HC Deb 10 May 1972 vol 836 cc1301-3
20. Mr. William Hamilton

asked the Minister of Posts and Telecommunications if he will make a statement on the award to a Swedish firm of a £14 million order for Post Office equipment which he sanctioned.

22. Mr. Willey

asked the Minister of Posts and Telecommunications what purchases from abroad he has sanctioned of Post Office equipment; and in what circumstances he is prepared to sanction such purchases.

Sir J. Eden

I would refer the hon. and right hon. Members to the reply I gave to the right hon. Member for Sunderland, North (Mr. Willey) on 3rd May. The placing of individual contracts is primarily a matter for the Post Office, which is currently spending about £400 million a year with British industry.—[Vol. 836, c. 146.]

Mr. Hamilton

Is it not the case that the answer is the complete failure of the private enterprise companies which supply the Post Office with its equipment and that, despite the denials of the Minister, the ring still exists? Is it not the case that this is why the Post Office has to go abroad to get this expensive equipment at a time when there is so much unemployment in this country and people could be employed to produce the equipment here?

Sir J. Eden

The reasons are varied and various, including the difficulty of adapting the system, the difficulty of getting buildings completed on time and the results of industrial disputes in some of the factories, not least those in Scotland. But the reason why this order had to be placed was the anticipated growing demand in the international telecommunications services, particularly to Europe.

Mr. Willey

Is the Minister aware that his first concern ought to be unemployment and that the loss of 2,000 jobs in the development areas is a very serious blow? Can he say whether he has brought any pressure to bear in Ericsson's to open up a plant in this country to provide employment for our own people in the development areas?

Sir J. Eden

The major need here is to ensure that we have a steadily improving telecommunications service in this country, and one has to look ahead to the expected growth in demand and to provide as efficiently as possible to meet that on time.

Mr. Rost

Is not the attack made by hon. Members opposite on British industry in this case grossly unfair in view of the fact that the companies which are supplying British telephones to the Post Office are also exporting very substantially abroad?

Sir J. Eden

I confirm that that is so.

Mr. Gregor Mackenzie

I think the Minister will be aware that while we on this side have every sympathy with the Post Office in its dilemma nevertheless it is very disappointing when the private sector fails to win a contract of this kind. We would like the Minister to be a bit more specific and to say why this order was placed—whether it was on price or delivery or was because of the unwillingness of British suppliers to provide this kind of equipment? May I push the right hon. Gentleman a little further on one other thing? In the near future when the Post Office is reaching final decisions about future equipment, will he encourage the Post Office to do what the 1969 Act allows it to do—that is, enter into the manufacturing field on its own account?

Sir J. Eden

I do not think such a suggestion would be helpful in the circumstances. With regard to the first part of the hon. Gentleman's question, the Post Office came to its decision in the light of the various circumstances which it had to examine when considering the best way to meet the anticipated demand.