§ Mr. HargreavesTo ask the President of the Board of Trade if he will make a statement on the sale of the Laboratory of the Government Chemist. [24761]
§ Mr. Ian TaylorThe Government completed on 31 March the sale of the Laboratory of the Government Chemist to LGC (Holdings) Ltd., a company formed by a150W consortium lead by the chief executive, Dr. Richard Worswick, and comprising LGC management and staff, the Royal Society of Chemistry and 3i Group plc.
The intention to privatise LGC was announced by my right hon. Friend the Member for Henley (Mr. Heseltine) on 14 April 1994.
On 10 November 1995, the consortium was selected as the preferred bidder after extensive evaluation against the Department's objectives for the sale and a wide range of quantitative, technical and financial criteria which demonstrated that their bid represented the best value-for-money option for the Department.
The consideration will be a payment of £360,000 to the Department, to be adjusted subsequently in the light of the level of net current assets at completion. At the same time, the Department will be making a payment to the purchaser of £1.96 million to relieve the Department of the liability for (a) site separation work to allow LGC to untie from the national physical laboratory on the Department's Teddington site, and (b) building dilapidation works; the purchaser will take on the entire responsibility for the successful completion of these projects.
In the event that the purchaser is not awarded a contract which was assumed in the bid, there will be (a) payment to the purchaser of £300,000 to forestall consequential redundancies and to enable it to develop alternative business streams, and (b) an indemnity for the cost of any such redundancies up to a maximum sum of £500,000.
Dr. Worswick has been reappointed as the Government Chemist. Virtually all the staff in the undertaking will transfer to the purchaser.
This represents a highly satisfactory outcome for Government and for LGC. The unique combination of the existing management and staff, the RSC, and 3i will allow LGC to forge a new future as a successful commercial enterprise, building on its existing strengths in analytical chemistry. At the same time, LGC will continue to meet the Department's needs as the centre of excellence in chemical metrology. The involvement of the RSC will help to maintain LGC's independence and impartiality which is of particular importance for the discharge of the Government Chemist's statutory responsibilities. I particularly welcome the confidence shown in the laboratory by the staff, many of whom will be investing in the new company to be operated by the purchasers.