STATEMENT BY MR. BONAR LAW. (Hansard, 3 June 1918)

Mr. H. SAMUEL
on 1st May asked the Chancellor of the Exchequer if he will state what action has been taken by the Government with respect to each of the recommendations in the Third Report of the Select Committee on National Expenditure for the Session of 1917 and in the First and Second Reports

Recommendations. Answers.

(1) Finance.—That a successor to the Finance Member of the Council who has recently resigned should be appointed. This is not considered necessary by the Ministry of Munitions in view of the appointment of a Financial Secretary.

(2) That an officer responsible for finance be associated with the Programme Committee in the consideration of the demands made on the Ministry by the War Office, the Air Council, the Admiralty and the Allies. The Financial Secretary (or his representative) will be associated with this Committee and also with the Sub-committee dealing with the programmes of individual Supply Departments.

(3) That the Finance Branch be placed in the closest possible relation with the Department of Requirements and Statistics and with the Supply Department responsible for the demand in question in the consideration of the steps which require to be taken in order to execute the individual items of the programme. This has been provided for under an Office Order recently issued, which states that Supply Departments shall submit their programmes for meeting these requirements to the Finance and Contracts Departments, and these will be examined by them in conjunction with the Director of Munitions Requirements and Statistics.

(4) That in such consideration of any detailed programme the allocation of orders and of materials as between the national factories and firms working Supply Departments in formulating their programme for meeting requirements bear in mind the principle of utilising as far as possible national factories and

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should be written at once. Letters postponed are sometimes forgotten, and it is better to take action at once. I have no doubt that, if it had been present to the mind of the Chief Secretary, he would have communicated at once. Better late than never.

§ Colonel SHARMAN-CRAWFORD
I would like to know whether the person elected and arrested is a Member of the House if he has not taken the oath?

§ Mr. SPEAKER
Certainly he is a Member of the House. I recollect Members who have been two or three years before taking the oath. of the Committee for the Session of 1918, and with respect to the recommendations in paragraph 17 of the First Report of 1917, repeated in paragraph 34 of the Second Report of 1917, and in paragraphs 38, 44, 57, 62, 64, 65, and 80 in the Second Report of 1917; if he will state what progress has been made by the Committees appointed in pursuance of the recommendations in paragraphs 15 (3) and 33 (2) of that Report; and what appointments, if any, have been made in pursuance of the recommendation in paragraph 15 (1)?

§ Mr. BONAR LAW
has circulated the following statement with reference to the First Report of the Session of 1918, supplementing his reply of the 2nd May:
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Recommendations. Answers.

under contract should be decided upon. This does not apply to such day-to-day variations in the work of national factories as are bound to occur in the case of the factories for repair work or for ammunition filling. In these cases it should suffice if the Finance Branch have an opportunity of reviewing the work done at the factories alter agreeing to the general programme. other factories designed for production of a particular commodity on a large scale.

(5) That the Finance Branch through early association with proposals be in a position authoritatively to decide on the necessity of capital expenditure and the terms of the assistance to be granted by the Ministry, the Munitions Works Board limiting itself to the consideration of structural details and, through the Assisted Works Branch, to the supervision of execution. The Munitions Works Board is closely associated with the Finance Department and is specially charged with giving attention to economy of cost, as well as structural details. A representative of the Finance Department sits on the Board, who only settle schemes costing not more than £10,000 each. All schemes over this maximum go to the Finance Branch (and to the Treasury in the case of schemes over £50,000).

(6) That the Finance Branch exact more definite undertakings than have hitherto been obtained regarding the completion of extensions and equipment within the promised time. This can be made a condition of the agreement where Government assistance is involved, as is the case in the majority of instances, but it should also be enforced in every case where permission to construct, priority, and remission from excess taxation are allowed. This is the practice of the Munitions Works Board.

(7) That in order to concentrate the available labour and material on the more necessary of extensions involving capital expenditure a far more rigorous scrutiny be carried out in the Ministry itself than appears to be the case at present. Every effort has been and is being made to secure the closest scrutiny in the Ministry. Moreover a Sub-committee of the War Priorities Committee, under the chairmanship of a representative of the Ministry of National Service, specially keeps in view the prevention of wasteful competition and the securing of proper priority in regard to labour and material for the construction of new buildings.

(8) That the Munitions Works Board should consider whether any economy in staff or expenditure under contract can be effected, consistently with the safeguarding of the special purposes of the Departments, by the unification of the present separate construction Departments of the Ministry. This question has been considered by a Committee of the Council who have not recommended such centralisation.

(9) That the attention of the Treasury be drawn to the references to finance in this Report, with a view to their assisting and strengthening the status and influence of the Finance Branch of the Ministry. The Treasury have always given, and will continue to give, their full support to the Finance Branch.

(10) Accounts. —That the War Office should order the release of qualified accountants for National Service in the Ministry. This matter is under negotiation with the War Office.

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Recommendations. Answers.

(11) Contracts. —That a representative of the Contracts Branch be added to the Munitions Council. This is not considered necessary, as the Financial Secretary himself accepts responsibility for this work.

(12) That it be definitely laid down that the settlement of contract prices is the duty of the Contracts Branch. The sole responsibility for fixing prices is assigned to the Contracts Department, subject only to control by the Financial Secretary.

(13) That the Technical Costing Section, whether removed from the Contracts Branch or not, be immediately strengthened, and the work of all engineering cost in the Ministry be undertaken by it. The Ministry entirely agree with the recommendation, but it is largely a question of staff, and technical accountants capable of costing work are difficult to obtain. Steps are, however, being taken in this direction.

(14) That collective bargaining be abolished, and that flat rates be established only in cases where it is possible to arrive at an average cost and to eliminate the uneconomic producer. This recommendation is being more and more acted on by the Ministry. Prices are now increasingly regulated by costings, and, as ascertainment of cost is extended, collective bargaining is tending to disappear.

(15) That as soon as possible a decision be arrived at regarding the rate of profit that should be allowed in each industry, due regard being had to the rate of turnover and to the normal profits on capital earned before the War. This recommendation is regarded as impracticable for the reasons explained to the House of Commons on 25th April last by the Financial Secretary to the Ministry.

Recommendations.	Answers.
(1) Finance.—That a successor to the Finance Member of the Council who has recently resigned should be appointed.	This is not considered necessary by the Ministry of Munitions in view of the appointment of a Financial Secretary.
(2) That an officer responsible for finance be associated with the Programme Committee in the consideration of the demands made on the Ministry by the War Office, the Air Council, the Admiralty and the Allies.	The Financial Secretary (or his representative) will be associated with this Committee and also with the Sub-committee dealing with the programmes of individual Supply Departments.
(3) That the Finance Branch be placed in the closest possible relation with the Department of Requirements and Statistics and with the Supply Department responsible for the demand in question in the consideration of the steps which require to be taken in order to execute the individual items of the programme.	This has been provided for under an Office Order recently issued, which states that Supply Departments shall submit their programmes for meeting these requirements to the Finance and Contracts Departments, and these will be examined by them in conjunction with the Director of Munitions Requirements and Statistics.
(4) That in such consideration of any detailed programme the allocation of orders and of materials as between the national factories and firms working	Supply Departments in formulating their programme for meeting requirements bear in mind the principle of utilising as far as possible national factories and

Recommendations.	Answers.
under contract should be decided upon. This does not apply to such day-to-day variations in the work of national factories as are bound to occur in the case of the factories for repair work or for ammunition filling. In these cases it should suffice if the Finance Branch have an opportunity of reviewing the work done at the factories alter agreeing to the general programme.	other factories designed for production of a particular commodity on a large scale.
(5) That the Finance Branch through early association with proposals be in a position authoritatively to decide on the necessity of capital expenditure and the terms of the assistance to be granted by the Ministry, the Munitions Works Board limiting itself to the consideration of structural details and, through the Assisted Works Branch, to the supervision of execution.	The Munitions Works Board is closely associated with the Finance Department and is specially charged with giving attention to economy of cost, as well as structural details. A representative of the Finance Department sits on the Board, who only settle schemes costing not more than £10,000 each. All schemes over this maximum go to the Finance Branch (and to the Treasury in the case of schemes over £50,000).
(6) That the Finance Branch exact more definite undertakings than have hitherto been obtained regarding the completion of extensions and equipment within the promised time. This can be made a condition of the agreement where Government assistance is involved, as is the case in the majority of instances, but it should also be enforced in every case where permission to construct, priority, and remission from excess taxation are allowed.	This is the practice of the Munitions Works Board.
(7) That in order to concentrate the available labour and material on the more necessary of extensions involving capital expenditure a far more rigorous scrutiny be carried out in the Ministry itself than appears to be the case at present.	Every effort has been and is being made to secure the closest scrutiny in the Ministry. Moreover a Sub-committee of the War Priorities Committee, under the chairmanship of a representative of the Ministry of National Service, specially keeps in view the prevention of wasteful competition and the securing of proper priority in regard to labour and material for the construction of new buildings.
(8) That the Munitions Works Board should consider whether any economy in staff or expenditure under contract can be effected, consistently with the safeguarding of the special purposes of the Departments, by the unification of the present separate construction Departments of the Ministry.	This question has been considered by a Committee of the Council who have not recommended such centralisation.
(9) That the attention of the Treasury be drawn to the references to finance in this Report, with a view to their assisting and strengthening the status and influence of the Finance Branch of the Ministry.	The Treasury have always given, and will continue to give, their full support to the Finance Branch.
(10) Accounts. —That the War Office should order the release of qualified accountants for National Service in the Ministry.	This matter is under negotiation with the War Office.

Recommendations.	Answers.
(11) Contracts. —That a representative of the Contracts Branch be added to the Munitions Council.	This is not considered necessary, as the Financial Secretary himself accepts responsibility for this work.
(12) That it be definitely laid down that the settlement of contract prices is the duty of the Contracts Branch.	The sole responsibility for fixing prices is assigned to the Contracts Department, subject only to control by the Financial Secretary.
(13) That the Technical Costing Section, whether removed from the Contracts Branch or not, be immediately strengthened, and the work of all engineering cost in the Ministry be undertaken by it.	The Ministry entirely agree with the recommendation, but it is largely a question of staff, and technical accountants capable of costing work are difficult to obtain. Steps are, however, being taken in this direction.
(14) That collective bargaining be abolished, and that flat rates be established only in cases where it is possible to arrive at an average cost and to eliminate the uneconomic producer.	This recommendation is being more and more acted on by the Ministry. Prices are now increasingly regulated by costings, and, as ascertainment of cost is extended, collective bargaining is tending to disappear.
(15) That as soon as possible a decision be arrived at regarding the rate of profit that should be allowed in each industry, due regard being had to the rate of turnover and to the normal profits on capital earned before the War.	This recommendation is regarded as impracticable for the reasons explained to the House of Commons on 25th April last by the Financial Secretary to the Ministry.