Guided Weapons Contract (Inquiry)

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 John Cronin Mr John Cronin , Loughborough 12:00 am, 5th February 1964

asked the Minister of Aviation if he will make a statement on the inquiry announced on 24th January into the profits allowed by his Department in prices agreed in a contract for the supply of guided weapons.

Photo of Mr Julian Amery Mr Julian Amery , Preston North

The Report of the Comptroller and Auditor General on the Appropriation Accounts of the Ministry of Aviation draws attention to the possibility that the prices agreed by the Ministry of Aviation for a certain guided missile may have resulted in the firm concerned making excessive profit. My right hon. Friend the Chancellor of the Exchequer and I have decided that there should be an independent inquiry into the circumstances in order to ascertain how they arose and whether any changes are needed in the price fixing procedures of the Ministry of Aviation.

Sir John Lang, former Permanent Secretary of the Admiralty, has agreed to conduct the inquiry. He will be assisted by Mr. J. D. Russell, a member of the Council of the Institute of Chartered Accountants, and Mr. H. W. Hobbs, Deputy Controller of Royal Ordnance Factories, War Office. The inquiry has already started.

Photo of Mr John Cronin Mr John Cronin , Loughborough

Bearing in mind the great public importance of this matter, and also the fact that the Public Accounts Committee is particularly involved, why did not the Minister make a statement to the House on the day when this decision was announced to the Press? Was not this extraordinarily indifferent to the interests of the House? Furthermore, can the right hon. Gentleman indicate what investigations he is making to ensure that this has not happened in other contracts with which the Ministry of Aviation has been associated? Can he also tell the House what steps he is taking to ensure that this does not happen in the future?

Photo of Mr Julian Amery Mr Julian Amery , Preston North

No discourtesy was intended to the House. As to the steps that we are taking, the first is to call for an inquiry by Sir John Lang, which we hope will show up any weaknesses that there may be, and then to make recommendations for the future.

Photo of Mr Anthony Kershaw Mr Anthony Kershaw , Stroud

Can my right hon. Friend give an assurance that when the inquiry is completed its results will be made known to the hon. Members for Newton (Mr. Lee) and Loughborough (Mr. Cronin), as well as to the rest of the House?

Photo of Mr Julian Amery Mr Julian Amery , Preston North

I am prepared to go further, and to say that the report will be published.

Photo of Mr John Cronin Mr John Cronin , Loughborough

But is this inquiry by Sir John Lang enough, bearing in mind that £240 million has been paid for contracts which have been cancelled by the Ministry of Aviation, and also the astronomical figure of £200 million involved in the TSR 2 development? Is it not time for a complete overhaul of the Ministry of Aviation's financial machinery in relation to contracts?

Photo of Mr Julian Amery Mr Julian Amery , Preston North

I do not accept the hon. Member's assumptions. The Lang inquiry will help, and I have no doubt that the Public Accounts Committee will also help, but meanwhile our own administrative arrangements in the Ministry should be of assistance.

Photo of Mr Frank Allaun Mr Frank Allaun , Salford East

On a point of order. Can you guide us on this point, Mr. Speaker? More than one Minister is involved, since the Minister of Aviation, up to July, 1962, was the present Minister of Defence. Since he is also involved in this matter, how can we put down Questions to the Minister responsible at that time?

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

I will consider that, but for the moment I would invite the attention of the House to the fact that we have managed to get the Answers to nineteen Questions by fourteen minutes past Three.