Select Committee on Standards and Privileges Seventh Report

Annex L

Letter to Mr Kevin Maxwell, Maxwell Communications plc,

from Mr Geoffrey Robinson MP

Further to my letter of 3 May, Michael Stoney spoke to me at your request. He put to me your concern to be fair to both sides on the Management Contract and your proposal therefore that it would be better to agree a fixed fee and a smaller share of profits. He mentioned a fixed fee of £150,000 to £200,000.

Frankly it would cost Lock at normal market rates the best part of £200,000 to employ the management services we are providing. To reiterate they are:

    Chief Executive

    Technical Director

    2 Senior Engineers: Software and Hardware

    Commercial Director for Lock Inc

These management services are backed up down the line. In addition we are now also making available an office and showroom at Birmingham which will be of considerable value to Lock for the market in the Midlands and to some extent the South (you will recall we closed the Southern office which was costing over £75,000 per annum). All of this is free from any cross charges so the £200,000 figure seems to me more than justified.

I would still like there to be a profit related element and would suggest 10% of Lock consolidated PBT in addition to the above fee.

There is a key exhibition—Interpak—next week at Dusseldorf. I shall be attending since the House is not sitting, together with our commercial Director. We have two immediate priorities:

i.  To relaunch the Metalchek 10—revamped by TransTec;

ii.  To recruit new distributors to replace the key ones in Europe who have defected to Safeline.

I'll keep you posted. Meanwhile I'll proceed on the basis of the above arrangement, if that's OK?

It's still a hard struggle at Lock!

26 May 1990

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 4 May 2001