§ Mr. Matthew BanksTo ask the Chancellor of the Exchequer if he will make a statement about the privatisation of the Paymaster agency. [16092]
§ Mr. OppenheimConditional agreements for the sale of both the pensions and banking businesses of Paymaster, together with its IT support and its building in Crawley, were exchanged with a joint venture between EDS and Hogg Robinson yesterday. These are subject only to Transfer of Undertakings (Protection of Employment Regulations 1981) consultations, which can begin with the company at once.
The £22.7 million consideration agreed with the purchasers represents a good outcome for the taxpayer. The purchasers have made it clear that they intend to develop the business through the winning of new contracts and the transfer-in of other existing business, and to continue operations from its current Crawley and Basingstoke locations, so the outcome is equally good for the agency's staff and customers.
On the pensions side, the schemes will, of course, continue to be funded and have their rules set by sponsoring Government Departments, which will also remain responsible for ensuring service levels; only the administrative functions are being contracted out to the privatised agency.
On the banking side, I announced on 31 October 1996, Official Report, column 255, the creation of a new Office of HM Paymaster General as a separate statutory body within the National Investment and Loans Office to maintain control over the Paymaster General's accounts at the Bank of England. The privatised agency will supply transaction services to this office on behalf of its departmental and other public sector customers.
I believe that this is an excellent outcome for all. The purchasers are eager to keep the present business intact and to build on the service improvements introduced in recent years by the current management. They bring formidable IT and transaction-processing expertise to support those efforts, combined with a powerful private sector pensions reputation and marketing experience. Paymaster can look forward to becoming a player of repute in the private sector market that was previously closed to it, and customers can expect even higher service levels and more competitive prices in future.