Written statement by , Chancellor of the Duchy
of Lancaster and Minister for the Cabinet
Office
During the course of the coronavirus outbreak, the Government’s
strategy to increase ventilator capacity has focused on procuring
more devices from existing manufacturers overseas, scaling up
production of existing ventilator suppliers, and working with
industry to design and manufacture new devices.
The Ventilator Challenge was launched in March. At present, two
devices from the Ventilator Challenge are ready for use in
hospitals, with the Penlon ESO2 device becoming the first
newly-adapted device to receive approval for use during the
pandemic from the regulator, the Medicines and Healthcare
products Regulatory Agency (MHRA). A number of other devices are
currently undergoing tests for regulatory approval.
Given the unprecedented circumstances of the pandemic, Cabinet
Office has given indemnities both against IP infringement, in
respect of the designs, and against product liability claims
against the manufacturers of Rapidly Manufactured Ventilator
System (RMVS) products.
It is normal practice, when a government department proposes to
undertake a contingent liability in excess of £300,000 for which
there is no specific statutory authority, for the Department
concerned to present to Parliament a Minute giving particulars of
the liability created and explaining the circumstances; and to
refrain from incurring the liability until fourteen parliamentary
sitting days after the issue of the Minute, except in cases of
special urgency.
Unfortunately, due to the urgent need to finalise the deal and
the confidential commercial nature of the negotiations, it was
not possible to notify Parliament of the particulars of the
liability and allow the required 14 days’ notice prior to the
liabilities going live. A delay would have resulted in an
unacceptable delay in lifesaving equipment being provided to the
NHS.
The precise commercial terms which have been negotiated for each
supplier are, and will remain, commercially confidential. While
it is difficult to estimate the potential liability exposure, it
could exceed £300,000. For this reason, I am informing Parliament
of these arrangements.
On this basis, I have today laid before Parliament a Departmental
Minute setting out what these indemnities are.
The Treasury approved these liabilities before they were
activated. However, if any Member of Parliament has concerns,
he/she may write to me and I will be happy to examine their
concerns and provide a response.
