HC Deb 24 July 1962 vol 663 cc1261-2
20. Mr. Arbuthnot

asked the Postmaster-General whether he has yet reached a decision regarding the future of the Post Office bulk supply agreements for the purchase of telecommunications equipment; and if he will make a statement.

Mr. Bevins

I have given the most thorough consideration to the bulk supply agreements made by the Post Office with the principal telecommunications manufacturers. I have decided to change the present arrangements.

I am informing the manufacturers concerned that I propose to purchase all cable and loading coils as from April next by competitive tender. I am also proposing that, when the telephone apparatus agreement comes to be renewed next April, provision should be made to increase the proportion of orders that may be placed outside the agreement from 10 per cent. to 25 per cent. I regard the exchange equipment agreement as being a special case, and I propose to continue it.

Mr. Arbuthnot

Will my right hon. Friend bear in mind that the announcement he has just made will, so far as it goes, be received with great satisfaction by all members of the Public Accounts Committee on both sides of the House, but will he say why the proportion is only to go up to 25 per cent.? Would he also say why he regards the exchange equipment agreement as being a special case to be continued?

Mr. Bevins

I think that the increase in the reservation provision for telephone apparatus from 10 per cent. to 25 per cent. is, for the moment, just about as far as we can go, but there we must wait to see what the reaction of the manufacturers is before we see the shape of things to come. I think that the exchange equipment agreement is a special case and one that does not lend itself to competition. This is highly specialised equipment, and, of course, the Post Office works in the closest co-operation and partnership with the principal manufacturers in quite refined electronic developments.

Mr. Mason

Is the right hon. Gentleman aware that this side of the House welcomes his statement because he is at last starting to break down the monopoly position of the manufacturers' "ring"? There is the question of the ring keeping its monopoly position in regard to exchange equipment. Is not the Postmaster-General aware that a month after the Public Accounts Committee reported, a further merger took place inside this particular ring and that the Plessey Company, the Automatic Telephone and Electric Company and Ericsson Telephones merged in a £55 million merger and captured 40 per cent. of all the telecommunication and telephone equipment supplied to the Post Office? Will he say to what extant now this ring, or this combine within the ring of firms, will be able to carry on in its monopoly position in regard to exchange equipment?

Mr. Bevins

There is no monopoly position in the sphere of exchange equipment. I think that the steps I have announced to the House this afternoon represent a vary reasonable move towards genuine competition in this field, and I think that we would be very well advised to see how the new arrangements work out before coming to further conclusions.

Mr. W. R. Williams

I take it that the Postmaster-General has it in mind to review these agreements periodically, and at much more frequent intervals than in the past?

Mr. Bevins

Yes, Sir, certainly. After a reasonable interval of time we shall see how the new arrangements are working out and shape our course accordingly.