Bloodhound Missiles (Messrs. Ferranti Ltd.)

Oral Answers to Questions — Ministry of Aviation – in the House of Commons at 12:00 am on 5th February 1964.

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Photo of Mr Frank Allaun Mr Frank Allaun , Salford East 12:00 am, 5th February 1964

asked the Minister of Aviation on what date the Comptroller and Auditor General first queried with his Department the payments to Ferranti on the Bloodhound contract; and when he expects to receive a report following the inquiry he has ordered.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

asked the Minister of Aviation how soon he expects the report of tie inquiry into the profits allowed in a contract for the supply of guided weapons commented on recently by the Comptroller and Auditor General.

Photo of Mr Julian Amery Mr Julian Amery , Preston North

The Comptroller and Auditor General first queried the matter with my Department on 14th August, 1963.

The inquiry will be pressed forward as quickly as possible but it is too early to say when the work will be completed.

Photo of Mr Frank Allaun Mr Frank Allaun , Salford East

May I ask the Minister why he wailed all that time before setting up an inquiry? Secondly, will he ensure that the report of this inquiry is issued within a month, that is, six weeks since the inquiry was set up, so that this serious scandal involving millions of £s of public money is not hushed up until after the election?

Photo of Mr Julian Amery Mr Julian Amery , Preston North

With regard to the first part of that supplementary question, I do not think that there was any excessive delay. We first had to investigate our own papers after the Comptroller and Auditor General had drawn our attention to the problem. We then got in touch with the firm to see what it had to say, and it was not until just before Christmas that we were satisfied that the situation was a very serious one. We then considered what should be done, and an announcement of the appointment of the investigation was held up pending my return from South America.

With regard to the second part of the supplementary question, we are making Sir John Lang aware of the need for a speedy answer, but I would not like to dictate the exact time limit of it.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

May I ask the Minister what was the motive in setting up the committee in the first instance? Is he aware that there is great suspicion in many sections of the Press and throughout the country that this was a deliberate stalling operation designed to confuse rather than to enlighten the public on the waste of millions of £s of public money? Will the Minister give the House an assurance that if the Public Accounts Committee investigates this. Sir John Lang and the members of the committee of investigation can themselves be called by the P.A.C. for investigation?

Photo of Mr Julian Amery Mr Julian Amery , Preston North

I do not think that there is any unworthy motive behind this. What I am concerned about is to see whether the machinery for placing contracts is working well or not. If there is something wrong with it, then let us put it right. Whether there is a scandal of any kind is a matter for the P.A.C. My concern, and that of the Chancellor of the Exchequer, is to see where the machinery fell down, if it did—this has not yet been established—and, if necessary, to decide what should be done to correct it as soon as possible.

Mr. Lee:

Will the Minister give the House an assurance that nothing that comes from this Committee will in any way vitiate the work of the P.A.C., and that in fact the P.A.C. can, if it desires, call Sir John Lang and the other members of the committee before it to give evidence?

Photo of Mr Julian Amery Mr Julian Amery , Preston North

I do not think that I am in a position to interfere with the P.A.C. The members of it are free agents in this matter.

Photo of Mr Frank Allaun Mr Frank Allaun , Salford East

asked the Minister of Aviation what were the total labour costs and overheads at the Ferranti factory in Wythenshawe, Manchester, during the period of its Bloodhound contract; what was the amount paid to the firm on this account; and what were the labour costs and overheads there on other contracts during this period.

Photo of Mr Julian Amery Mr Julian Amery , Preston North

I have no figures of the labour costs and overheads at the Ferranti factory in Wythenshawe in respect either of the work carried out there on the Bloodhound missile or on other contracts covering the same period; nor have any separate amounts been paid to the firm in respect of work at Wythenshawe.

Photo of Mr Frank Allaun Mr Frank Allaun , Salford East

May I ask the Minister whether he will assure the House that the whole of the excess proved will be recouped from the company? Secondly, may I ask whether the £2·7 million was in excess of labour costs and overheads on the Bloodhound contract at Ferranti's, or was it in excess of all such costs at the factory, as the Comptroller and Auditor General's Report seems to indicate? If it is the latter, it is far more than £2·7 million, because there was commercial and other work going through the factory at the same time.

Photo of Mr Julian Amery Mr Julian Amery , Preston North

The hon. Gentleman's Question posed us with something of a problem, because the work done by Ferranti on guided weapons, including the two marks of Bloodhound, has extended over a long period, over many contracts, and over a number of factories. It has therefore not been possible to isolate the picture in relation to the Wythenshawe works alone.

The hon. Gentleman's supplementary question raises other matters of which I should need notice. This is quite a difficult matter, and one which I think the P.A.C. will probably deal with better than we can in Question and Answer across the Floor of the House.