§ LORD BALFOUR or BURLEIGH had the following Question on the Paper—
§ To ask whether the Government will state the terms of the contract under which large works are being carried out for the Admiralty or any other Department at Throsk, in Stirlingshire; and if so, whether the remuneration is to be at the rate of 5 per cent. on the expenditure, and what supervision on behalf of Government is being exercised as to the cost of the work; and whether it is not the fact that special inducements for Sunday labour at double rates of pay are being promiscuously offered to any one who will accept it, whether otherwise in the employment of the contractor or not.
§ The noble Lord said: My Lords, before actually asking the Question standing in my name I should like to explain to the House that I have postponed the Question which I had put down in relation to another matter. Lord Rothermere is unable to be 844 in London this week owing to being less well than usual, and he has asked me to put that subject off until next week—a request with which, of course, any one of your Lordships would comply.
§ I may say that since I put down the Question printed upon the Paper to-day I have been told—I do not attach more credence to it than necessary—that the terms of the contract are 10 per cent. on the expenditure, and not 5 per cent., to the contractor. We know locally that the contractor is Sir John Jackson, who has had considerable experience in thee matters. I have no doubt that he makes the best bargain he can for himself, and the fact that there have been question, affecting his contracts in other matters does not give those of us who are locally-interested in Throsk any greater confidence in this contract. It is obvious, whether the amount be 5 per cent. or 10 per cent., that the payment of a percentage is a premium upon extravagance, because the more the contractor spends the more he gets for himself. Therefore it is in my opinion detrimental to the public interest that any contracts should be made on terms of this kind, or on any terms like them.
§ I am told—and I have done my best to verify it—that many of the workmen are taken to the place of their work by means of a two hours' journey, an hour each way, and that they are paid during the whole of the time that they are in the train. The contractor, I am informed, also pays the expense of the train. It will be rather interesting to know whether the contractor gets 5 per cent. on the expenditure which he pays to the railway company for the train. The train takes the men over a route some fourteen or sixteen miles in length, but there is a shorter route across the old Forth Bridge which would take them a distance of only about a mile and a half. There may be some reason for not taking them by that route, but trains run across the bridge five or six times a day direct from Alloa, and I sec no reason why the train conveying these workmen should go by way of Stirling, a distance of fourteen or fifteen miles and occupying something like an hour each way. The men are paid by the hour; therefore if they are paid 10½d. an hour for these two hours in the train, the cost, instead of being 10½d. an hour for the nine hours day, works out at about 1s. 2d. an hour.845
Turning to the question of Sunday labour, it scents to me that one of the worst aspects of this transaction is that the longer and the more the men work on Sunday the greater is the expenditure incurred. I understand that this Sunday labour is not confined to the people who are in the contractor's own employment, but that men are taken who are in the employment during the rest of the week of other local contractors, and that it is really a very insidious form of bribery. Take, for instance, the case of carpenters and joiners employed on ship production. If a man has done a good week's work from Monday to Saturday in ship production at Alloa, and gets an offer to work elsewhere on Sunday and is paid 24s. for a single day's work, it is rather difficult for him to resist the temptation. Consequently the shipbuilders by whom these men are employed during the rest of the week have to suffer a reaction in this respect, that the men are exhausted by the work they do elsewhere on Sunday and are unable to do a full day's work on the Monday. Upon that point I have a letter written by a man whom I have known for forty years and who is employed on a contract for a shipbuilding yard which is being constructed at express speed to try and counteract the shipping shortage. The people for whom he has the contract wrote to him complaining that he was not getting on fast enough with the work, and this is what he wrote to them in reply—
With reference to your complaint to-day about the slow progress I am making with putting in the foundations at your works, I am sorry to say that owing to the great demand for labouring men and the inducements held out to them from other sources I have been unable to keep my regular squad together. You are no doubt aware that Sir John Jackson has started on the other side of the Forth, almost opposite Alloa, and wants 1,000 men, and to get them is paying eleven hours per day for nine hours work, and that for work which to all appearances could stand at present and allow the shipbuilding yard work to get on, which is far more urgent. There is an extra demand on to-day, and I shall be glad to be advised what to do.
Since I came into the House I have received another letter from the manager of a coal company close to this district, in which he says—
We may say that we have suffered very much indeed from surface workers leaving our colliery and going to Throsk, so much so that we are almost unable to continue work at the pit. The men at Throsk are getting 2s. a day more than we can pay them, and their railway fare is paid from Alloa and Stirling. For Sunday work it is
reported they get double pay, and it is common report that the men say it is the softest job they have ever had.
I do not understand what this work is for. Perhaps the noble Earl who represents the Admiralty can tell us. It is a mystery to me. I have known the district all my life. The place where the work is going on is above the old Forth Bridge, which can only be opened at high tide, and only then for a very short period, so that any communication to take away anything made at this place to the east, down the Forth, by a vessel of any size cannot occur. At this place the contractor is driving railways, roads, and bridges through some of the finest arable land in Scotland, and I cannot understand what the object of this is, for no big ship and no destroyer can possibly come there. Stores and ammunition would have to be sent from the place—if it is a place for storing ammunition—by barges to a more convenient centre before war vessels could take them on board. I understand, further, that the contract is to last for five years, so that it cannot be war work; and by that tune I hope, whatever may happen to us, that we shall have won the war. It seems to me that there is a strong case for some explanation, not only of the terms of the contract, but of the whole object of the undertaking, and I trust that the noble Earl who represents the Admiralty in this House will be able to give us some satisfaction on these points.
THE ADDITIONAL PARLIAMENTARY SECRETARY of THE ADMIRALTY (THE EARL OF LYTTON)
My Lords, I am much obliged to the noble Lord for affording me an opportunity of giving an explanation of this contract. The facts regarding it are substantially as stated by the noble Lord in his Question, but in describing them he has, I think, given an implication of negligence or extravagance on the part of the Admiralty which I feel sure he will be ready to admit, when he hears my explanation, is not justified by the facts.
First of all, the noble Lord asked me what is the object of the work. I was not prepared for all the criticisms which he brought forward. I endeavoured to inform myself upon the points which the noble Lord placed upon the Paper. On some of the matters for which I was not prepared I am unable to answer him; but the object of the work is to create a sub-depot to 847 Crombie, and it is required for magazines and naval stores. I am not prepared at the moment to justify the choice of that place, but the noble Lord may rest assured that it would not have been selected, nor would the work have been allowed to be undertaken, unless the work was considered to be of first-class urgency and importance.
The terms of the contract which Sir John Jackson, Limited, are carrying out for the Admiralty at this place near Throsk are quite usual for Government work at the present time. The work is estimated to cost £350,000. The contractor is to receive for his profit 5 per cent. of the total cost of the work; the figure is quite correctly stated in the Question. It is 5 per cent. and not 10 per cent., although I may say that 10 per cent. is the usual manufacturers' profit for work of this kind. In addition, the contractor receives l½ per cent. for his London office expenses.
Then the noble Lord asks what supervision on the part of the Government is being exercised. The work is being supervised by the superintendent civil engineer at Rosyth. I may explain that a percentage on the cost of the work, plus a further percentage for establishment charges, is the almost invariable practice in Government contracts at the present time. I quite agree with the noble Lord that it is a bad principle, and that it necessarily tends more to extravagance than would an estimate for the total cost of the work. But the abnormal conditions of labour and cost of material at the present time make it quite impossible to obtain of any contractor a fixed price for the carrying out of work of this kind. It is very often necessary to submit to competitive tender the percentage which the manufacturer is to receive upon the cost of the work. In this case the rate of percentage is below the average, and the supervision of the civil engineer who represents the Admiralty is a protection against unnecessary cost.
I am unable to tell the noble Lord whether or not his statement about the time spent by the workmen in the train going to and returning from their work is correct. I will make inquiries upon it, but that is a point which the superintendent civil engineer would necessarily scrutinise in our interests. If it is true it would, imagine, be because it is impossible to get workmen resident on the spot or close at 848 hand. I am afraid I cannot give more information on that point.
As regards Sunday labour, this has recently been stopped all over the country by a decision of the Cabinet. It used to be very prevalent, and owing to the double rate of pay always given for Sunday labour it was naturally very popular with the work-people. The result was that contractors used to advertise freely that their men were employed upon Sunday labour, and it became almost impossible for any contractor who did not work on Sunday to obtain labour to carry out his work. I quite agree with the noble Lord that it was a thoroughly unsatisfactory system, and no one suffered more rom it than we did at the Admiralty. I am glad to say that this practice has now been stopped. No Sunday work is allowed except in special cases where it is necessary in order to enable the labour of the weekdays to be carried on without interruption—I mean upon such work as the blowing out of boilers, the shifting of railway lines, or altering water services; work which, if it were not done on the Sunday, would hold up the work on the weekdays. In this particular case special permission was given to work on three Sundays only, April 7, 14, and 21, within the terms of the Cabinet decision, to enable the contractor to construct a bridge over the stream to bring his material on to the site. Last Sunday was the final day on which Sunday labour was permitted, and there will be no more Sunday work until the completion of the contract. Of course, on these three Sundays the usual rate of extra pay for Sundays was paid.
As I have explained, the contract is in a perfectly usual form; we have nothing either to conceal or to apologise for in connection with it, and I hope that the noble Lord will see that it is not really deserving of the censure which I think he was inclined to direct to it.
LORD BALFOUR OF BURLEIGH
Will the noble Earl ascertain whether the 5 per cent. is or is not actually paid on the cost of the railway journey, and why the railway journey is taken fourteen to sixteen miles round, which I know to be a fact, when there is a railway of 1½ miles, over which I have gone hundreds of times myself, from the main point of population to the site of the works. Of course, I must not criticise, because I am quite sure the Admiralty 849 would never have selected the site unless they had examined it and thought over it; but it does seem to us locally an extraordinary thing that a site for storage should be put definitely above a bridge which closes the whole traffic on the river except twice a day at high tide.
THE EARL OF LYTTON
I will inform myself with regard to those points, and communicate with the noble Lord.