HC Deb 27 July 1960 vol 627 cc1624-7
17. Mr. Mason

asked the Postmaster-General what estimate he has made of the effect of the recent take-over bid by Pye of the Telephone Manufacturing Company upon the ordering of telephone and telephonic communications equipment by his Department; whether any reduction in prices of telephone instruments can be expected; and whether a fresh agreement will have to be negotiated with the new company concerned.

Mr. Bevins

The Post Office does not have a separate agreement with the Telephone Manufacturing Company, which is a party to the bulk supply agreement for the supply of telephone apparatus. The transfer of control of the Telephone Manufacturing Company will not, of itself, require a new agreement, or a change in the system of ordering.

Uniform prices apply to all orders. These prices are fixed from the currency of the agreements as the result of cost investigation of the companies considered by the Post Office to be the most efficient. It is too early to say whether the change in the control of the Telephone Manufacturing Company will lead to a reduction in prices.

Mr. Mason

On the question of production prices, may I take it from the Minister's reply, and particularly from what he said earlier to my hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling), that he has no confidence whatever in the statement of Mr. Stanley that he would be responsible for reducing prices? Is it not a fact that members of this ring are in a privileged position and that only they can enjoy Post Office contracts? How does the Postmaster-General know that we are getting value for money when ordering this telephonic equipment When no other firm is allowed to compete?

Mr. Bevins

The second part of that supplementary question is not quite true. If the Post Office is satisfied that it could profitably use the services of a company outside what the hon. Member calls the ring, it would be possible to order 10 per cont. of our annual requirements from such company or companies. If any of the companies which are party to the bulk supply agreements are able to manufacture equipment, whether telephone, cabling Or anything else, more cheaply than is done at present—that could conceivably happen in the new circumstances—that would lead to a saving all round to the Post Office.

Mr. Mason

How many times has the Postmaster-General contracted out in the past three years while the agreement has been in being?

Mr. Bevins

There was one occasion about twelve months ago when the Post Office invited firms outside the ring to contract for cabling. No tenders were received. At present, we are considering the advisability of going out to tender for another bulk supply.

18. Mr. Mason

asked the Postmaster-General if he will consider referring to the Monopolies Commission the Temco system of providing telephonic communications equipment to the Post Office.

Mr. Bevins

The Post Office has no agreement with Temco as an individual company. It is one of the eight companies with which the Post Office has a composite agreement for the supply of telephone apparatus. The question of a reference to the Monopolies Commission is a matter for my right hon. Friend the President of the Board of Trade and I would refer the hon. Member to the Answer given by my hon. Friend the Parliamentary Secretary to the Board of Trade to my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) on 19th July.

Mr. Mason

Is not the right hon. Gentleman aware that it was he who referred that Question to the Parliamentary Secretary to the Board of Trade after it had been addressed to the Postmaster-General? Is not this a monopoly? In view of the pressure from both sides of the House concerning the existence of this ring, which is in a monopoly position, is it not time that we had either a reference to the Public Accounts Committee or an independent investigation by an outside body?

Mr. Bevins

The question which my hon. Friend the Parliamentary Secretary to the Board of Trade referred to me was a supplementary question as to whether a Government Department was being held to ransom in this matter, and it had nothing to do with a reference to the Monopolies Commission or with making a reference to the Restrictive Trade Practices Act.

Sir R. Grimston

Is it not a fact, whatever else may be said about this bulk supply agreement, that it has been in force for many years and during the whole time when the right hon. Gentleman the Member for Caerphilly (Mr. Ness Edwards) was Postmaster-General?

Mr. Bevins

That is perfectly true. This agreement has been in force for a period of about thirty years under Governments of varying political complexions, and, what is more, as I said last Wednesday, these arrangements have been vindicated both by the Public Accounts Committee and various other bodies during that time.

Mr. Paget

Is not the truth of the matter that the Post Office, having regard to its own experience and the experience of foreign post office companies, has come to the conclusion that competition is a thoroughly bad thing?

Mr. Bevins

That, of course, is precisely where the hon. and learned Gentleman and I differ. I am prepared, as, indeed, are my hon. Friends on this side of the House, to look at these questions on their individual merits, and not to be doctrinaire.

Mr. Ness Edwards

Is not the position applying in the ring that the Standard Telephone Company is doing something in this country which by law it is prevented from doing in the United States and will not the right hon. Gentleman have regard to this fact, that a new agreement has been made within the last three years and that this agreement has never been under consideration by any Committee of this House?

Mr. Bevins

I am not responsible for the laws which are on the statute book in the United States of America. I am concerned with the position in this country.