HC Deb 12 May 1965 vol 712 cc492-4
5. Mr. William Hamilton

asked the Postmaster-General what steps he is taking to ensure that the Post Office manufactures more of its own equipment.

10. Mr. Sheldon

asked the Postmaster-General what is the present extent of manufacturing capacity under his control; what plans he has for the further employment and development of these resources; and if he will take steps to remove the restrictions which prevent their expansion.

Mr. Benn

The Post Office has factories in London, Birmingham, Cwmcarn, Monmouthshire, and Edinburgh, employing some 2,750 staff. Their main task is reconditioning used equipment, and this enables them to provide between a quarter and a fifth of our annual requirements for telephone instruments. Some 17 per cent. of factory resources is employed on manufacture of small amounts of non-standard equipment, items of special design or for experimental use. I am studying the question whether there is scope for the factories to produce other items, and whether outside markets might be found.

Mr. Hamilton

Are there any great technical difficulties in increasing the proportion of supplies manufactured directly by Post Office personnel? If there are, will my right hon. Friend give an assurance that he will push on with this matter with all speed?

Mr. Benn

I assure my hon. Friend that this is a point in which I have taken an interest. In fact, there are no spare resources in the factories at present. Although there is some expansion at Cwmcarn and some shift working has been introduced, the future development of these potentialities depends on investment decisions, on technical "know-how" and on diversion of resources, and we should have to consider it in that context.

Mr. Sheldon

Does not my right hon. Friend agree that it is shameful that so many of the activities of the Post Office have been restricted from expanding in their natural direction? Is he aware that many progressive industries expand in vertical forms and that we expect such progress from the Post Office?

Mr. Benn

My hon. Friend's Question very much reflects my own attitude to Post Office expansion.

Mr. Shepherd

Is it not a fact that the Post Office has quite a lot of work to do in the successful and efficient operation of its own services, and the right hon. Gentleman would best serve the public interest by making certain that there is true competition in the supply of manufactured items to the Post Office?

Mr. Benn

That is another question, to which I referred in the debate on 30th March, and there is a Question down about it today. But I could not for a moment accept that public enterprise should be any more limited in its expansion programme than private enterprise.

Mr. McInnes

Could my right hon. Friend say what percentage is manufactured in Scotland?

Mr. Benn

Not without notice; but, as I said, there is the Edinburgh factory.

Mr. Fell

But if the Post Office is to manufacture more of its own equipment—and there may or may not be a case for it—can we be satisfied that it will keep separate accounting for its manufactures and that all tenders for equipment will be put outside as well as inside the Post Office so that it is clear that the Post Office is competing on proper terms?

Mr. Benn

Post Office factories engaged in manufacture up to 1951, when manufacture for these general purposes was stopped as a deliberate act of policy.

15. Mrs. Renée Short

asked the Postmaster-General if he will take steps to end monopolistic practices in the supply of Post Office equipment.

16. Mr. Hamling

asked the Postmaster-General if he will take further steps to deal with monopolistic practices in the supply of Post Office equipment.

Mr. Benn

I assume my hon. Friends have in mind the bulk supply agreements for telephone apparatus and exchange equipment. I would refer them to what I said in the debate on 30th March last.

Mr. Hamling

Is my right hon. Friend aware that in asking for more competition in the supply of these things we shall have the valued support of the benches opposite, notably of the hon. Member for Cheadle (Mr. Shepherd).

Mr. Chichester-Clark

Will the Postmaster-General say what is the intention about monopoly buying of exchange equipment? Will he also say something about the position of firms which make this type of equipment in development areas?

Mr. Benn

There is a separate Question about development areas which are covered by a separate agreement. The position with the existing agreement is that the Government are tied by agreements signed by the previous Government, although, as I made clear in the debate on 30th March, we have oursleves concluded that the telephone apparatus agreement serves no useful purpose. Negotiations to get it terminated by mutual consent are now in progress. As I said in the debate, much more complex questions, both technical and financial, are raised with exchange equipment and the important thing is to get a good agreement to replace the existing one when it comes to an end. All this is made more complicated by the fact that telephone demand has reached explosive proportions far in excess of those anticipated in the White Paper only 18 months ago.