171. Given size and given the percentage of the pay compared to the cost of the advisers it is a much, much higher percentage than in almost any other privatisation. Is this just so much more complex than any other privatisation to justify these fees?
(Ms Lomax) I quote back to you what the NAO says, "as each deal is different any comparisons have to be treated with care. As a proportion of the value of the assets sold the transaction costs are higher than average but not evidently unreasonably so given the need in this case to negotiate an on-going PPP as opposed to a more straight forward trade sale."
172. I find it very interesting that at the beginning you mentioned there was no public sector comparator for this privatisation, were you aware that members of Parliament were told this was not a privatisation?
(Ms Lomax) I did not say it was a privatisation. I said, in privatisations there was not one.
173. Why did you make that comparison?
(Ms Lomax) It was a partial share sale.
174. What is that, a partial privatisation?
(Ms Lomax) Yes, it is a partial privatisation, is it not, but of a particular and innovative kind which safeguards the concerns that members on both sides expressed very strongly.
175. Can you clarify why the Department while this process was being undertaken was telling members of parliament it was not a privatisation?
(Ms Lomax) It is not a simple privatisation, it is a public private partnership.
176. It is not privatisation then?
(Ms Lomax) It is not the same as a privatisation, no. The idea of a public sector comparator is of relevance, I suggest, in situations where there is not a policy decision to do it, as there was in privatisation. This reflected a policy decision to sell off some of the shares in NATS, to sell equity interest and to seek a strategic partner for NATS. It went through the House of Commons and it was extensively debated. It is not something that was a sort of value-for-money decision by a civil servant.
177. I think my point has been made.
Chairman
178. We are going to have to read the transcript, I thought you said in answer to questioning from Alan Williams you were saying something along the lines of we do not have public sector comparisons in privatisation.
(Ms Lomax) Would it be helpful if I clarified what I tried to say because one does not always say absolutely what one means the first time round. I was trying to say that public sector comparators are not the invariable rule, we do them for PFI projects but we do not do them for privatisations, where there is a much greater degree of political involvement, including in the House of Commons. With a PFI deal, it would not go through the House of Commons, it would not be such a political issue, it would be a value-for-money decision. As accounting officer, I would need to satisfy myself that it was good value for money. NATS was much more in the political arena of policy decision.
179. Was that yes or no?
(Ms Lomax) I do not know what the question was.
Chairman
180. We will have to leave it there.
(Ms Lomax) I would like to clarify at the end the confusion I caused over Figure 21.