HC Deb 06 February 1956 vol 548 cc149-50W
52. Mr. Osborne

asked the Minister of Supply how much of the estimated loss of £700,000 made by Royal Ordnance factory's manufacture of hosiery machines arose prior to 1951; since the work was done on the basis of cost of manufacture plus an agreed profit margin not exceeding 10 per cent., how many contracts, and for what total amount he has on this cost-plus basis; and what steps he is taking to end this wasteful form of production.

Mr. Erroll

Much of the expenditure under this contract was incurred in the manufacture of components before the beginning of 1951. But it is not possible to apportion the loss in the way suggested by my hon. Friend because most of the machines were completed and delivered after that date. As to the second part of the Question, the contract provided also for a fixed maximum price and in the event it was that price which applied. For such civil work as is still undertaken by the Royal Ordnance Factories it is the general rule to charge fixed prices.