§ LORD WINSTER had given Notice that he would ask His Majesty's Government whether the Minister of Aircraft Production has satisfied himself by personal investigation that a certain aircraft firm of which he has been given the name has the necessary plant, tools and manufacturing capacity generally to enable it to execute the contracts which it has received without recourse to sub-contracting on a scale which militates against efficiency and economy; and, further, if he is satisfied with the progress made with these contracts to date.
§ The noble Lord said: My Lords, I regret taking time at this late hour upon the subject of the question which is on the Paper in my name, but I feel compelled to do so because of the great difficulty which is experienced in getting an answer from Ministers in the course of debates which take place upon Motions. I feel that this is the only procedure open to me by which I can ensure getting an answer on the matter which I wish to raise. I regret any appearance of mystery about the question, inasmuch as I do not give the name of the aircraft firm about which I am inquiring, but on the whole I think it is perhaps fairer not to give publicity to the name of the firm until some information has been forthcoming about it.
§ The firm of which I am speaking has two contracts at the present moment, one from the firm of Fairey's and one from the Ministry of Aircraft Production. Fairey's are at present engaged upon getting a certain machine into production, and in regard to 150 of the machines for which they have the contract they have 222 sub-contracted 60 per cent. to the firm referred to in my question. Nearly two years ago, in February, 1941, the Ministry of Aircraft Production gave a contract for 200 complete machines to this firm, not one of which has been delivered to date. I understand that the firm has been given until October next to produce the first of these machines, for which it had the contract in February, 1941, and it will probably be December, 1944, before the contract for 200 machines is completed.
§ The point which is very much in my mind is this. I am informed that in regard to both these contracts of which I have spoken—the one from Fairey's and the one from the Ministry of Aircraft Production—the firm in question has subcontracted no less than 75 per cent., or thereabouts. I know that all aircraft firms are bound to do some sub-contracting—that is inevitable—but I suggest that the extent of the sub-contracting in this case—some 75 per cent.—indicates that the firm in question has not adequate machine-shops or tools to enable it to fulfil the contracts which have been entrusted to it, and I feel that most of the resources of the firm, in these circumstances, must be employed not so much upon getting on with their contracts as upon clearing up the sub-contractors' errors, which are, of course, inevitable.
§ I understand that in this process of sub-contracting in these instances upwards of 300 small firms are concerned, and that it is necessary for the firm in question to spend between £700 and £800 a week upon salaries and expenses for the technical men who are required to be on the road following up the business of these 300 small firms who are undertaking the sub-contracting. I must really ask whether the Minister has satisfied himself that this company has the reserve of labour and of machine-tools to get on with the contracts if it is let down by the sub-contractors. Sub-contractors very often do let the head firm down, but a firm of considerable standing has enough reserves to enable it to take the strain and get on with the job, even if let down by the sub-contractors. But is it the case that this firm is able to take the strain if let down by any of its sub-contractors?
§ Again, my information is that this firm, whose turnover in 1941 was less than £2,000,000, has had contracts totalling over £7,000,000. I suggest that that is a 223 very large figure of contracts to hold by a firm with a turnover of £2,000,000. In particular, in April, 1942, I understand that it had a contract for a certain machine to the value of £4,165,000. I believe that a question was addressed to the Minister of Aircraft Production at that time—I am not sure whether it was the noble Lord, Lord Brabazon of Tara, or Colonel Llewellin who was Minister at that time—very similar to my question to-day, asking whether it was certain that the firm was able to fulfil this very large and important contract. The Minister—I am sure in perfect good faith, and upon the basis of information which would be supplied to him by his permanent officials—appears to have answered that he was satisfied that the firm could complete their contract; but in the upshot that turned out not to be the case, and that contract for over £4,000,000, which the firm had been advised was rather too big for them to undertake, had to be taken away from them and entrusted to another firm, because of the inability of the firm in question to undertake it. The contract of which I have spoken from the Ministry of Aircraft Production, a contract, I understand, of some £2,300,000, was given, as I have said, in February, 1941, but not one single machine has yet been delivered.
§ There is a further point which I want to mention. I believe that some seven or eight months ago this firm called in a firm of business experts in order to make an investigation and suggest ways of improving it, and I believe that that firm of business experts advised, amongst other things, the removal of the higher direction of the firm. It must have been rather astonishing to those people who called in those experts to advise on what should be done to find that part of the advice was their own removal, but I believe that that advice was tendered. Has the Minister seen that report? Has it been made available to him? Has the Minister taken into account two other reports referring to this firm, and which I believe are adverse reports? There is a report, I believe, rendered to the Minister of Production, and known as the Barlow report, and there is a report made by the financial adviser to the Westminster Bank. Here are three reports on this firm, all of which, speaking in good faith and to the best of 224 my knowledge, I believe to be adverse to the firm. Has the Minister seen those reports?
§ I have been told that the Minister contemplates paying a visit to this firm to make a speech to them, exhorting them to still greater efforts. I would very respectfully advise the Minister to investigate the affairs of this firm and clear them up before he pays any such visit. The general manager, I am told, is a man of 65 with no previous experience of aircraft production, who is drawing a very large salary and a percentage of the profits. I understand he was a tramway traffic manager, and his only acquaintance with aircraft that I can find out is that he was also once engaged in the manufacture of shuttlecocks, which would of course, give him some acquaintenance with aerodynamics, which may or may not be useful to him in his present position. The noble Lord, Lord Beaver-brook, recently said that everything about aircraft depended upon the firm, that if you had good firms you got good aircraft, and if you had bad firms you got bad aircraft. The Ministry of Aircraft Production has the responsibility for allocating the contracts for the manufacture of aircraft, and I would like to ask how did these contracts come to be allotted to this firm, which was obviously taking on contracts beyond its manufacturing capacity. The undertaking, I must say, appears to me to have been taking on contracts more with the view of recouping a financial position already difficult than with any very earnest consideration of whether it would be able to fulfil the contracts or not.
§ What has the Minister of Labour got to say about this, and the Minister of Production? Is the Minister of Labour satisfied that labour should be employed by this firm which is unable to fulfil its contracts, and is the Minister of Production satisfied that this is the sort of firm which is calculated to assist the production effort? I have heard the work of this firm described as the waste of a factory, and in my opinion, if these things are true, it is not only the waste of a factory, it is a waste of Government money and labour as well. The aircraft industry—and these things are talked about right through the aircraft industry—has expected this firm to be taken over, or very drastic changes made in it, and the aircraft industry is utterly at a loss to 225 understand why action has not been taken long ago. After all, action has been taken with Faireys and with Shorts, and very drastic action too. Why is action not taken in the case of this firm which has a bad name in the aircraft industry? It most certainly has a bad name at the Ministry of Aircraft Production also.
§ What is it that is holding the Minister back from dealing with this firm when he has dealt with Faireys and Shorts? I entirely agree that the Minister inherited a bad state of affairs from his predecessors—such a bad state of affairs that I am really beginning to understand why his two predecessors left office, which has been kept a complete mystery from us. But, although he inherited a bad state of affairs from his predecessors, I feel that it is the duty of the Minister to investigate this matter without delay. I have endeavoured to speak with moderation. There is a great deal more evidence, and more facts in my possession about this firm, and I have not entered into any personal or political issues involved. But here is a firm which has most certainly failed to fulfil its contracts, which has been badly reported upon, and which is a byword in the industry. I ask the noble Lord if he can throw some light on the question why it has not previously been taken in hand and dealt with.
§ THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR AIR (LORD SHERWOOD)
My Lords, the noble Lord has developed his question to a considerable extent and raised a great many points to all of which I do not think I shall be in a position to reply. But of course the main point was what is the Minister of Aircraft Production doing as regards this firm. As the noble Lord has said, he has not mentioned the firm; therefore I do not propose to do so either.
§ LORD SHERWOOD
I am fully aware of that, and a great many of the facts that the noble Lord has explained to the House are of course true. There are a great many firms which, we know, have not been satisfactory. The Minister of Aircraft Production has had investigations of the firm referred to carried out on his behalf, and is closely watching the matters raised in the first part of the 226 question. A large amount of the sub-contractors' work is necessary, and although it sounds very bad when figures are given of the immense numbers of firms which receive sub-contracts, the way in which the sub-contracting is done is largely a matter of the efficiency of the general manager and the management of the company. There is no doubt, however, that in this case it has not been satisfactory. But the Minister has not been holding back, he has been exercised in his mind in regard to the efficiency of this firm, and a short time ago he had an investigation carried out by the Minister of Production's Industrial Panel. There were the other reports made which the noble Lord has referred to, but this is the one on which the Minister took action. As a result of the investigator's recommendations, of which there were quite a number, a new general manager has been appointed. That was the chief recommendation and the one on which my right honourable friend the Minister acted.
§ LORD SHERWOOD
No, another one. He has been appointed and is making a personal report to the Minister at the beginning of next month. In the light of that report the position will be reviewed again and the Minister will decide what other action it will be necessary for him to take. This general manager has been in for only a short time. I can give the noble Lord and this House the assurance that there has been no holding back by the Minister in this case, and I think it is generally agreed by noble Lords and the country as a whole that the Ministry is working very hard and trying to make these firms engaged in the national effort efficient.