Capita

Lord McLoughlin Excerpts

Thursday 1st February 2018 Commons Chamber

[Oliver Dowden]

I thank the hon. Lady for her questions. I know she takes a close interest in this important issue. She has raised a large number of questions, and I shall seek to address as many of them as I can. I am pleased that she has acknowledged that Capita is facing up to its problems. Indeed, that creates a contrast with Carillion. She talked about the financial situation of Carillion versus Capita. The chief executive of Capita has faced up to this and strengthened its balance sheet—it has been widely reported that Capita has more than £1 billion on its balance sheet—which shows that the situation is significantly different from that at Carillion and gives us confidence in its ability to continue to deliver services.

The hon. Lady talked about dividends. Again, as a result of this announcement, Capita will not be issuing dividends, which means that money can go back into the pension scheme, allowing £200 million extra to be spent on the company’s core services, rather than dividends. That is evidence that the chief executive has understood the position and is creating a different situation from that which pertained to Carillion. She raised an important point about the major accountancy firms, such as KPMG, involved in this market. The Financial Reporting Council is looking into this matter. We expect to hear from it in about six months, and we will, of course, respond as appropriate. On her question about a Crown representative, I can assure her that there is one in Capita.

I explained in my original answer the role of the Cabinet Office and the Government and the reason that we contract with private companies. The previous Labour Government and other Governments did the same. As has been reported many times, a third of Carillion’s live contracts were agreed by the last Labour Government, a third by the coalition and a third by the current Government. Governments do this to deliver public services. Our role, as a Government, is to ensure the continued delivery of those public services, and the test for me and my colleagues and officials in the Department is this: is the company capable of delivering those public services, and if there is a problem with the company, will those public services continue to be delivered? In respect of Carillion, Members will have seen that all those public services have continued to be delivered, and I am confident that they will continue to be delivered.

[Sir Patrick McLoughlin (Derbyshire Dales) (Con)]

Will my hon. Friend look at the total contempt that the Labour party has for the private sector today? Will he take the time to publish, in due course, a full list of all the contracts with the private sector that were entered into between 1997 and 2010? That will provide a fine example of how the Labour party of today is nothing like the Labour party of that period when they were in government.

[Oliver Dowden]

My right hon. Friend makes an important point. This Government, and the previous Government, have engaged with private sector companies for the delivery of public services. Gordon Brown, Labour’s last successful Prime Minister—[Interruption.] Well, he was the last Labour Member to hold the office. May I take the opportunity to correct the record on that, Mr Speaker? Gordon Brown said:

“It simply would not have been possible to build or refurbish such a number of schools and hospitals without using the PFI model.”—[Official Report, 14 November 2007; Vol. 467, c. 665.]

Why is it that we use these contractors? Because we know that they can deliver. Labour’s position is slightly confused. Is it honestly now Labour’s position that we should not use the private sector at all? Is the state going to start building roads again? Where does Labour draw the line? It is complete confusion.