§ Mr. Meadowcroftasked the Secretary of State for Social Services (1) on what price basis medical gases are supplied to the National Health Service by the British Oxygen Company; (2) why his Department has allowed the British Oxygen Company to achieve a rate of return on capital on medical gases supplied to the National Health Service which exceeds the average for industrial and commercial companies, and the recommendation of the review board for Government contracts for competitive, non—risk contracts.
§ Mr. Kenneth ClarkeThe rate of return currently allowed to the British Oxygen Company is supplying medical gases to the NHS is based on the rate which was recommended by the review board for non-competitive "risk" contracts following its third general review. That report draws attention to the different types of risk contract, for example fixed price, target cost, and cost plus subject to a maximum price. BOC's business in supplying medical gases to the NHS does not fit these categories exactly, but the view was taken that the risk rate was more360W appropriate than the non-risk rate. In practice, BOC has no central contract and no guarantee that any given quantity of medical gases will be purchased over a particular period. The existing arrangements for pricing medical gases supplied to the NHS are being reviewed.