Orders of the Day — Sir Alexander Gibb and Partners.

– in the House of Commons on 19th March 1942.

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Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

I have given notice to the Parliamentary Secretary to the Ministry of Works and Buildings to raise a matter concerning the appointment of Sir Alexander Gibb and Partners, and particularly of a Mr. Beaver, a member of that firm, to a position of responsibility in the Ministry of Works and Buildings. I have not so much time at my disposal as I had hoped to have; therefore, I must endeavour to compress what I have to say. Whatever may have been written and said elsewhere, I do not make any imputation of dishonesty against any of the persons mentioned. I am raising this as a matter of principle, as to whether it is right and proper that a Ministry should, first of all, take into their employment a partner from a recognised firm of consulting engineers, and then pass back through the said firm a substantial number of contracts, having first, as I would put it, milked the partnership presumably of the brains of their business.

Photo of Mr Oliver Simmonds Mr Oliver Simmonds , Birmingham Duddeston

In the light of what my hon. Friend says, might I remind him of a Question put last week by the hon. Member for Stourbridge (Mr. R. Morgan) to the Parliamentary Secretary to the Ministry of Works and Buildings, in reply to which the Minister stated that no new contracts have been placed with Sir Alexander Gibb and Partners by the Ministry since a member of the firm became Director-General at the Ministry?

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

If my hon. Friend will await what I have to say, he will see what I am getting at. It has nothing to do with the business, because if this firm were not employed by the Ministry of Works and Buildings, it would apply to the Ministry of Supply, where the same irregularity was going on for some months, through the same business. It seems to me wrong to take the brains out of a business first, and then to employ the business for the purpose of administering a large number of civil engineering contracts. I raised another issue, as to whether the person taken is competent for the job of director-general. I know nothing about him personally, but, so far as I know, his engineering experience is very little. He is a partner in the firm, but it was only in 1940 that be became a member of the Institute of Civil Engineers. If this person is so qualified, and if this engineering consulting firm are so capable of doing their job, can my hon. Friend explain why one of the factories, which I shall not identify for security reasons, but which he will speedily recognise, was estimated to cost £5,000,000, but actually cost something over £10,000,000? There is another case of a hostel in the same neighbourhood which was estimated to cost £95,000, and actually cost £234,000. As the hostel is intended for only 1,000 people, the cost per head works out at £234, which the House will agree compares most unfavourably with the cost of the London County Council's White City buildings—of a permanent, not a temporary, nature—the cost of which works out at £150 a head.

Photo of Mr Lewis Silkin Mr Lewis Silkin , Camberwell Peckham

My hon. Friend ought to remember that the White City provided no amenities, only rooms.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

It is all right; I am not attacking the L.C.C. My hon. Friend is only wasting my time. I do not propose to give way any more. My point is to call attention to the amount of fees paid to Sir Alexander Gibb and Partners. They amount to £15,000 per annum. At the Ministry of Supply, at the present moment, there are four competent civil engineering firms used as consultants, and the total fees distributed among them are £5,000. That is something of the order of £1,250 each. Why should there be that great differentiation? That is only a very small part of the sums in question. The Ministry of Works and Buildings, from December, 1940, to March, 1942, according to my hon. Friend, has had work to the tune of £8,700,000 carried out through this firm, and the fees' paid on top of that have been £358,000. I know that he will say that it has not all gone into their pockets and that they have to employ all sorts of other people, but it is said in the trade that as much as 30 per cent. of the amount paid actually goes to that firm. If you add up the total of fees and contracts placed with this firm for the period in question, it comes to something over £18,000,000 worth of contracts, for which a fee of £810,000 has been paid.

I will not go into the problem of the multiple sub-letting of contracts, of which I have one or two glaring examples, but I would ask the Parliamentary Secretary to answer whether Sir Alexander Gibb & Partners are entitled to call themselves agents for the Ministry of Works and Buildings. It is put on their letter heading and seems to put them in a most unfortunate position, and it causes a great deal of dissatisfaction and complaint among people in the civil engineering profession. It is all the more unfortunate that Mr. Beaver was a partner of that firm, although my hon. Friend now tells me that he is a sleeping partner. I would ask my hon. Friend, who no doubt knows as much about the job as I do. When does a sleeping partner sleep or when does he cease to have any interest in the financial results of the business? I understand a sleeping partner to be a person who takes no active part in the business but shares in the results and stands to benefit very enormously from the amount earned by the firm. That is the common understanding.

There is another question, and a very serious one, which I wish to put to my hon. Friend. At the time that the Ministry of Works and Buildings first started in 1940, I believe that Mr. Beaver was Director of Building Materials at the Ministry, but was also at that time an active sleeping or sleeping active partner in Sir Alexander Gibb and Partners. When the question of the development of a certain big works in the West country, particulars of which I will pass across the Table to my hon. Friend if he does not recognise it, was under consideration, Mr. Beaver gave an assurance that the Ministry of Works and Buildings had a sufficient combined staff capable of carrying out this big development estimated to cost something like £20,000,000. What happened? It was questioned by competent people present who said they were certain there was not sufficient staff at the Ministry of Works and Buildings and asked that they should employ other people. The whole matter was handed out by the Ministry of Works and Buildings to Sir Alexander Gibb & Partners to handle for them because they had not sufficient staff to do the job. That casts a very great reflection on the whole administration of the Ministry of Works and Buildings.

I have one or two suggestions to make. It is time they got rid, as our American friends across the Atlantic have done, of the dollar-a-year man. We do not want people in Ministries who are giving their services and raking in the swag elsewhere for services rendered without their knowing what they are being paid. If you take men on the staff, you should pay them and make them completely unaffected by interests outside. In the view of competent people—my hon. Friend may laugh, but I probably know as much about this thing as he does.

Photo of Mr Oliver Simmonds Mr Oliver Simmonds , Birmingham Duddeston

All competent people think that too.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

At any rate, the civil engineering profession recognise that the Director-General should be not merely a capable administrator but somebody who really understands, from A to Z, the civil engineering profession. Probably the best man for the job would be one of the leading men in the contracting trade. Again, you would not have to have him placing contracts through his own firm. They would have to be divorced from operating under him, and he would have to dissociate himself entirely from any benefit which was derived from Government Departments.

A third point that I want to make is that just as you employ policemen to prevent ordinary crime in the streets, so should you employ competent accountants to prevent crime inside Ministries. I suggest to my hon. Friend that it would be a very good thing if we could have a committee formed from the societies of chartered and incorporated accountants to supervise the appointment of competent accountants inside the Ministries—men who really can detect the kind of thing which we suspect is going on. There has been a great deal of feeling in the country about this matter and in the profession. Indeed, civil engineers have set up a committee to look into it, and this committee is sitting now. I consider I am not overstating the case in saying that it would be in the public interest, and would give great public satisfaction, if a public inquiry was instituted into the whole proceedings.

Photo of Mr George Hicks Mr George Hicks , Woolwich East

I thank my hon. Friend the Member for Ipswich (Mr. Stokes) for the way in which he has submitted his case regarding certain phases of activity in my Ministry in connection with the people whom the Department employs. On many occasions Questions have been asked of me in the House about the people whom the Department employs in wartime. However unpleasantly the word "war" may jar on the ears of some people, it must be remembered that we are at war and if the Government need the temporary assistance of individuals from private firms, are we then to say that such firms must no longer have any employment from a Government Department? The question my hon. Friend has raised is one of principle. I would like to say at the outset that my Ministry has handed over only one job to Sir Alexander Gibb and Partners since the Ministry was established, and that was before the present Director-General became Director-General.

Photo of Mr George Hicks Mr George Hicks , Woolwich East

That has nothing at all to do with contracts. As I have stated in this House, from the moment he became attached to the Ministry of Works and Buildings he was no longer an active partner in any shape or form in the firm of Sir Alexander Gibb and Partners.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

But he is still a partner.

Photo of Mr George Hicks Mr George Hicks , Woolwich East

He is no longer an active member.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

But he is still an active partner.

Photo of Mr George Hicks Mr George Hicks , Woolwich East

I think my hon. Friend would be right, but since that time I think he has voluntarily resigned from being a partner.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

On what date did he resign?

Photo of Mr George Hicks Mr George Hicks , Woolwich East

I have not the exact date, but I am informed that he has resigned his partnership in the firm. I wanted to make it perfectly clear that I have it on his assurance, and on the assurance of everyone from whom I tried to get the information, that ever since he has been associated with the Ministry of Works and Buildings he has not been available for consultation or been in any sense an active member of the firm of Sir Alexander Gibb and Partners. [Interruption.] We must concede that there are some honest people in this world; otherwise, how can the hon. Member believe what I say, or I believe what he says?

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

Did the Minister ask this gentleman whether he was receiving any remuneration or share of profits from his firm during that period?

Photo of Mr George Hicks Mr George Hicks , Woolwich East

I did not ask him that, but I am pretty sure he was receiving a share of the profits of the firm. He was not being paid by my Ministry at the time, and if he did not get anything from somewhere, he looked very well on nothing. I am fairly sure he was receiving some profits from the firm. Let me say that the bulk of the work about which the question has been asked with regard to the terms of the agreement with Sir Alexander Gibb and Partners was placed by the Ministry of Supply, and the Ministry of Supply passed such work over to the Ministry of Works and Buildings, together with the general commitments that were entered into by the firm of Sir Alexander Gibb and Partners. It would be relatively easy, if I had the time, to show that, as far as the economic arrangement was concerned, it has been definitely to the benefit of the country and the Government. It has been cheap. The principle under which it has been worked may not commend itself to some, but I will tell my hon. Friend and other hon. Members that the Select Committee on National Expenditure have asked for a report, that the report is now before them, and that they are now examining this matter. Therefore, perhaps my hon. Friend will not ask me to reveal too many details with regard to the matter. However, the only job that was given to the firm of Sir Alexander Gibb and Partners, since Mr. Beaver has been a member of the Ministry, but before he was Director-General, is the one in the West Country mentioned by my hon. Friend.

Photo of Mr George Hicks Mr George Hicks , Woolwich East

If the hon. Member reduced that amount by half and then took quite a big sum from the half, he would be near it. The figure he gives is a very imaginative one. It is, and will be, much below half that figure. In that case, the chairman of the Institute of Civil Engineers was asked—as we have been associated all the time with the organisations of the industry—to give an opinion, to help us and guide us in the big programme which had to be carried out. In this instance, it was the same as happens with the Royal Institute of British Architects. The Institute of Civil Engineers were asked if they were willing to nominate a firm, or firms, that the Ministry might consider, and after consultation with the profession and with their organisation, they recommended this firm, and it was accepted by the Ministry.

Photo of Mr George Hicks Mr George Hicks , Woolwich East

The Ministry first of all solicited the opinion of the industry and their organisation and asked them to nominate a firm, or firms, and from that source came this particular recommendation. The question of men giving their services voluntarily or being paid is one which must be left to the individual. I can only say that those for whom I have answered in the House from time to time have given their full-time services. They are directly under my Ministry, and they are giving their full-time services, and if they do it voluntarily, I am not able to interfere. It might be, perhaps, a better thing if they became Civil servants. I do not know how that would affect their honesty; it might be that it would not be improved. But that is not the point. In regard to the question of accountancy, let me say that the Ministry, as soon as ever they had this firm brought under control in any shape or form, did have a guarantee that they would be able to examine those accounts, and they do examine them. Every statement of every wage that is paid to any person working for this firm is submitted to my Ministry and checked by competent accountants in order that we may check up the weekly and monthly accounts, and there have been reductions and alterations in staff.

It being the hour appointed for the Adjournment of the House, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.