HC Deb 25 March 1942 vol 378 cc2009-10W
Captain De Chair

asked the Chancellor of the Exchequer whether he is aware that the daily war expenditure is much higher than is justified by the results, since the practice of paying contractors cost plus 10 per cent. for Government work leads to contractors paying wages out of all proportion to the pay in the Services, and encourages them to keep the work going as long as possible; and, in the interests of economy, will he now put a stop to this form of contract?

Sir K. Wood

I dealt with this subject in some detail on the Report of the Vote of Credit on 1st October last. It is a misapprehension to suppose that many Government contracts are on the basis of allowing a contractor a percentage of his costs by way of profit, thus giving him an inducement to swell his costs. Such contracts are quite rare, being practically confined to small urgent building jobs when it is not possible to define the scope of the work in advance. I agree that their widespread adoption would be open to great objection.