HC Deb 27 July 1960 vol 627 cc1621-2
13. Mr. Darling

asked the Postmaster-General what arrangements he makes for an independent costing of contracts given to manufacturers for the supply of telephone equipment.

Mr. Bevins

The Post Office employs its own professional accountants and technical costs officers to investigate the books and the methods of production of contractors. We have complete freedom to decide which contractors shall be investigated and the extent of the investigation. We then negotiate prices as closely as possible in accord with the costs of the most efficient producers. The prices so fixed are paid uniformly to all the suppliers.

Mr. Darling

Is the Postmaster-General satisfied that that arrangement works satisfactorily in view of the statement made recently by Mr. Stanley that equipment could have been supplied at lower cost if this manufacturers' ring was not in operation? If Mr. Stanley's statement is correct, does it not seem that the taxpayers have been overpaying for a considerable time and that we might have lost millions through supporting this manufacturers' ring.

Mr. Bevins

Mr. Stanley has made a lot of statements in recent weeks, not all of which have been completely accurate. At the moment, I am satisfied that our existing practice is right, that our cost accountants are most careful to ascertain the actual costs of production and that the lowest costs are applied to all Post Office supplies. In regard to the assertion that Continental costs of production are lower than in this country, I have been at some pains to collate evidence on that and I find that the cost of the French handset is rather more expensive than the corresponding article in this country. The German handset is cheaper than that produced in this country, but I should add, in fairness to the Post Office, that the total cost of the handset and of installation in Germany and in this country are almost identical.

Mr. Mason

Can the right hon. Gentleman enlighten the House and say what profit margin is allowed within his costing arrangements with these companies?

Mr. Bevins

If the hon. Member would care to put down a Question about that. I should be glad to answer it.