§ Mr. HOGGEasked the Parliamentary Secretary to the Ministry of Munitions whether the legal advisers to the Crown have recently decided that contractors are not entitled to be paid for jigs and tools; and, if so, if he will state the total amount already paid away on this account to contractors by the Ministry of Munitions, and why any payments at all were made before taking the advice of the officials concerned as to legal liabilities?
Mr. J. HOPEThe legal advisers of the Crown advised some little time back that expenditure on jigs, tools, and fixtures should be regarded as capital expenditure, and as such should not be admissible as production expenses. While treating this expenditure as capital the Minister has now agreed to take such expenditure into full consideration in arriving at the establishment charges to be allowed to contractors in reaching settlements under the break clauses of contracts. Payments are therefore being made to contractors, in settlement of contracts under liquidation, which, in approved cases, allow a proportion of expenditure on jigs and tools as an establishment or overhead charge.