§ Mr. John GreenwayTo ask the President of the Board of Trade if he will make a statement on the contract which was assumed in the bid by the consortium which purchased the Laboratory of the Government Chemist. [33018]
§ Mr. Ian TaylorIn the answer I gave to my hon. Friend the Member for Birmingham, Hall Green (Mr. Hargreaves) on 2 April 1996,Official Report, columns 149–50, regarding the sale of the Laboratory of the Government Chemist, I stated that, in the event the purchaser was not awarded a contract which was assumed in the bid, there would be (a) payment of 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. Details of this contingent liability were notified separately to Parliament by way of a departmental minute, which was laid before the House on 1 April.
This contingent liability matured on 22 May as LGC was not awarded the contract: the sum of £300,000 was paid to LGC on 3 June from voted provision on class IV, vote 1. The purchaser will also be able to call on the redundancy indemnity, although a number of conditions apply to this indemnity including (a) the requirement for the redundancies to be related directly or indirectly to the loss of the specific contract, (b) the sum being capped at the lesser of £500,000 or the aggregate of the payments up to the first 18 relevant redundancies, and (c) its expiry after 12 months.