Sir Fredric Wise.

6695. I want to know the cost of this Royal Air Force Pageant which you have annually? The cost is met by a Special Committee. It is worked by a Committee, and the cost of putting up the stands, preparing the ground, and all the incidental expenses, are paid by the Committee, and the proceeds of the gate

money cover that; the balance goes to Air Force charities.

6696. There is no cost to the taxpayer? -There is no cost to the taxpayer.

Chairman.] You have had five days' examination, Sir Walter, and I should like, on behalf of the Committee, to thank you for the information you have given us.

Chairman.

6697. There is no Report on this, Sir Malcolm, and the Account, I think, is very largely formal? (Sir Malcolm Ramsay.) The Account is perfectly in order.

Sir Fredric Wise.

6698. What is the insurance of boilers; I thought the Government had no insurance? (Sir Oswyn Murray.) I am not quite certain what that item is; I could get that information for next time, and perhaps that would be the simplest course. (Sir Malcolm Ramsay.) I know generally; that item is a payment made for inspection of boilers to get a certificate that they are in order. (Mr. Fass.) Where there is a small service rendered,

such as the obtaining of a certificate, that takes it out of the general category of the principle that the Government does not insure, and possibly this is one of those cases.

Sir Robert Hamilton.

6699. When is it expected that the work at Peterhead Harbour will be completed? (Sir Oswyn Murray.) The last time an estimate of the time was given, was in 1921-22, and it was 10 years then. The length of time it is taking is due to the great decrease in the number of convicts we employ. The original estimate was that we should have a daily average of 500, and the average in 1924-25 was 127.

6700. It is purely convict labour that is used? Yes.

Chairman.

6701. Paragraphs 1 and 2, on page iii of the Comptroller and Auditor-General's Report, deal with the outcome of the Account? (Sir Malcolm Ramsay.) Yes;

Members will probably remember that a Supplementary Estimate for the Navy was presented to Parliament in February, 1925, to provide a sum of £220,000 for arrears of civil payments due under a Judgment of the

Court of Appeal; the opportunity was taken completely to recast the Navy Estimates of the year, and the result was that the revised Estimate was very close to the actual out-turn. The excess gross expenditure, for which this Committee has sanctioned a Vote, was something like 0075 per cent. of the gross Estimate, and the net surplus, which is £326,000, is 6 per cent. of the Grant.

6702. Would you like to add anything on the paragraph, Sir Oswyn ?-(Sir Oswyn Murray.) No, I think not.

6703. Have the Treasury anything to say? (Mr. Fass.) No, Sir. Even if there had been no Supplementary Estimate, the results would have compared very favourably with the previous year in the matter of out-turn, showing a continuing improvement on the figures of the previous years. The net excess at the time of the Estimate, in January, was only 1.5 per cent. of the gross expenditure, although, taking individual Votes, in some cases the excesses were substantial, and in other cases they were very small. (Sir Malcolm Ramsay.) There was a wide variation between various Sub-heads and different Votes, but the original total Estimate was extraordinarily close; much closer than it has been for a long time.

Sir Fredric Wise.

6704. There was no virement, or anything of that sort?-(Mr. Fass.) There was an Excess Vote, which gets rid of the occasion for virement by the Treasury, because it becomes virement by the House of Commons, by an Act of Parliament, and not by the Treasury.

Chairman.

6705. Paragraph 3 is what you call the constitutional one, Sir Malcolm ?—(Sir Malcolm Ramsay.) Yes, sir.

Colonel Assheton-Pownall.

6706. Was the reason for the average number of boys being 1,400 less than the Estimate, lack of recruitment?-(Sir Oswyn Murray.) No; we were actually trying to economise in the year, and we did not make all the entries that we anticipated at the beginning.

6707. 1,400 is a big number ?—Yes.

[Continued.

6708. It will affect successive years, when you have not got the men coming along?-It was partly difficulty in recruitment, but partly it was a deliberate attempt to keep the numbers down to the lowest possible figure. (Sir Malcolm Ramsay.) They recovered some of it by the end of the year; in the last Quarter there was a recovery.

Sir Fredric Wise.

6709. Although your personnel was greater in 1914 than it was in 1915 the staff at the Government Office is greater to-day than it was in 1914?-(Sir Oswyn Murray.) Certainly.

6710. How can you account for that? -Because the staff at the office only depends in a very small measure on the numbers of the personnel in the Navy.

6711. But there is such a big difference; there is almost 50 per cent. difference in the personnel?-There are whole blocks of the staff at the Admiralty that have nothing to do with the numbers of personnel; they have to do with material, or research, or the use of material.

6712. The one was greater by about 50 per cent. in 1914, and the other is greater by about 50 per cent. in 1925; it is a big difference?-It is a great difference, but it is due to the fact that the material is very much more complicated, and it is also due, in part, to the fact that we pay a great deal more attention to the comfort and well-being of the men now than we did in 1914.

Chairman.

6713. Paragraph 4 deals with a delay in recovering reconditioning expenses.(Sir Malcolm Ramsay.) Yes. The facts are set out in the paragraph. The point which struck me was that it was rather unfortunate that no claim on account of the work done for the Company was made about the time that she was returned to the owners; but there may have been subsequent developments of which I have not yet been informed.

6714. Sir Oswyn, probably the easier course would be for you to give the Committee any information you can, particularly on the last part of the para graph as to no payment on account being obtained before the release of the ship? -(Sir Oswyn Murray.) This was a somewhat complicated case. We were bound

to recondition the ship, that was one of the conditions on which she was taken over in 1914. The owners desired to take that opportunity to bring her up to date in some respects, and asked us to incorporate some work on their account. They also had a number of counter claims against us. For instance, the Admiralty were still, under the contract, liable to pay hire for the ship during the time she was being reconditioned, and there were other counter claims. The sum which the Company would, in the end, have to pay, would, in any case, not be anything like this large sum of £95,000. As a matter of fact, the Company themselves estimate it at about £8,600; and they made us a payment of that amount, which we have accepted on account; and the actual amount that we shall call upon them to pay has still to be decided, depending questions in connection with the hire and other counter claims that they have against us. At the time that this vessel was taken in hand we had not adopted the system of making people pay in advance when work was done for them in the Dockyard. We have since, in accordance with the opinion of this Committee, adopted that course.

Sir Fredric Wise.

on

6715. Do you insist on that abroad?We insist on that abroad also. I think, in any case, it probably would have been undesirable to apply that system when we were reconditioning this very large number of ships at the end of the war. I mean to say, I think the Crown would probably have been a loser, because the owners, I think, would at once have insisted on us paying up every claim they had against us, which in many cases was much greater than the cost of any works they were asking us to do. The account of this transaction given by the Comptroller and Auditor General only takes the question up to a certain point. As I have said, the discussions between us and the Company have gone a good deal further since then, and we hope that we will arrive at an amicable settlement. There was a regrettable delay between the date at which the work was done and the date when we first represented to the Company our view of what was due from them; that was due to the very great pressure of work in the clearing up of work payments in the

[Continued.

Admiralty, and it was a very exceptional case; it is the only case of its kind among many hundreds of reconditioning claims we had to deal with.

Sir Henry Craik.

6716-6717. You say there is a prospect of your arriving at an amicable solution. Your claim is £95,000?—(Sir Malcolm Ramsay.) Less.

6718. Why do you say less? I am looking at this paragraph?-That was the original sum.

6719. Very well, the cost was £95,000. They have paid £8,000 and you say you see every prospect of an amicable solution? (Sir Oswyn Murray.) Because there are various counter claims which I do not think we shall dispute. They are quite fair counter claims.

6720. Part of your original claim was, I understand, carried out at the request of the Company, who wanted to take the opportunity of making their ship up to date. I am recalling your own words.Yes, that is so.

6721. You are doing work convenient for this patriotic Compnay, and they immediately made an embargo upon you that you should bring their ship and certain things up to date, an expenditure which would have fallen upon them in any case in the course of their business, but they thought proper, in making this contract, to lay it upon the Admiralty?— No; we were under contract to recondition the ship, to put it back in the original condition.

6722. If you were under contract, what was the need of their making any claim that you should put their ships back, not into the condition that they were, but to improve them in certain respects so as to bring them up to date?-That was not a claim on their part, that was a request, and we at the time were very glad to do the work in Portsmouth Dockyard.

6723. Was there no settlement as to when it should be paid and what it should cost?-We had got to recondition the ship in any case, and we had decided to recondition it in Portsmouth Dockyard. The Company desired, while the ship was being reconditioned, to have it altered in certain respects, and it was advantageous to us to have the extra work involved for our men in Portsmouth Dockyard.