POST OFFICE FACTORIES (Hansard, 9 December 1953)

§ Mr. Roy Jenkins (Birmingham, Stechford)
I am glad that the hon. Lady's respect for the rights of Private Members has led her to terminate her remarks.

Miss Ward
I apologise to the hon. Gentleman. Mr. Jenkins:The subject I want to raise tonight is also a Post Office matter. It is concerned with factories which are owned and operated by the Post Office. These factories deal with telephone, and, to some extent, with telegraph equipment.
The point at issue which I want to discuss is the balance between the repair work and the constructional work which is done in these factories. I think that these factories are grouped in a total of four units, the largest of which is in Birmingham. Two thousand out of a total of 4,000 are employed in Birmingham, and the biggest factory is on the edge of my constituency. The people employed there are largely constituents of mine, and they are certainly very concerned at the moment about the restrictions which are placed on the constructional work which these factories are able to do, and about the fact that the policy is to confine them to repair work.
I am aware that this is not a new policy. It was the policy which was 2139 applied in the years before the war. Indeed, it may be considered by the Post Office to be bound up with the system of bulk supply agreements which they have with a number of private contractors. I think there are five for telephone equipment, and eight, including these five, for telephone stores. This system of bulk supply agreements was begun, I believe, in 1938.
During the war, whether because private firms were busy with other work or for some other reason, these Post Office factories, without any change of policy, undertook a certain amount of constructional work. As a result of that, their equipment and their labour force were built up to suit them for a role which was at least partly constructional. That position persisted for quite a number of years after the war. But, more recently, there has been a change. I think that the Assistant Postmaster-General will agree with me that there has been a change of method, or at any rate in the policy of the Post Office on this matter. I think I am right in saying that about two years ago a directive was issued stating that the amount of constructional work must be cut back quite substantially, and that the factories were to revert almost exclusively to repair work.
This directive came about at a time when the employment situation in the Midlands was not looking so healthy as it has most of the time since the war, and it has caused a good deal of fear among those employed in the Birmingham factories that there would be redundancy and short-time working. I admit that this redundancy and short-time working has not occurred, but, none the less, the doubts about the policy remain in the minds of the men employed in the factories, and certain consequences have come as a result of this change which has taken place in the last year or two.
For instance, I am informed that there has been quite a substantial decline in the number of skilled engineers employed in them. I am informed that the number has gone down from about 150 to something like 110. It has not gone down through dismissals, but largely because these men, due to the uncertainty created, have been seeking 2140 jobs elsewhere, and as they have left they have not been replaced. I think it is also the case that the skill of the men who remain in the factory is not being very fully used at the present time. There is also evidence that some of the expensive equipment which has been installed is not being fully used. I think this applies particularly to the tool room and to the cabinet shop in the Birmingham factories. I am informed that the tool room plant could carry up to three times as much work as it is doing at present.
In the cabinet shop the skilled cabinet makers are partly wasted, doing largely unskilled work because, as a result of this shift of policy, there is not the skilled work available. As a result, the morale in the factory is rather low. There is an unsettled feeling. The men are inclined to look around for jobs elsewhere because they feel that the future, particularly if they are skilled men, is rather clouded in this Post Office employment.
Nothing I say is intended to be a criticism of the management of this factory, which I think is very good. There is a new young manager there, who I think has pursued a very go-ahead policy, and certainly has done a lot to keep the factory as fully occupied as he possibly can. It is really a matter of much higher policy, and I should like to ask the Assistant Postmaster-General a number of questions.
First, why is it considered desirable that these factories should do as little constructional work as possible? I hope he will not just answer that question by saying that that has been the policy as laid down for a long time. I hope he will give me a more substantial reason for it. In this connection, I hope he will bear in mind that there are grave and obvious disadvantages in under-using public equipment which has been installed at public expense, while very large contracts have been put outside to private contractors. I hope he will also bear in mind that it might be a very useful check on the efficiency and the costs of private contractors if some comparable work was done in public factories, particularly as I understand that when this work was done there the prices were, at the very least, thoroughly competitive.
2141 I hope the hon. Gentleman will also realise that the Select Committee on Estimates which considered these matters, three years ago, was rather doubtful about the efficiency aspects of the present system of contracting. They said that, at first sight, the system did not appear to give any incentive to efficiency, but the industry—and only the industry—claimed that this was very far from being the fact. This being so, there would be certain obvious advantages in having a check on the efficiency of these firms by means of carrying on some manufacturing in the public factories.
Beyond that, if the hon. Gentleman is not able to give a satisfactory answer indicating that more constructional work can be done, I hope that he will be able to give an assurance that the volume of repair work which will be coming forward will be adequate to keep these factories fully employed and adequate to give reasonable work to the skilled men who are employed there. That is not the case at the moment.
I understand that there was a meeting between one of his high officials and representatives of the shop stewards from the Birmingham and London factories, which took place on 18th November, when the shop stewards gained the impression that a very substantial amount of telegraph work running into several thousands of pounds will be forthcoming. They are now doubtful whether that is to happen, and if the Minister could say something about that it would be extremely helpful. I hope he will treat these points seriously.
The men who have made representations to me are concernd, as they have every right to be, about the future of their jobs. I am convinced that they are also genuinely concerned that a good deal of publicly owned and publicly installed valuable equipment should be used to the greatest possible advantage.

§ The Assistant Postmaster-General (Mr. David Gammans)
I am grateful to the hon. Member for Stechford (Mr. Roy Jenkins) for bringing up the question of Post Office factories. It is a side of the Post Office work about which the public knows very little.
I think I can deal with most of his misgivings satisfactorily. There are, in fact, eight Post Office factories—not five, 2142 as he said. There are three in London, three in Birmingham, one in Wales and one in Edinburgh. Today, these factories are employing, roughly, twice as many people as they were before the war. What are to be their functions? As early as 1910—as the hon. Gentleman said—there was a committee on this subject, and it presented a report to Parliament, which Parliament accepted.
The report recommended that the factories should gradually abandon construction work and concentrate chiefly on repairs, but it made certain exceptions. It thought that there was certain construction work which the factories ought to continue to do. It thought that the factories should make certain specialised items and be allowed to make any special pattern apparatus which was required only in small quantities, and should carry out experimental work. That gave a basis for skilled labour and also, to some extent, the very check which the hon. Gentleman mentioned.
That policy remained in force for 40 years, but was abandoned during the war—perhaps "lost sight of" would be a better term—partly because of urgent work where the price was no longer a factor and partly because outside contractors had other things to do; but as soon as the war was over the factories once more got back to their normal activities. In 1950, they were examined by the Select Committee on Estimates. The recommendation was made—and the Committee accepted it—that we should revert to the pre-war practice.
It was as a result of that decision that the directive to which the hon. Gentleman referred was issued. But it has not led to any premature retirement of any members of the staff. What has happened is that a certain number of men over the age of 65 have retired. It is true that they might have been kept on had there been the demand for skilled labour and for older men that there was during the war, but what we have done is to keep a nucleus of very highly skilled men fully employed to do the type of construction work which I mentioned. That work is still being carried on. The men are still making prototypes and certain specialised items, although we have not quite got back to where we were before the war, as I shall explain in a moment.
2143 The hon. Gentleman asked if any equipment was lying idle. The answer is "Yes." There is a certain amount of equipment lying idle. The reason is that these factories were equipped during the war with far beyond what would be regarded as the normal equipment. The hon. Gentleman asked why we could not let them do more construction work. If we did, it could only be done at the expense of the private companies. It would mean that if more men were taken on by the Post Office factories fewer men could be taken on in the other factories.
The reason why the main part of the new construction is done by outside firms is because, over many years, the Post Office has found it cheaper. After all, we are dealing with the taxpayers' money. Another reason is because the work that these companies do outside is extremely useful to us in the export field, and without the basis of home orders it is difficult to see how they could be as successful as they have been hitherto.

§ Mr. Roy Jenkins
The hon. Gentleman referred to the Select Committee on Estimates. I am sure that in this connection, if not in others, he has read the evidence. That evidence quite specifically stated that so far as costs were concerned the Post Office factories had been fully competitive, if not a little more.

§ Mr. Gammans
Yes. Taking it over the years, one of the reasons why the Post Office has not manufactured more of its own equipment is because of the cost factor, but that is not the only factor. I do not think that we want to get into 2144 a state of affairs where we manufacture a very large part of our equipment. I can see that the hon. Gentleman has doubts in his mind. He probably represents many men who work in these factories. I think I can give him the assurance that there will not be any new policy which is likely to affect them in any way adversely.
Although I said just now we were reverting to our normal practice we are still employing twice as many men as before the war, and also still have a greater percentage on new construction and a smaller percentage on repairs than before the war. I can give the figures. In 1938, 14 per cent. of the staff were employed on new construction and 86 per cent. on repairs; today, 25 per cent. are on new construction and 75 per cent. on repairs.

§ Mr. Roy Jenkins
Is it the intention to remain on the present proportions or to go back to the pre-war ones?

§ Mr. Gammans
I should not like to be definite, but I can assure the hon. Gentleman that there is nothing Machiavellian about all this. There is not to be any drastic change of policy that may affect his constituents or the men in the factories in other parts of the country. I hope that from the information I have been able to give him the hon. Gentleman will be able to assure those of his constituents who may be interested.