HC Deb 24 April 1967 vol 745 cc1160-5
The Minister of Technology (Mr. Wedgwood Benn)

With permission, I should like to make a statement about the independent inquiry which my hon. Friend the Minister of State announced on 5th April would be instituted to examine the circumstances of the Bristol Siddeley case.

The Committee of Inquiry is being set up jointly by my right hon. Friend the Chancellor of the Exchequer and myself. Its terms of reference will be: To investigate the circumstances of the pricing of certain contracts for the overhaul of aero-engines in the period 1959 to 1963, leading to repayment in March 1967 by Bristol Siddeley Engines Limited to the Ministry of Technology; and matters relating thereto; and to report to the Chancellor of the Exchequer and the Minister of Technology as soon as possible. The Committee should feel free to make any recommendations they may consider necessary, in the light of their inquiry, on the need for further investigations into any aspects of Government contractual operations; or to request an extension of their terms of reference for this purpose. As in the case of the Lang inquiry, this will be a committee of three. I am glad to say that Sir Roy Wilson, Q.C., the President of the Industrial Court, has accepted our invitation to act as chairman. He has wide experience of the conduct of committees of inquiry.

Sir Leslie Robinson and Mr. C. J. M. Bennett have agreed to serve as members. Sir Leslie had many years of Government service and since he retired from the Board of Trade in 1963 he has been in industry. Mr. Bennett is a partner in a well-known firm of chartered accountants and has considerable experience of official inquiries.

It will be seen that the Committee's terms of reference have been so drafted as to require it in the first place to investigate all the circumstances of the case itself; and to leave it open to the Committee, if it sees fit, to propose either that the Committee itself should go on to examine wider aspects of Government contracting or that some other body should be required to do so.

It is hoped that the Committee will be able to produce a first report by the end of July this year.

Mr. R. Carr

As the right hon. Gentleman knows, we on this side of the House strongly welcome the setting up of this inquiry. The size of the Committee and its membership seem to us to be highly satisfactory. May I put one question to the right hon. Gentleman about the terms of reference? Does the phrase "matters relating thereto" definitely enable the Committee to inquire into all the events subsequent to 1963, up to and including all that happened before and after Easter this year?

Mr. Benn

The phrase "matters relating thereto" was put in so as to be sure that the Committee did not feel its terms of reference to be restrictive upon it in any way. I would like to say that I am grateful to the right hon. Gentleman for so associating himself with the need and the character of this inquiry.

Mr. Dalyell

Will my right hon. Friend confirm that we do not have to wait till July for Government action on the question of equality of information which came up from the Lang Report?

Mr. Benn

As my hon. Friend knows, this is a matter which is the subject of consultation between the Government and the C.B.I. He is quite right in supposing that there is no necessary connection between this inquiry and that issue.

Mr. Lubbock

Do the terms of reference permit the Committee to inquire into any other case of over-charging which may come to light quite apart from the Bristol Siddeley one? As he knows, strong reference has been made in the House to other possible cases of overcharging.

Mr. Benn

The terms of reference were so drawn as to invite the Committee to look first at this particular case; in the latter part of the terms of reference special provision is made to enable the Committee itself to recommend what it thinks should happen next. Therefore, this would, I think, cover any considerations of the kind that the hon. Member has in mind.

Mr. William Hamilton

Will my right hon. Friend give an assurance that the setting up of this Committee will not inhibit or delay inquiry by the Committee on Public Accounts?

Mr. Benn

The Committee on Public Accounts is perfectly able to reach its own decision on this matter. The announcement I have made today has no bearing at all on what that Committee may in its wisdom decide to do.

Sir A. V. Harvey

Pending the results of the inquiry, can the right hon. Gentleman say whether the Ministry is making full use of outside consultants about costing, to make sure, if the Ministry cannot take care of its own affairs, that it will get outside advice from people who can?

Mr. Benn

I do not think that that question is really as helpful as, perhaps, the hon. Member had in mind. The problem here is that of getting from the firms with which we deal equality of information, including post-costing, to enable us to have enough information to reach a fair bargain with a firm. It is not a problem of the skill or capacity of the contracting staff. It is a question of getting enough information to permit a proper contract to be arrived at. Outside consultants who have not that information, or access to post-costing, would not in those circumstances be able to help.

Mr. Rankin

When my right hon. Friend said that the Committee would have the power to cover a wider scope than is indicated, was he referring to the number of years which were referred to, and some other aspects?

Mr. Benn

No. I think that I may not have made myself clear. The Committee, in the first instance, is invited to look at this particular case and matters related thereto. That is to say, it has absolute freedom in the first instance to look at any aspect of this particular case. If, at the end of its inquiry, the Committee feels that any further inquiry is necessary then it has the right to recommend that, without coming back in any way to the Chancellor of the Exchequer and myself. The Committee has all the freedom it needs to look at this particular case, including the lapse of time which occurred between the first report and the final one.

Mr. Onslow

Is it or is it not the Government's intention to make any change in the defence contracting procedure before this Committee reports? Can the right hon. Gentleman say whether he has yet been able to establish whether there is any other case which may be referred to this inquiry? Will the inquiry be able to conduct an investigation into the behaviour of the Minister of State and the Department in this matter?

Mr. Benn

As far as defence contracting itself is concerned, if the hon. Gentle- man has in mind wider questions than those which affect me he should put them down to the appropriate Minister.

As for the terms of reference of the Committee, as I made absolutely clear in my original statement, the Committee has a right to look at anything it likes.

As I have made clear, and as has been made clear by the Chancellor of the Exchequer on other occasions, the contract procedure cannot be regarded as satisfactory till there is access to equality of information, including post-costing.

Mr. Mendelson

As my right hon. Friend has just announced that discussions on the principle involved are proceeding between the Government and the C.B.I., would he give the House an assurance—it would be a relevant assurance—that till these discussions on the principle are concluded the Government will not enter, without the authority of his Ministry, into any further contracts which are liable to the same difficulties as have arisen in the Siddeley case?

Mr. Bean

I have given instructions that no further fixed-price contracts are to be entered into with Bristol Siddeley without my own personal concurrence. And I am sure that that was right, but I must warn my hon. Friend that the danger of departing from fixed-price contracts is that one would move inevitably towards cost-plus, which is really a much greater danger for the Government.

Mr. Brooks

Can my right hon. Friend say whether the evidence, whether oral or in writing, which is submitted to the Committee, will be published in full?

Mr. Benn

The report will be published, but I think that one must be guided by the Committee itself and that it should decide its own procedure.

Mr. Maxwell

Will my right hon. Friend confirm that he will insist, in the negotiations with the C.B.I., that equality of information will be given, regardless of how long the present Committee will take to report? Can he tell the House whether, under the Committee's terms of reference, he will agree to extend its scope, to look a little bit deeper at better use of the Government's purchasing power to induce industry not to overcharge when it has opportunities to do so?

Mr. Benn

I should make clear to my hon. Friend that these discussions about equality of information and post-costing are going on between the Treasury and the C.B.I. and that they have no bearing whatsoever upon the inquiry into this particular case and will not require to be delayed till this inquiry is completed.

On the wider question of Government procurement, discussions have been going on, and have been for some time, to see whether a general improvement could not he achieved.