Army Supplementary Estimate, 1963–64 (Hansard, 9 March 1964)

§ Mr. Christopher Mayhew (Woolwich, East)
May we have an explanation for the under-spending on Vote 7?

§ Mr. Kirk
The gross sum under-spent of £11.3 million amounts to about 10 per cent. of the Vote. The general reason is production delays, but these result mainly from design and development difficulties in the introduction of new equipment. It is always extremely difficult in this field to foresee at the time of preparation of the Estimate, six months before the year starts, what progress will be made. With a production Vote of this variety and complexity, one cannot hope to be accurate, except by luck. We were unlucky.
Expenditure is not charged to Vote 7 until complete equipments are delivered. 106 Difficulty with one component may hold up deliveries over the whole field. Therefore, no expenditure will fall on the Vote meanwhile.
The Estimate for 1963–64 was particularly difficult to frame because of the unusually large number of new equipments coming to the Services. It is in the later stakes of development and trials that unforeseen snags are liable to occur and setbacks in production can build up quickly. This has happened over stores and equipment where we are overspending owing to a rapid build-up of production. I can answer detailed points if the hon. Member wishes to put them to me.

§ Mr. Mayhew
I am grateful to the hon. Gentleman. He will agree that this is a most surprising amount of under-spending, £11 million consistently over the whole range, A, B, C and D, on stores and equipment. Possibly there may have been a special case of some particular item which was behind and one could understand that, but over the whole range this is very considerable. It strikes a rather ironic note for those who work in Royal Ordnance factories which are to have their production curtailed, such as the R.O.F. in my constituency.

§ Mr. J. Griffiths
And the one at Pembrey.

§ Mr. Mayhew
There is the one at Pembrey. What proportion of this under-spending is on account of R.O.F. production and what proportion on account of private enterprise? Does not the hon. Gentleman agree that it is an extraordinary thing in a year in which Woolwich R.O.F. is being closed down and it might be suitable for the production of some of these items, that we have this fantastic under-spending on stores and equipment?

§ Mr. Griffiths
I am not sure if this is an opportune moment to raise another question about the Royal Ordnance factories, or whether I should raise it on the next Vote.

§ Mr. Kirk
It is a little difficult to break this down as between R.O.F.s and other establishments. The reasons for under-spending are many and varied. For instance, on weapons and instruments £400,000 represents a deliberate 107 diversion of production to India and that goes off the spending by the War Office. There is £2,500,000 connected with production difficulties in relation to Thunderbolt 2, but these could not amount to more than six months in a four or five-year programme. This is simply carried forward. Other items include the American Ranger forklift truck, which was held up by an American dock strike and amounts to £200,000. There was the heavy floating bridge project, which set us back £½ million. It is difficult to pin down the particular cost, or to make an analysis as between R.O.F.s and private enterprise. Perhaps I could write to the hon. Member for Woolwich, East (Mr. Mayhew), or he might put down a Question in answer to which we could give the figures, but I have not got them with me now.

§ Mr. Mayhew
I ask particularly whether there is a shortfall in production of armoured troop carriers by Sankeys. This concerns the whole future of the R.O.F. at Woolwich.

§ Mr. Kirk
I think there has been no shortfall on that.

Schedule
	Sums not exceeding
	Supply Grants	Appropriations in Aid
	£	£
Vote
1. Pay, etc., of the Army	—	^*-1,300,000
2. Reserve Forces, Territorial Army and Cadet Forces	640,000	^*-300,000
3. War Office	160,000	—
4. Civilians at Out-stations	2,480,000	230,000
6. Supplies	210,000	400,000
7. Stores and Equipment	Cr. 8,800,000	^*-2,500,000
8. Lands, Buildings and Works	1,120,000	^*-220,000
9. Miscellaneous Effective Services	8,360,000	170,000
10. Non-effective Services	330,000	^*-70,000
Total, Army (Supplementary), 1963–64 £	4,500,000	^*-3,590,000
^* Deficit.