. I do not disagree with that recommendation, but it is a matter of judgment for the Secretary of State as to whether it would be sensible to reduce their numbers arbitrarily.

The second recommendation states: The length of the tours of duty of senior military officers in the War Office should be increased. Much the same recommendation was made in regard to senior officers in the Admiralty and the House agreed with the Committee. But there are certain facts one should bear in mind when considering the length of tours of officers in the Service Ministries. I am sure that the Committee would not wish to support the tenure of the late Duke of Cambridge who, I think, was Commander-in-Chief of the British Army for 40 years, beginning with the Crimea and ending up with South Africa. Continuity can be overdone and it is not always the hallmark of efficiency. Senior officers must be catered for in this respect in a proper way in order to bring vitality, urge, freshness and drive into administration and prevent senior officers from becoming office minded by being chairborne for too long.

The third recommendation to which I wish to draw attention is Recommendation No. 3, which states: A study should be made of the practicability of making more senior positions in the War Office open to civilian as well as to military officers. Again, I am against sweeping observations of that kind when they are put forth after an investigation of this scale and with the weight of so powerful a body as the Estimates Committee behind them. Nor in this particular case do I say that this recommendation is really supported by the evidence which was taken. I may be mistaken, but that is the feeling I have after studying the Report with some care.

These are matters not only of personal opinion and judgment, but also of personal experience and knowledge of a Department and of its day-to-day running. One thing, however, I am sure about in my own mind, though it is certainly not supported by any evidence produced to the Committee. To the best of my own experience, which is quite a long experience, I would say that there is not one single Department in Whitehall, and certainly no Service Department, which could not afford some pretty drastic prung. Therefore, I think that an investigation of this kind is highly valuable, whether or not we fully agree with the recommendation, and whether or not the Secretary of State fully accepts an investigation. An investigation, by being an investigation, has great value.

When I held one particular job in the Admiralty which involved being respon- sible for a large number of staff both inside and outside the Admiralty, and we were ordered on the Prime Minister's order, I think, which came through the Board of Admiralty, to make an arbitrary 15 per cent. reduction, about a month before the Korean War broke out, my Director—I was Deputy-Director—sent for me and said "This is utterly impossible". I replied, "Far from it; I think I could do it, and make it a 25 per cent. reduction, and not a 15 per cent. one, simply by blue-pencilling." If these reductions could have been made, they would have resulted in improvements, but the Korean War broke out at that time and, rather than contracting, we expanded. Very often, a blue pencil is the best possible friend of those who want to make these reductions without asking too many questions.

I now pass to one more aspect that concerns the actual numbers of the War Office staff. I hope that this investigation will, to some extent, result in a numerical comparison between the staff in comparable jobs in the Admiralty, following on the previous report of the Committee, and the staff of the War Office. I do not think I have been able anywhere to see the kind of figure that I should have liked to see, and I have made one or two albeit very sketchy investigations myself.

I find that in round figures, according to the Report, the staff of the War Office includes 39 generals and 875 military officers below the rank of general. The comparable figures for the Admiralty, so far as I can glean them from the current Navy List, are 22 flag officers, equivalent to various kinds of general—about half the number—and about 300 officers of lower rank in the Admiralty, against the 875 officers—that is, about one third of the War Office total. The Admiralty numbers include not only the Admiralty establishment at Bath and the dockyard administration inside the Admiralty, but the whole of naval aviation and the whole of naval weaponry as well. These figures may have been looked at by the Secretary of State, and perhaps my right hon. Friend would look into them himself.

My hon. Friend the Member for Mitcham referred in his opening speech to management by committees, and I agree with every word he said. There is a very great need for decentralisation, on the one hand, and personal, individual responsibility, as I think he will agree, on the other. This was never brought home to me more than when we were planning the operation of Overlord, the cross-Channel operation, when I alone was the representative of the Admiralty on the Cross-Channel Committee, and I had nine brigadiers representing the War Office on the other side of the table.

One result of that was that the Admiralty, when asked questions, was always able to give a broad immediate answer, although one stuck one's neck out, whereas the War Office representatives, after a preliminary huddle between the serried ranks of the brigadiers, had to say that they would go back and consult their various departments and give the answer next week. I think that shows, as an example from a long time ago, that there are advantages in clearly defined responsibilities, as far as possible, and in centralised responsibility in one person.

One of the points that is not included in the Report but which interests me and has always done, is one which I hope my right hon. Friend will find time to look into. It is the question whether the War Office in the senior ranks is overloaded with acting ranks, and whether the jobs which are at present held by senior, military officers, from colonel downwards, are comparable with jobs in the Admiralty and the Air Ministry held by the same or lower ranks. I think that this is a question which should be looked into.

I have always observed that, although the three Services are supposed to be equated nowadays, rank for rank and pension for pension, the Army makes a great deal of use of acting ranks. I will not mention brevet rank, but when I was at the Imperial Defence College, we had seven captains, R.N., and seven brigadiers from the Army, none of whom were really brigadiers at all. Three were majors and the other four were lieutenant-colonels. I see no reason why they should have been made brigadiers, with a brigadier's rate of pay, in order to go to the I.D.C.

Finally, I should like to say a word about the last recommendation of the Committee, which in some respects is the most general recommendation. It is that the Ministry of Defence should institute a comprehensive review of the present system of separate services organisation and so on. No doubt, if Skybolt is off, there will have to be a very radical reappraisal of the whole of our defence organisation. I do not doubt that, but I think it is premature at the moment to offer any constructive thought on that aspect of our defence organisation.

I appreciate the desire very frequently expressed by some hon. Members on the other side of the House to achieve the maximum integration of our defence services, but I think that we must take one or two considerations into account. Again, it is not just a matter of a paper plan or a blue-print under which, if we were starting afresh, we could find a better way of running things. We have first to remember that the Services have their own traditions which, usually, are helpful. They do not impede progtess, and they are traditions which we in this House should try to encourage rather than the reverse. I doubt very much whether the time has yet come to think of fusing the Services into a single Service, but whether we may, conceivably, before very long, come to two Services instead of three is perhaps a mare profitable line of thought when we know more about the Skybolt situation in a month's time.

Mr. Wigg

When is the Royal Navy to disappear?

Captain Litchfield

That is interesting, though I do not really agree, and I hope that the hon. Gentleman will not pursue it on the Floor of the House. The Navy is only one of the three Services likely to be concerned.

Mr. Wigg

The hon. and gallant Gentleman is going to have two Services in the future. Obviously, the Army is all right, and I presume that he is now in doubt about the future of the Royal Navy.

Captain Litchfield

I think we could have a most instructive debate on that, but if the hon. Gentleman will forgive me, I will not fallow the point any further at the moment.

There is one other point I want to make which the Estimates Committee has not fully appreciated, in regard to the integration of Service headquarters in London. The Admiralty is an operational headquarters as well as an administrative Department of State. In that respect it is quite different from the War Office or the Air Ministry. That makes it mare difficult to fuse a Department that is partly operational with two other Departments that are not operational.

One of the great values of debating these Reports, even if there are not many hon. Members present, is to turn the attention of the House to these matters. Investigation, and the exposure to what is someimes adverse criticism, helps to keep Departments on their toes, and that is a very right and proper function of this House.

8.11 p.m.

Mr. John Morris (Aberavon)

First, it is a pleasure to thank the Estimates Sub-Committee for this most valuable Report. I spent the weekend perusing it in some detail, and my admiration for the hon. Member for Mitcham (Mr. R. Carr) increased as I did so. As I read his investigations, I was forced to the conclusion that he had chosen the wrong profession, and that if he chose to change it lie ought to do well because of his ability and perseverance in cross-examination. I am sure that the whole House is grateful for his speech, and for that of my hon. Friend the Member for Glasgow, Craigton (Mr. Milan) who brought his expertise in accountancy to the service of the Sub-committee. We are also grateful for the remarks of the hon. and gallant Member for Chelsea (Captain Litchfield).

My first conclusion is that in the War Office there is a vast and complicated financial superstructure. There are illogical divisions in research and control. There are inadequate check points on expenditure, and the system of control is unsatisfactory. Indeed, that is what the hon. Member for Mitcham himself said. Further, the accountancy system is too archaic—my hon. and learned Friend the Member for Northampton (Mr. Paget) used the word "obsolete" —for ordinary accountants to be of any use.

My hon. Friend the Member for Craigton asked whether the accountancy system is so archaic that no private firm of accountants could be employed. In this age, when we need a modern Army with a modern headquarters to control it, it seems inconceivable that the War Office system of accountancy should be such that ordinary accountants cannot be employed in any capacity to control or direct it. The observations of the Secretary of State for War did not rebut the Committee's recommendations in any way and are an admission that the system of accountancy is too archaic and obsolete for ordinary accountants to be of any use.

The observation of the Secretary of State on Recommendation (9) reads: Nevertheless the normal Army accounting systems are so different from the commercial accounts with which a professional accountant has to deal and on which he has been largely trained, that it is considered that the expertise of professionally qualified accountants would be largely wasted in the three branches … concerned. That seems to be a fantastic conclusion, and there is no real rebuttal of the strong case made out by the Estimates Sub-Committee on this point.

Looking at the numbers employed in the War Office administration, it seems that the Department has become a convenient means of finding employment for a large number of senior officers, and I will return to that aspect later. Further, the system adopted by the War Office to reduce its numbers seems to have been the most naïve possible. Instead of looking at the matter from the organisational point of view, as I understand is now being done, the Department looked at it purely from the point of view of numbers.

Instead of seeing which people could be dispensed with, the Department seemed to think of a number—in this case, 7,000. It was admitted by one witness who was examined by my hon. Friend the Member for Craigton that the number "thought up" was 7,000, and it was then sought to reduce the staff to that figure. Instead of having a balanced reduction in the various grades, the War Office made a reduction in the clerical and lower branch staff. Instead of a balanced reduction, there was a reduction in typists and tea boys. That can hardly be the right approach. Further, there seemed to be a multiplicity of committees dealing with establishment matters, while the inspectorate of establishments appeared to be seriously understaffed.

There appears to be a need for a fundamental inquiry into the whole of the War Office, its administration and set up. The Department cannot in this modern age maintain itself as a sort of sacred cow that cannot be interfered with. I am pleased to see the wide terms of reference of the committee under General Sir Archibald Nye, which has now been approved by the Estimates Sub-Committee, and by the seniority of its members. Having regard to the remarks that have been made about the junior status of the members of the Organisational Committee and the Reductions Committee I hope that this new committee will have sufficient seniority to enable a proper appraisal to be made of the functions and needs of the War Office. If we have a modern Army, we must have a modern headquarters, and without a proper inquiry the system will remain as archaic as it is now.

The hon. and gallant Member for Chelsea has spoken about responsibility. The responsibility for the present state of the War Office is undoubtedly that of the Secretary of State. I do not suggest in any way that he has been entirely responsible for the build-up of the War Office to its present state—that is the accumulation of the debris of centuries—but, in his present capacity, the right hon. Gentleman is responsible for the Department as we find it now, and all these recommendations and severe strictures made by the Estimates Sub-Committee prove that in the end the chickens have come home to roost on the broad shoulders of the Secretary of State, who is answerable to this House, to the country and to the taxpayer for the present state of affairs in the Department.

I thought rather strange the cavalier manner in which the Secretary of State attempted to answer the considered recommendations of the sub-committee, whose members expended prodigious energy. They held twelve meetings at which they had witnesses before them. Extensive memoranda were put before them and, as I have already indicated, there was exceedingly thorough and pertinent cross-examination. The result is that of the 21 recommendations, four have been accepted in total, the need for an inquiry has been accepted, and there is set up this committee under General Sir Archibald Nye.

Then there are a further eight recommendations which I understand are broadly accepted, though two of these only to a certain extent. But nine of the recommendations are completely rejected and undoubtedly the Sub-Committee has cause to be dissatisfied with the observations and the manner in which the Committee has been treated. Having regard to the labours which the Committee expended, I am sure that it has the sympathy of the House in its dissatisfaction. As the Committee properly says, it is dissatisfied not so much with the rejection of some of the recommendations as the fact that in many cases the observations do not meet the points made in the Report and in some instances merely restate some of the arguments already made to the Committee.

There is no rebuttal of the case made by the Committee. The Committee has heard the evidence and come to certain conclusions, but those conclusions are not considered by the Secretary of State or those responsible in the Treasury for the replies as worthy of a rebuttal. Far too frequently the replies are a rehashing of the very points made by witnesses before the Sub-Committee itself. Indeed the whole of the Government's observations in an attempt at a rebuttal of the Report are contained in just under 300 lines. That is what the Committee's thorough and patient investigation seems to merit from the Secretary of State for War.

Frequently when an inquiry is started on any point or on any charges made it is suggested that such and such a thing will not happen now. It is said that there have been changes recently. That point is made time after time in the evidence of witnesses. When we consider Project "X" it was stated categorically in the evidence that that kind of lack of estimating would not happen now, but it seems rather strange that a project of that kind should be started and, as the hon. Member for Mitcham indicated, supported by my hon. Friend the Member for Craigton, there was no real estimate for the project and no idea how much it would cost, apart from control on the number of staff involved. Is this lack of estimating confined to this project? Are those others in the same category, or can we be assured that if an Estimates Sub-Committee makes inquiries in five or ten years' time it will not have disclosed to it other matters which are going on now and have not been remedied? I am glad that points were made about improvements in the War Office, but I shudder to think that there may be other skeletons in the cupboard which may be revealed in five or ten years' time if another inquiry of this kind is held.

The rejection by the Secretary of State of the point made that the length of tours by senior military officers should be extended seems to me fundamental. The right hon. Gentleman seems to have missed the whole point of the need for continuity. It is not only the Estimates Sub-Committee that is making the point. It is supported in its recommendation by the previous recommendation of the Zuckerman Committee, a point which was made by the hon. Member for Mitcham.

Question 533 in the Minutes of Evidence asks: While admitting the tremendous importance of user experience being injected into these departments, need it be injected at what I might call the managing-director level? The answer was: I think it should be. It is rather strange that when senior officers are appointed to these posts in the War Office it should always be insisted that they should have had recent experience in these active posts and that they should be turned around like musical chairs for two or three years. If a large firm in this country were appointing a managing director, as for example Schweppes, would it insist that the managing-director should have had recent experience on the factory floor or some other level? I am sure that, having regard to experience, a company would not find it necessary always to have people of that category though they might be found occasionally to be useful.

Mr. Cyril Bence (Dunbartonshire, East)

Does my hon. Friend appreciate that it is much easier to manage Schweppes than a modern scientific and technical armed force?

Mr. Paget

Jolly lucky for Schweppes.

Mr. Morris

I will not enter into that discussion. We shall see in due course.

The fundamental point is made by the Sub-Committee that there should be greater continuity and, as part and parcel of the general recommendation, that there should be more civilianisation. As the hon. Member for Mitcham said, it is a matter of balance. All these matters should be considered, and we have the instance of the development of the Chieftain tank. Here had been already several changes and that there would be several more before the project was completed and we had the tank in large numbers in the Army. It can do no good to the project itself. The comparison made by the hon. Member with the development of the motor car was realistic. It was agreed by the Permanent Under-Secretary in his evidence Ito the Sub-Committee that while it was a good thing for the person himself in the matter of his career it was not always a good thing for the job. That is the conclusion to which the Sub-Committee rightly came.

We are not going the right way about having a modern efficient head quarters. It seems that the Army instead of being a pyramid is a cone or square and that jobs have to be found for senior officers. It seems that the War Office, following a sort of Parkinson's Law, has built up over the centuries a number of posts. I am sure that the War Office would be better off if there were fewer of these people in these posts.

I have dealt with the question of the target and I am sure that we shall have SOM.; observation from the Secretary of State for War about the methods by which the reduction of personnel to 7,000 was achieved, but it is significant that the reductions so far achieved seem to a large extent to have been at the lowest levels of staff. There was strong cross-examination on this point and the Sub-Committee was not satisfied.

A close perusal of the Report shows that the whole concept of military organisation in this country is in danger of becoming outdated, if it has not become so already. There is here the accretion of centuries. If one were to look at the position today and apply the acid tests, how much of the present system of the War Office would remain and how many of the present personnel? I am sure that the answer would be that very little of the present system would remain and there would be far fewer than are at present employed. Obviously, there are difficulties in starting afresh—

The Secretary of State for War (Mr. John Profumo)

Will the hon. Gentleman explain that most provocative remark? I do not mind what he says about me, but I hope he is not including the generals, the officers, the junior people and the civil servants who work in the Government Department. I think that he had better make himself plain, because what he says is rubbish.

Mr. Paget

There are far too many of them.

Mr. Profumo

The hon. Gentleman said that if we started again there would be few of the present people left. That is an indictment against the present people working in my Department, and I will not have it.

Mr. Morris

The Secretary of State has misinterpreted the questions which I was putting. I was speaking, first, of the system and, second, of numbers. I hope that the right hon. Gentleman will not interpret any interventions which may be made by others as part of my contribution to the debate. I was commenting, first, on the system and, second, on the number of personnel. I made no reflection on individuals. If it could be thought that there was any innuendo in what I said, the Secretary of State will understand, I am sure, that I should wish at once to withdraw it.

There is, I believe, a need for an appraisal and I hope that the Nye Committee will be able to conduct it, looking at the matter from the fundamental standpoint of what are the real needs of the modern Army and of the modern administration. There is an immense financial superstructure in the War Office which is able to probe and keep control over very many small things, but it seems, nevertheless, that some of the larger fish get away. There have been developments of systems, of project X, of the Champ many years ago, and other comparable projects where even the immense financial superstructure which there is has not been able to probe and control research and development effectively. That is the stricture made by the Sub-Committee, that, even though we have all these arrangements there is an inadequate system to control research and development.

A point is made in the Report about the difference between extra-mural and intra-mural control. While there is control over extra-mural expenditure, that is, expenditure done by somebody other than the War Office, if the War Office itself does it there is not the same control but only control over the numbers of staff involved. This seems extraordinary. We understand from the hon. Member for Mitcham that the Sub-Committee was gravely concerned that there should be such a rudimentary system of control.

Perhaps at this stage the Secretary of State intends to justify this division which has continued over the years. He is responsible to the House for the division between extra-mural expenditure and intra-mural expenditure and the different degree of control.

Although there are several other matters with which I should like to deal, I know that many hon. Members wish to participate in the debate. I shall detain the House no further save to reiterate my thanks for the admirable work which has been done by the Sub-Committee.

8.32 p.m.

Sir Henry d'Avigdor-Goldsmid (Walsall, South)

Considering the critical tone of the debate, I think that the actual language used has been friendly on both sides throughout. I shall not follow the hon. Member for Aberavon (Mr. Morris) in all his conclusions, but I must congratulate him on having done his homework this weekend to a quite remarkable extent. He has studied the Report very fully and has made a number of points on it. It will be an added pleasure to the House to know that the hon. Gentleman's speech had the further merit of shortening what I have to say.

Although this is a critical debate, there is underlying it a very great feeling of goodwill. The Sub-Committee of the Estimates Committee which conducted the exercise had many military witnesses before it and visited several Army headquarters. I think I can say without qualification that the Committee was impressed by the quality of the people it met at all levels on those occasions. That goes for the War Office as well.

People do not change their skins when they move from B.A.O.R. to S.W.1.

Mr. Emrys Hughes

They change their salaries.

Sir H. d'Avigdor-Goldsmid

In some cases they change their salaries, but the fact remains that we have an Army which is efficient for the tasks which fall to it. I consider my own very limited military experience when it comes to comparing the difference between sending an expedition to Dakar during the last war, when there was no information about Dakar in the War Office except a very old Michelin Guide, and the immediacy with which this little operation in Brunei was undertaken. The hon. Member for Dudley (Mr. Wigg) has not got his teeth into the question of Brunei yet, but no doubt he will. I would say as an outsider that the moving of more than 1,000 troops overnight promptly, safely, satisfactorily and to the right place is something to be proud of. The fact that we can do it in Brunei must mean that we are capable of doing it in any one of a hundred different places. It follows from all this that, whatever we may think of the War Office, the way in which the Army works is satisfactory, within these limitations.

I know that my right hon. Friend the Secretary of State is rather gloomy that any aspersions we cast on the War Office will be extended to the whole Army. The first thing that should be made clear in this debate is that we are criticising War Office organisation and not invididuals. The strength of our criticism is increased by the fact that we consider the end product to be remarkably good.

Mr. Paget

Is the hon. Gentleman's point that it is even more to the credit of the Army that it operates in spite of the War Office?

Sir H. d'Avigdor-Goldsmid

That remark has been echoed by serving soldiers throughout the years, and I see no reason to suppose that it is any different today. I do not think that anyone at the sharp end of the Forces will have their morale reduced in any way by the aspersions that we may or may not cast on the War Office.

I want to give up the battle of flowers for the moment and return to the purpose of this exercise, which is based on the fact that the study which the Subcommittee of the Estimates Committee gave to the War Office organisation seemed to the War Office to have been very largely wasted. I want to develop particularly the point about the service in the War Office, which has been commented on for the third time. This was dealt with by the Select Committee on Estimates in the Session 1959–60 and later by the Zuckerman Committee. The Zuckerman Committee stated that: Lack of personal continuity in the higher positions from which operational requirements are controlled is bound to have its effect on much of the research and development designed to meet the requirements of the Services. This statement came from the Estimates Committee in the first place and was re-echoed by this Estimates Committee.

It does not appeal to the War Office, whose doctrine was laid down by the Permanent Under-Secretary, who said in answer to question No. 531: I think it is not long enough, purely on its own merits; but there are other considerations, considerations of careers, and ensuring that the officers who are going to senior appointments in the Army get a variety of experience. Probably from that point of view, it would be a bad thing if they were left too long in one job, although from the point of view of the job atone, as opposed to their own interests and the interests of ensuring a variety of experience at the top of the Army, I think three years is not enough. He went on to say in answer to question No. 532: It is very important to have what we call user experience in these high military appointments. That is all very well, and I have no doubt that at the time of Agincourt the user experience that dictated the use of the longbow as against the crossbow was crucial in determining the issue of the battle. But what user experience have officers today of ballistic missiles? We go to great expense to get scientifically-trained officers into the Army. Having got them there by attractive rates of pay, surely we should use them for purposes for which their abilities can be put to the best advantage.

I cannot really believe that people's careers are being disadvantaged by their staying in the War Office or in the department of the Master General of the Ordnance. I cannot believe that they are enhanced in any way by their being posted to an ordnance depôt. The job of these people is to use their scientific thought and ability, which we have paid for, to benefit the Service they are in. I do not believe that they can be usefully assisted by a major general with great experience of airborne landings—which I am glad to say we have got—if in fact their task is the provision of weapons to be used in some five or ten years' time.

Professor Zuckerman has said more than once that with him, if it works, it is out of date. This is the truth about these weapons. It is pathetic for the War Office in 1962 to harp on user experience in dealing with the creation of new weapons of which there can conceivably be no user experience. This is an absolutely false argument, and it does not pertain to this day and age. If this sort of argument were deployed by fighting troops, it would get shot down very quickly. I feel that the fighting troops have learned a great deal of flexibility. There is great flexibility in the command situation.

I think that some of the points which my hon. and gallant Friend the Member for Chelsea (Captain Lichfield) made about the "pongos", as he did not term them, but which I think underlay his statement, have been taken into account. I think that the planning staff so far as one can judge from outside, is functioning now and the responsibility is properly shared out. But why do the War Office still feel that user experience of longbows really is valuable in choosing weapons of the next ten year—because they are weapons of the next ten years—and particularly can it be a reason for taking away from the War Office people who have experience in these particular scientific techniques which cannot be learned overnight? I should like to press on my right hon. Friend that this is something that has been adversely commented upon three times and it should not go on being commented on another time. I am certain that if that rule is not changed, it will be commented on adversely again.

Mr. Paget

Is not the real truth of this that two quite different things are being looked at? These people are not there for the benefit of the War Office; they are there for the benefit of providing careers for officers.

Sir H. d'Avigdor-Goldsmid

I do not take that point.

Mr. Wigg

If I am being quoted, what horrifies me about this doctrine is this. It seems to me that if we are to get a weapon or a system of weapons which is being assessed scientifically or at the higher level and then try it on the troops without it being evaluated, we shall run the risk of a breakdown at the vital point. There are many things that work in the laboratories and under test conditions—a good example is the Ross rifle in the First World War—but when they come to be tried in action they break down. For that reason I think that it is vital that there should be troop evaluation. I am not quite sure if that was the point which the hon. Member made.

Sir H. d'Avigdor-Goldsmid

No. I think that the hon. Member for Dudley is also in the age of the longbow. We are talking in terms of rifles and those are terms which we all of us understand —some of us know all too much about them. But these are instruments which we do not understand, and if we get scientific officers to evaluate them I should like to have scientific officers in the War Office where they can do just that.

I turn now to a question which was touched on by my hon. Friend the Member for Mitcham (Mr. R. Carr), and I should like to pay my tribute to him. The value of this Report is the value that one gets out of it. I think that everyone will agree who has studied his cross-examination how very detailed and thorough it is and how very well he has been able to lead witnesses, and I would echo the words of the hon. Member for Aberavon on this subject that perhaps he has misjudged his career.

I think that the hon. and learned Gentleman went a little far in talking of the Army entirely on a business basis because, as my hon. Friend rightly said, there must be a question of balance. When we come to establishment control, this is a case where balance simply has disappeared. My experience of establishment control was gained during the war. I had to argue before an Establishments Committee at the War Office whether the particular organisation in which I was interested got a batman driver. I was given very short shrift. I was confronted with a hanging jury determined to give away no batman drivers. This is evidently not the case today. There is a proliferation of committees, and this is a point which my right hon. Friend missed in his reply. He did not appreciate the number of committees which seem to deal with establishments.

Why is there a need for establishment control? The fact is that as long ago as 1957 the War Office decided that it would reduce its numbers. It gave itself an arbitrary target of 4,000, which was subsequently increased, after the abolition of the Ministry of Supply, to 7,000. What has happened since 1960? There has been an overall reduction of 576 in the total War Office numbers. This is about 6½ per cent. In the same period, Vote A, Serving Army Personnel, has been reduced by 64,861, which is about 20 per cent. In the case of War Office civilian numbers, which were reduced by 437 between 1960 and 1962, no less than 430 were clerical and typing grades. My hon. Friend the Member for Mitcham commented in Question 866: We cannot help getting the impression that either the high level policy departments were very lavishly supplied with staff or that the important people are planning and writing things out in longhand! That L the inescapable conclusion of a reduction of 430 in the clerical grades, but this is not a true reduction, as I shall show.

There have been transfers of 360 staff from War Office Vote 3 to War Office Department Outstations Vote 4, and had it not been for these transfers Vote 3 numbers would have increased by 100. As presented to the Committee, it became clear that the apparently satisfactory rate of reduction in War Office numbers was due to reductions being made only in the lowest military and civilian grades, and, secondly, the transfer of staff from Vote 3 to Vote 4, in which the numbers have risen by 2 per cent. since 1960. This is a performance of which one cannot be proud, and it is right that there should be some establishment control, but how should this be done?

I have taken the trouble to draw up what appears to be a family tree, and reporting to the Army Council which is responsible for everything, one has on one side a Director of Establishments who is responsible only for civilian staff, and on the other the Charter Directors who are apparently so grand that they never meet at all. In Question 204 my hon. Friend the Member for Farnham (Sir G. Nicholson) asked: How often, for example, do the Charter Directors meet? The answer was: The Charter Directors do not meet as a committee at all. They tend to deal with things by minute. As my brother is now a Charter Director, I had better watch my step. I am sure that the Charter Directors perform valuable functions, but they cannot be considered to constitute an active committee. Reporting to them is the Establishments Committee which deals with certain grades and under which is a Subcommittee dealing with the lower grades.

Each of these Committees has a liaison officer from the Director of Establishments who seems to have no responsibility other than reporting to the Director of Establishment what is going on. If there is serious disagreement with any action of the Establishments Committee or 'the Establishments Sub-Committee, no doubt,the Director of Establishments can take it up with the Army Council—it could not go lower—but apparently that has not been done.

In addition to this, we have the famous Committee on the Reduction of the War Office, which was instituted in 1957. under which is the Committee on War Office Organisation which my hon. Friend the Member for Mitcham mentioned very clearly as having the duty of radical examination of War Office organisation, but which sits under an assistant secretary. It is not recruited at a level where such a radical examination of War Office resources could be carried out, or, if carried out. implemented.

Recommendation 5 of the Estimates Committee was: We therefore recommend that the machinery for regular establishment control over War Office numbers should be reviewed, with the object of reducing the number of committees concerned with establishment matters, and of increasing the authority and control of the Director of Establishments". My right hon. Friend's reply to that moderate recommendation was: regular establishment control of War Office numbers, although it has a sub-committee to deal with the lower level appointments. Matters which are outside the scope of, or cannot be agreed by, Establishments Committee are settled by the Charter Directors"— who never meet— or, if necessary, by the Army Council. This machinery has been in operation for many years and has worked well. Si monumentum requiris circumspice. For the benefit of those with a Winchester education, I would roughly translate that as, "If you want to see the headstone of the good working of the Establishments Committee, look at the War Office numbers." It is added: It is not seen how the authority and control of the Director of Establishments can be increased beyond its present level". The Committee made some suggestions about that, but apparently they were not particularly popular. One of them, which seems reasonable, came in Question No. 220 when the Chairman asked: Where do proposals for changes in establishments originate? to which the answer was: From the branch or directorate concerned". Perhaps that is a clue as to why so few reductions in establishments take place. Question No, 221 was: Are not most of them arising from the top and being forced downwards? to which the answer was, "No".

It is not human nature for people to recommend reductions in their own establishments. I cannot believe that the War Office can efficiently function on the basis of expecting to get a useful establishment control by awaiting suggestions from the branches. There must be some body in the War Office, and we hope to make it the Director of Establishments, who is interested in this matter, because without interest the point is lost.

If we can induce into the War Office that same sort of flexibility and agility of mind which we admire in the serving troops, not only will the debate not have been wasted, but we will have had what will prove to be a very valuable Parliamentary day which can influence recruiting figures only upwards.

8.55 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

I was rather interested in the hon. Member's remarks about the chartered directors. In Question No. 209 of the evidence in the Report of the Estimates Committee they are described as a machine. No doubt the hon. Member remembers that description.

I congratulate the hon. Member for Mitcham (Mr. R. Carr) for the grand work that he has done as Chairman of the Estimates Committee. In its examination of War Office witnesses this Committee has brought out a point that is not often realised, namely, that the War Office, with its responsibilities for our military defences today, is probably the most complex scientific and technical institution in this country. There is a terrific amount of highly technical scientific work being done in the defence services. The questioning of War Office witnesses brings out the overall picture of this very complex institution, which carries with it a good deal of overhang from an age when military matters were not so scientific and technical as they now are.

In Question No. 131 reference was made to the decentralisation of the War Office departments which are now in the County of London. The witnesses gave evidence that the War Office in London was split up into different buildings; that accommodation was very difficult: that London was overcrowded, and that it was difficult to have the proper liaison between offices which are miles apart. At the end of the answer to Question No. 131 it is pointed out that The centre of London is becoming more crowded, and it is more difficult to find office buildings in it. If that is the case, is it not time that we decided to get the War Office out of this overcrowded area? If the Secretary of State for War gets in touch with hon. Members representing Scottish constituencies they will be able to tell him exactly where he can put the War Office.

Mr. Emrys Hughes

Do not bring it to Ayrshire.

Mr. Bence

Edinburgh will suit us. It would be quite adequate to bring the War Office from this overcrowded area to Edinburgh. We have buildings available in Edinburgh. It is a lovely city, in the centre of beautiful country. We can assure those residents in London who now serve on the civilian staff of the War Office, travelling to work in crowded buses and trains, that if the War Office is moved lock, stock and barrel to Edinburgh it will be to their cultural advantage and will improve their efficiency.

My other point concerns research and development, and the turnover in the tours of duty served by officers and by civilians. If my memory serves me right, it is five years for civilians and two to three years for serving officers. I have had no experience in the Army, but I have had experience in an industry manufacturing goods for the Army and for War Office departments. Before I left the industry we very often had projects coming from the War Office, the Ministry of Supply and the Ministry of Aviation which were most difficult to manufacture—because an important feature in the design of any project, for any purpose is the possibility of its efficient, accurate and speedy manufacture.

It may be that "waste" is the wrong word to use, but at any rate much of the high cost of development involved in a project is often caused in the design stage, through the failure to ensure not only that it can be used but that somebody can manufacture it. There has been mention of the crossbow and the bow and arrow. Probably in those days, when the question of armour or chain mail arose, and someone thought of the idea of using it in defence or attack, the problem which confronted the planners was whether the blacksmith could make it.

In the Admiralty there is a close liaison with shipbuilders. There is an Admiralty Committee on the Clyde. But in the Report of the Estimates Committee in Appendix I there is a reference to the Weapons and Equipment Policy Committee, the Combat Development Committee, the Logistic Development Committee, the Equipment Quantities Committee and the Committee on Capital Facilities for Scientific Establishments. I do not see one which is connected with industry, and yet that raises the most important and difficult problem of them all.

The most difficult problem which faces industry is that of producing a project which has been demonstrated and tested. Often this proves to be a most wasteful operation. I well remember that in 1939 we discovered difficulties in carrying out a manufacture according to specifications which we had been given. But before we could introduce the necessary modifications the matter had to be submitted to the Ministry of Supply which was then under the direction of Lord Beaverbrook. I recall that we were given a specification in relation to the shell platform for a gun magazine. It proved impossible to work to this specification and I remember the discussions on the matter because I was on that occasion the production engineer.

In my opinion there should be a subcommittee, including a production engineer of the highest quality, to deal with the production of weapons and other devices manufactured for the use of the War Office. It requires someone with an idea of the problems relating to the mass production of such projects.

In the Report there is mention of witnesses who gave evidence regarding tours of duty. I speak from the industrial point of view and with experience of what goes on in a factory. From that point of view, to refer to a tour of duty lasting for three years in connection with, the development of a project is just not good enough. It is not sufficient that a team engaged on a certain project should include a person whose tour of duty may last for five, six, seven, eight or ten years. It is necessary to have a team which works together continuously. If the membership of the team is changed it is likely that psychological difficulties will be encountered.

Industrial research and development promotes complicated and difficult problems which have to be faced by committees dealing with the production of the sort of dangerous and highly sensitive instruments which are used in war time. So the continuity of teamwork and the cohesion of a team is more important in that respect even than in regard to manufacture in private industry.

Mention has been made of motor car production. The company for which I work included men on the staff who had been with the company since 1917. I myself worked for over 20 years with that firm and often in company with the same people. That sort of thing is common in private industry in good organisations. It is essential to have that set-up in the development and research associated with the creation of new ideas or the evolving of a new project. Even there it is not so vital as it is in regard to the production of projects for the War Office, the Admiralty or the Air Force where highly-technical and dangerous weapons are needed.

Therefore, the idea of a tour of duty in connection with this sort of research and development is wrong, and I think it should be altered. Perhaps it would be better if more civilians were brought in. Perhaps the main team should be composed of those with experience in the use of military equipment; those who know the context in which the equipment will be used.

People of high calibre from industry engaged in production techniques at the top level should be brought into these committees, perhaps on a part-time basis. If they were brought in I believe that millions would be saved because the projects would be developed in co-operation with the people who produce them. I emphasise what happened in my own experience. I shall not mention the project, but I remember one in 1939–40 which cost £2½ million to develop and £41½ million to tool and get into mass production. I am certain that, had production engineers been brought into the process of evaluating the prototype, much of that money could have been saved in the production process.

I appeal to the Secretary of State for War that in this problem of linking up development and evolution of a prototype through all stages, production engineers should be brought in from centres of production where the product is likely to be made. The War Office will not produce these projects; it will put them out to contract. For goodness sake, let us have some co-operation and co-ordination so that there will not in future be the frightful waste there has been in the past because at that level there has not been full consultation with the War Office or the Air Ministry with production engineers concerned with modern techniques of the production of this sort of thing.

9.8 p.m.

Mr. R. T. Paget (Northampton)

I wish to join my voice to what has been said in regard to the performance—

Notice taken that 40 Members were not present; House counted, and, 40 Members being present—

Mr. Paget

That seems to have taken two of the five minutes I had available to me. I was about to say how much hon. Members on the Committee should be congratulated, both on its work and on their performance in the House today. We have heard a series of quite admirable speeches from members of the Committee who applied their minds to this subject.

The only point which I shall make—and I shall make it very shortly—concerns the last of our recommendations, and one which I believe is the most fundamental of all—that the time has passed when we should have separate defence Ministries. The time has come when we should have a single Minister of Defence responsible for the Services. That seems to me to be the primary conclusion here.

The other conclusion is one in which I have a certain amount of sympathy with the War Office. A tremendous attack has been made on them, for it is almost unprecedented that a Committee should reply with such scathing comment upon the Ministry's answers; but I believe that these answers which were so patently inadequate are perhaps more the fault of the Treasury than of the War Office. Here we have a system in which expenditure is supposed to be watched and controlled by the Treasury, but it is a system which within the complexity of the modern Service Ministries has completely broken down. It does not work. I believe that the time for Treasury control here has gone.

We no longer start from Estimates and build up to a total; we start from a total and build down to expenditure. What happens is that the Cabinet decide what can be devoted to defence. There follows the apportionment between the Services by the Minister of Defence, but in fact it is a process of hand bargaining between the Chiefs of Staff, and that hard bargaining is directed far more as to the need for the particular Service which they are serving than as to the defence requirements of the country. We then get, a figure allocated to the Services. At that point we have the preliminary Estimates. These are only a bid for a share, Then it all begins. When the share comes, there is the breakdown as to what the expenditure is.

There are tremendous disadvantages here. There is no rational distinction between capital and income expenditure. There is the hand-to-mouth problem that there is very little point in putting in labour-saving devices which may save in future years but will not affect the year's Estimates. There is a problem of backlog, and over and above that there is the frightful delay. This is what worries me more than anything. Under this system it takes two years for proposals to get even into the Estimates. That is the fundamental reason why what we get is obsolete even before we get it. To take the simplest example, I do not know whether the Army has its first transistor, yet nobody outside the Army has a radio which works by anything except a transistor. We get delay and obsolescence.

I think that the accounting officers of the Services should be responsible to the Minister of Defence, and not to the Treasury.

Defence expenditure is settled arbitrarily by the Cabinet on the basis of a lump sum which our economy can afford and our foreign policy demands. The Service Estimates are derived from this predetermined total, and this being so the real purpose of Treasury control has gone. The Minister of Defence should have the right to allocate expenditure within the predetermined sum which should be paid to the Service Ministry as a grant in aid. An expert committee drawn from both the Civil Service and business and industry should be established to review the methods of financial control within the Services and bring these methods up to date. In particular they should be asked to consider means of financing the capital expenditure of the Forces in such a way that a coherent capital programme is possible.

In other words, I believe that the time has come when these great enterprises—that is what they have become—should be run in the modern way which we devised when we had nationalised industries and not in the ancient way which emerges from an Act of 1861. It is time that we had a far, far more fundamental review of this whole problem than even this most helpful Committee has suggested.

9.16 p.m.

The Secretary of State for War (Mr. John Profumo)

Perhaps it would be for the convenience of the House if I intervene at this stage. I should like to take the hon. and learned Member for Northampton (Mr. Paget) up on one of his interesting pieces of crystal gazing. He seemed to think that we should have an enormous great Ministry of Defence to run our organisation. I want to ask him one practical question. The hon. Member for Dunbartonshire, East (Mr. Bence) suggested that my Department might perhaps move to Edinburgh. I do not know whether he would be able to encompass the whole sphere of a new Ministry of Defence up in Edinburgh. I do not know where else in London the hon. and learned Gentleman thinks we might house such an enormous organisation. There are these practical problems. Perhaps I may deal with them in more detail later.

Mr. Bence

We will help the Minister get them in Edinburgh.

Mr. Profumo

We have had a very interesting debate and I am most grateful to the House, and especially to my hon. Friend the Member for Mitcham (Mr. R. Carr) and all the members of the Estimates Committee for the attention which they have devoted to the problems of my Department and the many valuable points which have been raised.

Before I come to the issues of detail, I want to say a word about the comments which appear in the Report. Every suggestion was most carefully examined by whichever Department was concerned. Some of the recommendations were recommendations which I had foreseen. Others were not. In each case we examined our whole position afresh in the light of the evidence, the text of the Report, and the combined experience of our several Departments. In our replies we tried to give a clear, concise statement of our view without seeking to obscure the issue or to pretend that there was no difference between us if there really was a difference between us. In doing this, it was necessary in some cases to refer once again to the points which had been given in evidence.

In spite of what my hon. Friend the Member for Mitcham says, I do not see how this could have been avoided, because if it could have been avoided it would have meant that the witnesses had failed to give the Committee in the first place all the information that they had in answer to its inquiries. Where new points have been produced in the Report, they were dealt with to the best of our ability, as I hope to show when I deal with the recommendations individually. Where our assessment of the nature of the problem and the best way to solve it—that is what the Committee has been trying to get out—differed from the Committee, with the greatest respect I must say that I think it was right for us to set down the relevant factors as fully as possible.

There were 20 recommendations in the Report concerned with my Department in whole or in part. I should like to give the right proportions of what was accepted. The hon. Member for Aberavon (Mr. Morris) did a good deal of work over the week-end, but I think he got his numbers slightly off beam here. Out of the 20, five were accepted with qualifications. Only six of them after the most careful consideration I felt unable to accept. Nine recommendations were accepted in full. I must confess that my right hon. Friends and I were a little at a loss to understand why some of our replies, which we thought accepted the Committee's recommendations either in full or with some qualifications which we felt were necessary, were singled out for special mention as being unsatisfactory. Perhaps the most unexpected comment was the reaction to my appointment of the Nye Committee. Here we set out to meet in every detail the wishes of the Committee, at any rate as we understood them from the questions they asked when taking evidence.

At the time when I submitted my formal observations, the actual terms of reference had not been settled. I shall have something to say about the Nye Committee later, but I make these remarks as a reply to my hon. Friend the Member for Mitcham and I understand his feeling that it would have been easier had we explained the full text of the terms of reference at the time. However, as I have said, they had not been settled.

In this matter we were in full agreement with what we understood to be the Committee's views. If in this and some of our other observations we failed in communication or in style and we gave the wrong impression, then this is my fault and I very much regret it. On looking at our observations again I think that we may have aimed a little too much at compression and at the use of plain words but, if that is the case, at least this is the fault of which Government Departments are not generally accused.

I should like now to deal with some of the criticisms in the Report. I will start with those to which our answers did not appear to give entire satisfaction and, for convenience, I will take them in the order in which they occur in the Report. First, Recommendation No. 2. The basic problem, as I see it, is this. The primary object of an Army is to be able to fight and, generally speaking, the officers are there to lead.

The old German idea was that one had a general staff of officers and that once one got on that general staff one stayed there. That may be the sort of system of which my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) would approve, and with it we certainly could do what the Committee had in mind. However, this has never been thought to be the right answer for our Forces in this country. We have always believed that an officer should divide his time between command and staff and that the senior commanders should be men who have experience in all fields. If we are to continue to do this—and I say "if"—We would be hard put to it to leave an officer in a staff job for more than about three years at a time.

If an officer is to get on he normally spends about four years in the rank of lieutenant-colonel and, as the hon. Member for Walsall, South will find about his distinguished brother, about four years as colonel or brigadier. If he is to get any field experience at all in these ranks we must not keep him for too long in staff appointments. As my hon. and gallant Friend the Member for Chelsea (Captain Lichfield) recognises, there are distinct advantages, perhaps for the War Office more than any other part of the Army, not to keep them in staff appointments for too long. For my money give me staff officers who have had recent experience of the sharp end.

Further, the more they move around, within reason, of course, and get wider experience, both in the field and in different staff appointments, the better their value. On the technical side—and I recognise at once that it is more the technical side that hon. Members have in mind—continuity is maintained by professional and technical grades in the Civil Service, who remain in their appointments for considerable periods and there are, in fact—to answer the hon. Member for Dumbartonshire, East —production engineers on each one of the projects in the Master General of Ordnance's Department.

As the hon. Member for Mitcham said, this is all a question of balance. It is exactly that and I accept that it is. One of the tasks of the Nye Committee will be to examine the possibility of going further with the principle that posts, where continuity is required, should in general go to civilians and, where fresh military experience is needed, we should go for soldiers; and I realise that this is what the Estimates Committee really wants to happen.

I wonder if there may not have been some misunderstanding about our reaction to Recommendation No. 5. It seems to me that what hon. Members are really asking for is that the responsibility for establishments should not be vested in a whole mass of committees but that the Director of Establishments himself should have more power.

There is, in fact, only one Establishments Committee which is concerned with regular establishment control. I think that hon. Members would have liked, the Director of Establishments to have been all-powerful above this Committee, but unless we change the whole system by which the Army has traditionally been run, I do not think that this is possible. All the members of the Army Council have well-defined and far-reaching responsibilities for which they are individually and directly responsible to me. Among these responsibilities, are, of course, the establishments in their own individual departments, and I look to them directly for the utmost economy and efficiency.

So it really would be impossible for anyone below the level of the Army Council to have any overriding authority. What happens is that if there is a disagreement on the Establishments Committee, the matter is referred to a number of directors who are appointed by the various members of the Army Council who have to deal with establishments. As my hon. Friend mentioned, these are called the chartered directors, and one of these directors is the Director of Establishments himself. It may be that they do not meet as a formal committee, but all have adjacent offices and these things are very largely done in order to save time and make for efficiency. That is what happens. It is done by minutes. If there is a disagreement here, the Director of Establishments has a veto and has the right to refer the problem to the Army Council, and, therefore, to me. I do not quite see any other way in which this very complex problem can be effectively and collectively dealt with.

I hate to enter into controversy with anyone who has as much knowledge as the hon. Member for Glasgow, Craigton (Mr. Milian) about accounting systems, and I should hate to cross swords with him, but the difficulty about Recommendation No. 9 seems to be that the Army accounting system, in the same way, I am sure, as the great majority of those of other Government Departments, is based on the requirements of Parliament—that money voted for a purpose shall be used only for this purpose. If we are to carry out this responsibility properly. I do not see that our auditors in commands need the professional qualifications, which, incidentally take about five years to gain, so much as an intimate knowledge and understanding of the Service and of the command in which they work.

Let us stand for a minute behind the chair of the auditor looking at thousands of work tickets to see what happens. What he has to do is to see whether the work sheets represent what he knows from experience to be the proper tasks. He does not need, with respect, the same sort of experience and knowledge which the hon. Gentleman has of balance sheets, profit and loss accounts, differentiations between capital and revenue, matters of taxation and similar considerations which are the substance of the ordinary run of commercial accounts. What he does want to know is exactly what the rules are about the use of the transport of which he is examining the work tickets and what sort of jobs the unit under review should properly be engaged on.

Hon. Members have referred to financial advice. It is my view that financial advice to a commander is best given by someone trained and experienced in the Army and its ways on the one hand, and, on the other, in the requirements of Government accounting. In our reply, we drew special attention to the importance of training, and I must emphasise this point. I am satisfied that in the War Office, as in other Government Departments, audit work is appropriate to members of the executive and clerical classes of the Civil Service, and they can discharge and are discharging it with full competence after training. Indeed, only two years ago, the Comptroller and Auditor General—who is not appointed by me but by Parliament—spoke publicly of the essential differences between the function of accounting in Government and in commerce, and concluded that the control of Government expenditure would not be assisted by the adoption of commercial accounting methods.

I turn now to Recommendations Nos. 11 and 12. I know how strongly the Committee feels about the importance of costing, and I entirely agree that it is one of the most important tools of management—perhaps even more important in Government than in private business. Therefore, we must apply the touchstone of cost all along the line. Here, we are not in any dispute at all, but what I feel that I did not succeed in explaining to the Committee is that this very specialist operation known as costing, employing for the most part technically-qualified staff with special training in the art, does not represent the total of our effort in applying this technique.

For example, we have just installed an automatic data processing system for dealing with Army pay, and we are working with further installations of this sort to deal with stores, as well as other measures of mechanisation. But these decisions are decisions of management, and in each case they are taken only after a full calculation has been made of the comparative cost of the old systems and the alternative systems. But these calculations do not really require the use of a special costing staff. They are based on figures of man-hours, machine time, capital and running costs, and so on, carried out by 0 & M.

I think that the point at issue is whether or not we should introduce into the War Office a new director—a Director of Costings. I must say quite frankly that nothing would have been easier than that I should have accepted that recommendation. No one in the War Office would have been the worse off for the creation of a new director's post with a ready-made staff to take over and, I have no doubt, some temptation to increase it. Some people would have been relieved of their existing responsibilities, but I do not believe that anyone at the level of director could do what I know the Committee really has in mind. That is the reason for the existence of the Costings Policy Cornmittee, presided over by a deputy-secretary. That is the lowest level—that is to say, just below the Army Council —at which decisions of this kind can properly be taken. A director is a whole level lower than a deputy-secretary, so I think that we are half way to meeting the Committee.

What of the other half, namely, the feeling that it is wrong for these problems to be solved by committee? In view of the strong feeling of the Committee, I am proposing to give new instructions to the deputy-secretary concerned to the effect that the responsibility for these matters is fairly and squarely on his shoulders, and that the Costings Policy Committee exists only to advise him, and that any future decisions shall be his decisions and not those of the Committee as such. I hope that with these explanations, the House will feel that the point the Estimates Sub-Committee had in mind has now been met.

Next, we come to recommendation No. 15. We have accepted this, but I think that the Committee did not fully appreciate my reservation, which amounts simply to this. In the case of intramural expenditure, although we told the Committee that broad estimates had recently been made for certain big projects, hitherto there has not been a drill for preparing detailed estimates. This problem applies not only to new projects but also to those already on our books. I have agreed that this should be altered.

The reason I chose £¼. million as a starting point is that there are at the moment about 800 projects concerned. Most of them are quite small and, with the best will in the world, if we are not to divert a wholly disproportionate amount of our effort in this direction, we have to introduce this new system by degrees, and it seems sensible to make a start with the big money. This initial batch will cover nearly half the money we spend annually on development which, for a start in this difficult task will, I hope, be thought satisfactory.

The Committee expressed some apprehension about the Nye Committee and whether it would really be given the chance of doing the job which it had in mind. May I remind the House for one moment of the breadth of experience of those unofficial members who, I am happy to say, have accepted my invitation to serve on the Committee? First of all, there is General Nye, a most eminent officer of considerable experience both of the Army and of the War Office, a distinguished pro-consul and now a leading industrialist. Then we have Mr. Harald Peake, the Chairman of Lloyds Bank and late Chairman of the Steel Company of Wales. He is now so renowned and so respected in business circles as to need no further introduction. In addition there is Sir Owen Wansbrough-Jones, who has an almost unrivalled experience of academic and Service life.

When I announced the Committee, the terms of reference had not been finally decided, but now perhaps the House would like me to give them in full. They are: (1) To examine the functions of the War Office, its organisation and the distribution of duties within it, and to report to the Army Council. This is the first and main section of the terms of reference referred to by my hon. Friend the Member for Mitcham. If hon. Members on both sides of the House chew over that term of reference, they will find that it covers absolutely everything, and I am sure that that was what was in the mind of the Estimates Sub-Committee. It is comprehensive and allows the Committee to deal with any factor which it thinks bears upon the efficiency of the War Office.

I have been listening most carefully to all the arguments and points made in the debate and totting them up in my mind to see whether I could find one which would not be covered by this term of reference. I do not think that any hon. Member would find one, and I am convinced that Sir Archibald Nye would look at it in that way.

Mr. Bence

What about moving the War Office to Edinburgh?

Mr. Profumo

Whether this Committee will feel it is right to move the War Office from London to Edinburgh is a matter which I will not prejudice in advance, but certainly the Committee could look at that matter and no doubt would read the hon. Member's speech.

The remainder of the terms of reference deal with points which were referred to in the Eighth Report which we want to make sure are among those which the Committee chooses for examination. The fact that these points are included does not in any way qualify the first section.

The rest of the terms of reference are as follows: (2) To report specifically on the following:

1. (i) the organisation for formulating requirements of equipment and for research, development and production;
2. (ii) the possibility of reducing the number of senior positions held by military officers, particularly in posts whose functions are of an administrative rather than a policy-making nature:"—

That seems to fit in fairly well. (iii) the practicability of making more senior positions in the War Office open to civilians as well as to military officers. This is another important point which the Committee had in mind.

The next term of reference is: (3) In considering the organisation of the War Office the Committee should have regard to the need:

1. (i) to reduce total staff to a minimum;
1215
2. (ii) so to arrange the distribution of duties as to allow for removal of staff from Central London conformably to Government policy for departments generally."

I think that this would take the point which the hon. Member for Dunbartonshire, East (Mr. Bence) had in mind. (4) The Committee should base their recommendations on the central organisation for defence in being at the time they report. They should however examine and report on the extent to which the War Office is organised and equipped to play its full part in that organisation. They should also inform themselves of any current proposals for changes in this field and draw attention in their report to the way in which such changes would affect their recommendations. This last paragraph, which I think will be very much after the heart of the hon. and learned Member for Northampton, was included because we are very conscious that the War Office is only a part of a larger organisation, and, as has been explained to the House on several occasions, the whole machinery of central defence organisation is constantly under review. I hope that my hon. Friend the Member for Mitcham will welcome this. I felt it essential to give General Nye this guidance in this respect so that we should be what I think is called à la page.

The Committee over which General Nye will preside will, therefore, cover Recommendations Nos. 1, 3, 4, 6 and 14. I do not think that we have left anything to chance.

I will conclude by saying a few words about the War Office itself. I think that it was Lord Asquith who said that the War Office kept three sets of statistics: one to mislead the Cabinet, one to mislead the public, and one to mislead itself. We have come a long way from those days. I assure hon. Members that we dropped that little habit a long time ago. The War Office is constantly under fire. It is often lampooned. It has been described in a whole host of different ways at one time and another. The most recent comparison I heard was with an elephant.

Perhaps it is true that the War Office does take about two years to give birth to something. The War Office is certainly very large. It is powerful. It is proud. It does not like to be hurried. It is sensitive. It carries huge burdens. Once it has learned a lesson, it does not often forget. Perhaps the most important part of the comparison is that it has been trained so as to be able to respond to changes of course and environment which might well appear to be beyond its power of manoeuvre. The truth is that the War Office is far more flexible than might appear to anyone who is not working inside.

In the last three years, the War Office has undertaken three major changes of course, the addition of part of the Ministry of Supply, which involved the transfer of over 2,500 people, the civilianisation of its works organisation, and now the transfer, which is about to take place, of this organisation to the Ministry of Public Building and Works. Moreover, during this period it has been reducing its numbers and learning to adapt itself to the needs of an all-Regular Army.

Within the Department itself, we are constantly studying ways and means of improving the set-up still further. No large administrative headquarters can possibly be perfect. In the War Office, we all know this. We realise that there is a lot of scope for improvement, so we really welcome the opportunity of the sort which the Estimates Committee has given, and which the Nye Committee will now give, of a fresh look by people who are not involved in the day-to-day work of the machine and can, therefore, think more objectively about the design.

Of course, we have to look at all this in the context of the size of the Army and its civilian backing which the War Office administers. With a smaller Army, one requires smaller overheads, and the War Office is part of the overheads, but we must remember, nevertheless, that the modern Army, even if it be smaller than hitherto, now uses immensely complex equipment and has a welfare state of its own which it carries about the world with it, with all that that means in administration. The Army also has to link very much more closely with the other Services, and it plays a great part in the international field.

All this generates a much greater load of administrative work at the top than was the case before the war. What is more, because of our democratic system and the speed of our communications, answers are always wanted at once. This, perhaps, explains in part why it may appear to be a little top-heavy and to have more senior people responsible and able to give decisions than might appear right in some people's eyes at first sight.

In spite of this, we did in giving evidence explain that the War Office had reduced its strength from 6,814 in 1956 to just over 6,000 in 1960. Then, we took over some staff from the Ministry of Supply, and started reducing again, coming down from 8,400 to the 7,700 we have today. This represents a reduction of over 8.5 per cent. in under three years. I believe that this would be quite a feat even for a large private business concern.

I have given instructions that we should cut still further, this time to about 7,000, as soon as possible. This will mean a further reduction of nearly 10 per cent. I say to the hon. Member for Aberavon that this may be regarded as an arbitrary cut, but I have set a target for the War Office which I believe is realistic and which we can achieve. It is something which it would be right for us to work for. What matters is that we are showing that we are continuously trying to cut still further and we are never satisfied with the fact that we have managed to cut in the past.

I hope that the Nye Committee will help us in this and perhaps will find it possible to suggest even further savings. If it thinks there are too many senior officers and officials, it will say so. But I totally reject the disreputable accusation of the hon. Member for Aberavon that we are just creating jobs for senior officers and senior officials. I am sure that when he reads his remarks he will find that they do not match up to the usual contributions which he makes in this House, and I do not believe that he meant them.

When one considers that my Department is responsible for controlling about 400,000 soldiers and civilians and, as my hon. Friend the Member for Mitcham said, for a total annual expenditure of well over £500 million, for 13 Royal Ordnance Factories with an annual turnover of about £30 million, six research and development establishments, and for a large number of schools, hospitals and other installations as well as military intelligence and operational planning, I do not think that its size can be said to be self-evidently exces- sive. Of the 7,700 people who form the present strength of my Department, over 1,000 are on detached duties in places from Edinburgh to Hong Kong.

Finally, the House might like to know that by way of Christmas salutations I have sent to all members of the Nye Committee the Eighth Report of the Estimates Committee and the Third Special Report, and this will be followed by the OFFICIAL REPORT of today's proceedings, so that all the members of the Nye Committee may be fully seized of the feelings of the House before they start their important deliberations. I am sure that hon. Members would want to join me in wishing them well in finding further solutions to the immensely intricate and difficult problems of the War Office so that our modern Army is served in a way of which it can be proud and so that, although it may be a little smaller than in the past, it proves a just successor to the Armies of which we have been so proud in the past.

9.48 p.m.

Sir Godfrey Nicholson (Farnham)

It would be churlish of me if I did not begin my few words by thanking my right hon. Friend the Secretary for State for his speech. He gave evidence not only of great devotion to his task but of profound knowledge of his subject. If only he had given the Estimates Committee the full details of the terms of reference of the Nye Committee which he has given tonight (there would have been no debate.

My right hon. Friend compared the War Office to an elephant. I suppose that he is the mahout sitting on top. It is his job to stick the ankus into the top end of the elephant. The Estimates Committee's job is to stick the spur into the other end of the mahout. I cannot help feeling that if we had not stuck our spur in we should not have had the very forward-looking approach of which my right hon. Friend gave evidence tonight.

This has been a very good debate. The value of debates is not to be judged solely by the attendance of hon. Members. In spite of a very small attendance tonight, this debate has served a useful purpose. I was not able to attend all of the Estimate Committee's meetings—I had other Sub-Committees to attend—but I was convinced that those which I did attend justified the tributes which have been paid to my hon. Friend the Member for Mitcham (Mr. R. Carr).

It was a very good inquiry, but a very difficult one, because we had such good witnesses. They were all such terribly nice chaps who were devoted to their Service and so full of loyalty to the Army. One of the difficulties of this whole subject is that it is permeated by loyalty. Every individual who works in the War Office feels loyalty towards the troops in the field. My right hon. Friend feels loyalty towards the Army, and this very loyalty, admirable as it may be in itself, has tremendous dangers. It tends to obscure the fact that we are dealing with quite a different War Office and Army in 1962 to any that we have had before. I thought that the parallels that my hon. Friend the Member for Mitcham drew of the creation of the Jaguar motor car and the need for continuity in expert advice and service in the War Office were very true and typical of the whole approach.

I do not want to overstress the work of the Estimates Committee. It is just as big a mistake to be over loyal to the Estimates Committee as it is to be over loyal to existing methods in the Army, but I must say that the Estimates Committee drew up a very formidable indictment. The Committee is not out to criticise, it is out to help; but it felt that things were very seriously wrong, and although I have welcomed already the approach of my right hon. Friend tonight to the Nye Committee, I feel compelled to say that as yet the remedy of those failings is only a matter of promises and not of performance.

I make no apology for the Estimates Committee in having followed up these replies of the War Office and in giving the comments at the end of the Special Report. I hope that it will be a warning to other Departments that we shall follow up the replies of Departments. Before we had the chance of having these two days' debate a year on the Estimate Committee's Report it was the custom that the Estimates Committee reported, the Departments replied, and that was that. The replies of the Departments were merely accepted, with regret very often, but they were not commented upon in this House. Now we have the chance of these two debates every year on the Estimate Committee's Report, I hope that it will be recognised by all Departments that we mean to follow up. I hope that it will be recognised by the War Office that in the course of a few months or a year we shall be asking the War Office for a progress report on the very matters that we have been talking about tonight, so do not let any Government Department, still less the War Office, think that the Estimates Committee will allow the grass to grow under its feet.

I said that it was a formidable indictment and a fairly weighty indictment that the Estimates Committee drew up, and at the end of this short debate I think it would be a good thing if I summarised its main sources of anxiety, as found in the concluding paragraphs of the Report. These questions have been dealt with in every speech, but I make no apology for summarising them. These are, first, the overall preponderance of military personnel in the War Office and the comparatively short tours of duty of the senior officers. I think that somebody at some time has to make up his mind what the main objective of the various Departments in the War Office is. If the main objective of the more scientific departments is the production and development of scientific weapons, I believe that the present short terms of duty not only of military officers but of civilian officers cannot be sustained.

Our second cause of anxiety was the number of committees. In the course of our inquiries we found committee after committee, and when we asked when these committees met we were told that they met very seldom indeed. I do not think that my right hon. Friend should allow himself to be fobbed off by being told that a committee or a series of committees is being appointed to deal with certain questions, whether it is redundancy or anything else. One cannot run a great business by appointing a number of committees unless one ensures that these committees meet regularly and report regularly to somebody else. After the inquiry I was left with the impression that this did not happen in the War Office.

A still more serious indictment which runs parallel with the observations and recommendations of the Zuckerman Committee is the tardiness of the War Office in improving the costing of its control procedure, and in this the Treasury is not altogether acquitted of responsibility. The question of extra mural costing was first discussed with the Ministry of Supply in 1958, and with the War Office in 1960. It seems that some people were dragging their feet.

In spite of all the generous things that are rightly said in this House about the Army, the War Office, and, indeed, the Treasury, the basic fact remains that these three points and several others caused acute anxiety to a Committee of Members of this House. I do not claim that Members are more intelligent than others. They are, however, more experienced, and when seven or eight Members spend some months examining witnesses and deliberating amongst themselves, aided by expert advice provided by the staff of the House, impartial people coming fresh to the subject, and then feel profound anxiety on such a large number of subjects, I do not think that these anxieties can be brushed aside easily, and I hope that the Nye Committee and my right hon. Friend will take the anxieties of the Committee seriously.

We do not profess to be infallible. We make masses of mistakes. We deiliberately stick our necks out. We deliberately throw ideas into the air, expecting many of them to Abe shot down, but if I were my right hon. Friend I hope that I would look again at some of my preconceived notions, many of which spring from the most admirable loyalty to the Service for which he has the honour to be responsible.

Then the Committee stuck its neck out still further and departed wildly from its terms of reference—which is a very good thing to do occasionally—and expressed doubts about whether it was necessary to retain separate Service Headquarters Departments. If it was out of order for the Committee to consider that, no doubt it would be out of order to refer to it tonight, but I hope that the spirit of inquiry which rightly pervades the Estimates Committee will pervade the minds of all those who are responsible for long-term thinking in military matters. I hope that there are people responsible for long-term think- ing. I hope that my right hon. Friend and his senior officers and senior civil servants are not so immersed in the day-to-day problems of Army administration as to be unable to devote long-term thinking to these matters.

Finally, I hope that my right hon. Friend, for whom the House has a great affection, and who has a great loyalty to those for whom he is responsible, will not let that loyalty completely blind him to the fact that a Committee of Members of the House came back from its inquiries deeply disturbed.

Question, That the words proposed to be left out stand part of the Question, put and negatived.

Proposed words there added.

Main Question, as amended, put and agreed to.

Resolved, That this House takes note of the Eighth Report of the Estimates Committee in the last Session of Parliament relating to the War Office and of the Third Special Report of the Estimates Committee.

Committee Tomorrow.