National Engineering Laboratory: Privatisation (Hansard, 20 November 1995)

§ Lord Chesham
My Lords, as the Minister of State for Science and Technology announced on 31st October, the consideration to Her Majesty's Government for the National Engineering Laboratory was a negative £1.95 million. This may be adjusted subsequently in the light of the level of net current assets at the date of completion. The successful purchaser, Assessment Services Limited, was selected because it met fully the department's objectives for the sale and because its bid represented the best value for money option. The sale represents substantial savings to the taxpayer compared with the benchmark.

§ Lord Haskel
My Lords, I am sure that many noble Lords will share my dismay at the Minister's response. Is he satisfied with this arrangement, or does he share my dismay and disbelief that we have to pay £1.95 million to a firm to take away all the intellectual knowledge and the work of 223 engineers and technologists who have been with the National Engineering Laboratory for many years? Is the Minister satisfied with this arrangement?

§ Lord Chesham
My Lords, yes. None of the bids was for a positive sum. Assessment Services Limited was chosen as the preferred bidder because its bid fully met the department's objectives. It was better than the other bids and represented better value for money than our benchmark. The sale represents substantial savings to the taxpayer compared with the benchmark. This is a good solution for the Government and NEL. The strengths of Assessment Services Limited complement those of NEL. They plan to build on those combined strengths to produce a company which will be successful in world markets for engineering services. The department's need for flow measurement work under the national measurements system will continue to be met.

§ Baroness Farrington of Ribbleton
My Lords, is there any other example of a private sector undertaking paying someone to take over at a time when there are 130 contracts worth £18.3 million on the order books and when taxpayers have made millions of pounds worth of investment in an outstanding project? Does the Minister not accept that there appears to be one government law when it comes to private individuals protecting their interests, but that the Government pay scant regard to the interests of the taxpayers of this country?

§ Lord Chesham
My Lords, I have already pointed out that this arrangement is producing substantial savings to the taxpayer, and that is why it has been done. As regards the other questions, we believe that privatisation is right in this instance and there are substantial savings for the taxpayer.

§ Lord Rea
My Lords, can the noble Lord assure us that the new private sector management of Assessment Services Limited will continue to support the current lines of research, some of which may have no immediate pay-off but may lead to discoveries of fundamental importance in future years?

§ Lord Chesham
My Lords, yes. We believe that the company which has now taken over NEL will continue to provide the services required by the Government. It is a highly reputable company and we have every reason to believe that we shall get the required services from it.

§ Lord Peston
My Lords, noble Lords opposite have been highly supportive of the answers which have been given, so I assume that they understand what has been said.

A Noble Lord
Never!

§ Lord Peston
My Lords, can the Minister explain how the National Engineering Laboratory is an asset which complements the assets of the people who are obtaining it and yet the taxpayer gets no net financial benefit? Speaking in an ordinary common sense way, that makes no sense to me whatever. I should have thought that we could at the very least get a net zero outcome. If one or two of us had been involved we might have made some money for the taxpayer. Is the noble Lord aware how absurd his answers sound to ordinary lay people?

§ Lord Chesham
My Lords, I do not think that I would ever refer to the noble Lord as an ordinary lay person. The point is that if through privatisation we reduce the taxpayer's expenditure in the future, there is a net benefit to the taxpayer from such action.