HC Deb 12 May 1964 vol 695 cc212-3
23. Mr. Dempsey

asked the Postmaster-General, in view of the fact that tendering by companies for reservation clause business materially alters the condition of tendering and the risks involved for non-ring manufacturers, what steps he takes to advise non-ring companies that tenders are to be invited from ring companies' subsidiaries; and what further steps he proposes to take.

Mr. Bevins

The whole industry has been well aware of Post Office practice since I answered a Question put to me by the hon. Member for Barnsley (Mr. Mason) on 31st July last, and I do not think that any further steps are necessary.

Mr. Dempsey

Will not the Minister agree that permission to ring subsidiaries to apply for reservation clause business strikes at the very root of giving protection to some firms, especially in the development districts or growth areas in Central Scotland, for example? Is not the right hon. Gentleman aware that, unless some effective steps are taken, we shall have complete monopoly and domination on the part of the ring companies to the detriment of the employment prospects in areas like North Lanarkshire?

Mr. Bevins

No, I do not agree. I see nothing wrong in allowing subsidiaries of the companies which are parties to the bulk supply agreements to tender for reservation clause business. The wider that we can open the field the better it will be.

Mr. Mason

Will the right hon. Gentleman say how many companies, while linked with the ring firms, have received contracts under the reservation clause for exchange equipment and telephone apparatus? In view of the fact that the right hon. Gentleman allows this to happen, does he think that he is getting competitive tendering?

Mr. Bevins

In 1963–64, out of 46 firms invited to tender for telephone apparatus, 11 were subsidiaries of the agreement firms, and six out of 37 were invited to tender for exchange equipment. I think the prices that the Post Office is currently paying are evidence that this practice is right.

Sir J. Langford-Holt

Did not the Public Accounts Committee recommend that firms outside the ring should be given an opportunity of tendering? Does it not go against this recommendation when subsidiaries of ring firms are considered to be outside the ring? It is nonsensical.

Mr. Bevins

I do not agree with my hon. Friend. What the Public Accounts Committee recommended was that the Post Office should invite tenders from firms outside the agreements. These firms are outside the agreements up to the full limit permitted by the agreements, and this is evidence of determination to widen the field of supply. It is important that the Post Office should observe the practice of making sure that these subsidiaries are effectively independent production units.