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Dockyard Orders (Quotations)

Volume 476: debated on Wednesday 28 June 1950

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asked the Parliamentary Secretary to the Admiralty why the Director of Dockyards, in order to secure orders, was authorised to quote fixed prices at 15 per cent. below estimated costs; and whether he is aware that this practice has involved the taxpayer in heavy financial loss, and competes unfairly with private ship repairers.

The Director of Dockyards was authorised to quote fixed prices for commercial work at not more than 15 per cent. below estimated cost when in his opinion the estimate was so high that it would result in the loss of an order which it was specially desired to secure for the purpose of contributing to the maintenance in full employment of the skilled tradesmen who were essential to the Naval Service.

The answer to the second part of the Question is "No, Sir." The reduction not exceeding 15 per cent. which was applied only in a few cases, has not of itself involved heavy financial loss, and at the time the dockyards were seeking commercial repayment work, all private ship repair yards were exceedingly busy, so that no question of unfair competition arose.

While accepting the Minister's explanation of the motive lying behind this action, may I ask is it not a fact that representations were made to the Treasury two years ago that very heavy financial loss would be incurred to the taxpayer, and in the light of that experience, can the Minister give the House an assurance that a practice of this kind is not likely to be repeated?

While the practice was accepted by the Treasury, at the time we introduced it, the main reason for it, was in order that we could continue the employment of as many dockyard workers as possible soon after the war, because of the valuable services they gave us during the war.

Can the hon. Gentleman tell us whether any such contracts are in operation at the moment?

I hope the Minister appreciates that full employment may well pay dividends in the long run.

Is my hon. Friend aware that the work that has been done under ship repairing schemes in the dockyard has been of a great social service; and that work has been done which could not have been done by outside commercial firms at the time that these schemes were undertaken?