The manufacture of telecommunications equipment in Post Office establishments, excluding the cost of component parts purchased from industry, has averaged less than one per cent. of the total equipment purchases over the last few years. Precise figures for the output of the British telecommunications industry are not available, but, as regards the manufacturers who comprise the bulk of the industry, the percentage of their total output purchased by the Post Office for the three years in question has been 55, 52 and 50 respectively, at costs of £73 million, £55 million and £44 million.
I have at present no plans to open new factories for the manufacture of telecommunications equipment by the Post Office.
Would not my right hon. Friend accept that, in view of the deplorable figures he has quoted, the time is long overdue when the Post Office should itself be manufacturing much more of the equipment it requires? Does he not now see the opportunity for opening State-owned factories in the development areas?
Is my right hon. Friend aware that the General Secretary of the Post Office Engineering Union has said that the extension of the telephone system is being held up solely because of the failure of private manufacturers to provide sufficient telephone exchange equip- ment to his Department? As a result, will my right hon. Friend again seriously consider using the powers he will have under the new Act to start a factory in Dundee or some other area?
I know Mr. Smith's view very well, and, of course, he is absolutely right. The lack of capacity in the industry is holding up the growth of the system but, to be fair to those in the industry, they lack capacity now because the forecasting of telecommunications needs when the party opposite was in power was inadequate.