§ Mr. Hamling
asked the Secretary of State for Defence if he will now make a statement about the Departmental investigation into the way in which work is allocated to the Royal Ordnance factories.
§ Mr. Reynolds
Yes. The allocation of this work will continue to be governed by the "preferred source policy", under which orders for products in the factories' customary fields are placed with them rather than with outside contractors unless special factors apply, such as price or delivery considerations, the need for an alternative source of supply or the design rights of firms. In order to ensure that the Royal Ordnance factories are given as much defence work as they can undertake, arrangements have also been made to strengthen their association with new equipment requirements at an early stage, and where possible to extend their participation in the design and development work.
The possibility has also been examined of increasing the amount of civil work that can appropriately and economically be undertaken by the Royal Ordnance factories without detriment to their defence responsibilities. Contacts have been established or renewed with other Government Departments, the nationalised industries, other public bodies and outside industry which should help to provide a basis for building up the amount of civil work in the factories.