HC Deb 18 April 1967 vol 745 cc287-90
20. Mr. William Hamilton

asked the Chancellor of the Exchequer what steps he intends to take to ensure that in all contracts with the aircraft industry, Her Majesty's Government shall have access to the firms' accounts, both during and after any contract.

42. Mr. Cronin

asked the Chancellor of the Exchequer what is his policy with regard to obtaining access to contractors' accounts for Her Majesty's Government, both during and after any aviation contract.

Mr. Callaghan

It is the Government's intention to obtain the right to equality of information with the contractor when prices are being negotiated; and post-costing rights where these would be of material help in fixing fair and reasonable prices and in checking that the price-fixing system as a whole is working satisfactorily. Discussion is going on with industry on both points.

Mr. Hamilton

Can my right hon. Friend say how far the C.B.I. has come along to agree with his view and how soon he expects to make a decision on the matter, or is he waiting until the Public Accounts Committee and the independent inquiry report on the matter?

Mr. Callaghan

I hope that negotiations with the C.B.I. will be concluded successfully very shortly, but they are still going on and I cannot say more about the C.B.I.'s views at this stage.

Mr. Cronin

Will my right hon. Friend give some attention to the system of the Department of Defence, United States, which gives very effective incentives towards increased efficiency as well as safeguards against rascality?

Mr. Callaghan

Yes, Sir. I believe there is a close integration of exchange of information on these matters, but perhaps my hon. Friend will question the Secretary of State for Defence on this particular issue.

Mr. R. Carr

Will the Chancellor assure us that he accepts that equality of information, although extremely important, is but one of three links in this problem, the other two being calculations of overheads and profit formula, as was made clear in the Lang Report? Will he make clear that all three will be dealt with? Will he also give proper attention to developing good contracting procedures?

Mr. Callaghan

While I am in favour of the last part of that supplementary question, I am not ready to relate to an agreement all post-costing rights to a revisior of the profit formula. That is a separate issue which can be raised by industry at any time and discussed with the Government, but this information should be conceded in any case.

Mr. Lubbock

Is not one of the recommendations of the Lang Report that equality of information should be obtained by the Government? Why has it taken the Chancellor and his colleagues two years to get round to deciding on this matter in principle?

Mr. Callaghan

I think that is a fair question, and maybe we should have been more ruthless with industry than we have been. If we should have been, I acknowledge our defect in this respect, but we have tried to get their cooperation, and I trust that now we are going to get it.

Mr. Ellis

Will my right hon. Friend he ruthless now? Under the Ministry of Supply Act, 1939, he has power to ask for any books and papers to be made available, and then he has only to ask for a Ministerial Order. Will he make clear to the C.B.I. that he will use that power? Will he use it now?

Mr. Callaghan

This may have to be considered in suitable cases. The power is there if we cannot reach a satisfactory agreement with industry, but it is the job of the Government to work with industry if we can. I would therefore prefer to reach agreement than to use these powers. If it was impossible to get agreement with industry and I thought it necessary in the public interest to use these powers, of course they would be used.

Mr. R. Carr

Will the Chancellor answer my previous question about the calculation of overheads? When he speaks about being ruthless with industry, will he acknowledge that so far as this question was concerned it was February, 1966, before the Government began to get down to the job at all?

Mr. Callaghan

I do not think the hon. Member is right about the date, but if he wishes to have a debate on it I should be very happy indeed to do so. As regards overheads, this might be looked at too. At the moment the Chief Secretary to the Treasury is having negotiations on my behalf. I am concerned to see that public access to information is made available. I stand on that and the other questions can be looked at at any time.