§ Mr. HanleyTo ask the Chancellor of the Exchequer if, pursuant to his answer of 4 April,Official Report, column 608, he will make a statement on the outcome of the price variation negotiations with Racal Data Networks Ltd. for the Government data network.
§ Mr. RyderI confirm that these negotiations between the Treasury and Racal Data Networks Ltd. (RDNL) have now been completed.
RDNL has the right under the Government data network contract to increase the tariff by 6.75 per cent. for the year beginning 1 April 1990. The company has agreed, 738W however, to limit the effective rate of increase over this period to 5.06 per cent. by applying this price adjustment from 1 July 1990 instead of 1 April 1990.
As foreshadowed in my answer on 4 April 1990, column 608, the Treasury and RDNL have discussed possible revisions to the Government data network contract. It has not, however, been possible to identify revisions which would be acceptable to both parties. The existing contract provisions will therefore remain in force.
As stated by my right hon. Friend the then Paymaster General on 22 June 1988, columns 599–600, Departments will continue to be free to compare alternatives to the Government data network to ensure best value for money. Hence RDNL will retain a strong interest in maintaining the Government data network tariff at a competitive level.