Tackling Fraud and Preventing Government Waste

Alex Cunningham Excerpts

Tuesday 1st February 2022 Commons Chamber

[Ian Lavery (Wansbeck) (Lab)]

It is quite simple really: the Tories cannot be trusted with taxpayers’ money. Since we have been in the Chamber, headlines in the national news have described as jaw-dropping the revelations in the Department of Health and Social Care annual report. Buried on page 199 is a suggestion that there were £8.7 billion in losses on PPE in the Government accounts:

“£0.67 billion of PPE which cannot be used,”

perhaps because it is defective,

“£0.75 billion of PPE which is in excess of the amount”

that might need to be used,

“£2.6 billion of PPE which is not suitable for use within the health and social care sector”,

and,

“£4.7 billion of adjustment to the year-end valuation of PPE”.

[Alex Cunningham (Stockton North) (Lab)]

I remember the statement in the House, way back in 2010, when the Government cancelled the new hospital for my constituency. It was going to cost about half a billion pounds. Does my hon. Friend agree that we could have had our hospital, and many others too could have had their hospitals, if this sort of waste was identified properly in Government?

[Ian Lavery]

I fully agree. What could the Government have used £8.7 billion for? A new hospital in my hon. Friend’s constituency? Other hospitals and clinics? Looking after the 6 million people who are still on the NHS waiting list as we sit in this Chamber?

That loss is in addition to what has already been explained in previous speeches. I repeat: the Tories cannot be trusted with taxpayers’ money. Lord Agnew’s resignation has rightly renewed interest in the Government’s attitude towards fraud and the wider handling of public money. He spoke about “schoolboy errors” with regard to this Government—hardly schoolboy errors, by the way, when we are talking about billions and billions of pounds. Is it any wonder that Lord Agnew—a true blue, a loyal blue—stormed out of the Lords? He stormed away because he thought this Government were making schoolboy errors, and he wanted absolutely nothing at all to do with the Treasury decisions and the facts of wasted taxpayers’ finances and fraud.

The figures are staggering. It is estimated that £29 billion a year is lost across Government in fraud, and £4.3 billion of that, paid out in fraud and error under covid support schemes, has simply been wiped away. It has been deleted. Some £3.5 billion in covid contracts was awarded to Tory-linked firms, implicating senior Ministers of the Cabinet. Yet, other than the odd ritual sacrifice to give the impression that they care, the Government and those involved have shown no accountability for that shocking mishandling of public funds.

I can guarantee that, had the 2019 election result been different, things would have been completely different. The right-wing politicians and the press would not have so keenly turned a blind eye to what is happening before our eyes. Mark my words, if £4.3 billion was lost through benefit fraud, the Government would not be taking such a relaxed view on things.

People are 23 times more likely to be prosecuted for benefit fraud than tax fraud in the UK, despite the fact that tax crimes cost the economy nine times more. I could talk for hours about how the Government attack people on benefits and disabled people, how they hound people through the horrible methods used to track down people who are merely existing in life. Yet, if someone has a super-yacht, they can go anywhere and forget everything. That is the sorry state we see our nation in.

It is not an accident or a fault in the system; it is how the system has been carefully designed. The richest in our society have close ties to the Government; they ensure that their money can be shuffled around in offshore accounts and through tax loopholes, while the poorest are relentlessly hounded by a bureaucratic leviathan, which ensures that the system does not give them an inch. This disproportionate focus on working-class crime and the benefit scroungers narrative, peddled relentlessly in the press through tabloids and programmes such as “Benefits Street”, which we all saw on television, has warped public perceptions in a deliberate strategy of divide and rule by the handful of those benefiting handsomely from this fraud at the very highest level.

Lord Agnew’s revelations tell us nothing that we did not already know. Whether that was through the Panama papers, the Paradise papers or the Pandora papers, it is a well-documented fact that the super-wealthy hoard their money to avoid tax that might actually improve society for the many. Instead of tackling this issue, which could save billions of pounds in funds for things such as social care, the Government would rather raise national insurance and cut universal credit, throwing thousands more families into poverty, while inexplicable sums of money accumulate in the hands of the global élite.

Just a nice taster: the rising fortunes of the world’s billionaires during the pandemic fuelled record sales of super-yachts, to the tune of £5.3 billion—that is not bad, is it? Eight hundred and eighty-seven super-yachts were sold in 2021—a 75% increase on the previous year. It is all right for some, is it not? It is not for others, of course.

I urge the Government to finally commit to putting an end to the rampant levels of corruption at the highest level, rather than punish the people of this country yet again.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

Today, we have heard many extremely worrying examples of fraud, waste and corruption by this Tory Government, with the NHS getting the headlines. Sadly, that kind of behaviour is not limited to Westminster. In the Tees Valley, waste and dodgy deals are happening on a concerning and escalating scale under the leadership of the Conservative Tees Valley Combined Authority Mayor.

A few days ago, The Northern Echo and the Daily Mirror revealed that the majority of shares in Teesworks, the former steelworks site, have been handed to Tory donors. Until recently, half the shares were owned by the public, but at the end of last year, 90% were held by joint venture partners JC Musgrave Capital and Northern Land Management, with no procurement or open tendering process to oversee the site’s development.

A director of the same Northern Land Management has donated to the political funds of not only the Tees Valley Mayor but north-east Tory MPs. Joseph Christopher Musgrave, who gives his name to JC Musgrave Capital, has also donated to the Conservative party. The whole thing smacks of cronyism but, as today’s debate has shown, that is no surprise. Sadly, the Tory party and the Tory Government are becoming synonymous with the mismanagement of public money.

Teesworks has benefited from huge sums of public money since the steel producer SSI was closed in 2015 after the Tory Government let it go to the wall. That led to the redundancies of 2,300 steelworkers and the end of 170 years of steelmaking on Teesside—the industry on which the entire area was built. Taxpayers in both Teesside and across the country have paid tens of millions of pounds to purchase the site, keep it safe in the meantime and clean it up for regeneration.

What return will taxpayers have if the site ever returns a profit and what say will the public have over who comes there? Is the 10% share that the South Tees Development Corporation still has sufficient to ensure that taxpayers get value for money? To me, that seems very doubtful. We all want to see the successful development of the site, but if it is successful, 90% of the profits will go to the private companies that now control Teesworks.

There are also hugely valuable materials in the land at the site, including millions of pounds’ worth of sandstone, steel and copper. I am told that lorry loads of materials are leaving the site every day without proper audit—to where, who knows? I would also like to know who got those contracts and how they were won. Was there a tendering exercise or was it just the old pals act? Now that so much of the site is under private ownership, I wonder whether the public will reap the financial benefits of the assets when they are sold on, or whether instead the millions will line the pockets of the Mayor’s donors.

The site is fundamental to the economic future of Teesside. It has the potential to be a major site for new green industries such as carbon capture and storage and hydrogen. It can help us to rebuild a sustainable modern industrial future for Teesside, but who will be making the decisions on who invests there and what industries and businesses are allowed to set up shop? Surely such decisions are too important to our local economy to be left in the hands of property developers who will always put profits before anything else.

I am at a loss about where to turn to get answers for local people on these pressing issues. One of the most frustrating elements of the Tory Mayor’s apparent leadership of the combined authority is how difficult it is to access information about how public funds are being managed and spent because he acts behind a cloak of secrecy. Deals that involve such large amounts of public money should benefit from public scrutiny, but there is a complete lack of transparency in the Mayor’s dealings, which seems to me to be evidence of a contempt for his constituents, who have a right to know how their money is being spent.

It has become impossible to get information that in the past would have been routinely available to the public. The Mayor has created layers of organisations through which his dealings take place, some of which are not even subject to the Freedom of Information Act. Teeswork itself is a classic example: the Mayor set it up in summer 2020, promising that the body would oversee the regeneration of the SSI steel site. But it is not clear what Teeswork actually is. Is it a brand name? Is it a company? What is its constitution? How are decisions made? None of that can be found anywhere online. Its board was hand-picked by the Mayor—a mix of local Tory businessmen, local government officials, the independent leader of Redcar & Cleveland Borough Council and the Tory MP for Redcar. There are no published minutes or paperwork anywhere on the website.

It is appalling—this is simply no way to run a public administration. Taxpayers footed the bill for the site when it was purchased and it is only right that they should reap the benefits of what the site has to offer. As my hon. Friend the Member for Middlesbrough (Andy McDonald) said, there needs to be a full investigation into all of this.

I have seen the Mayor commenting that handing over such a large proportion of the site to private firms was apparently necessary to create jobs. To which I say: we lost 2,300 jobs when Conservative inaction shut down the steelmaking industry on Teesside after a proud 170-year history. Local shareholders lost out when the Conservative Government and Tees Valley Mayor stood by when the Sirius mine project needed support, instead leaving it to be taken over by a multinational company, which left local investors—some of whom had put their life savings into the project—high and dry. We lost jobs when the Tories failed to support the world-famous Cleveland Bridge Company, which built the Sydney bridge. It just had a cash-flow problem. Despite the Tories’ promises to save the company, it closed, with the loss of a large number of highly skilled jobs.

I understand that the Mayor has been in the news this week throwing his weight behind our disgraced Prime Minister. He shared his concern that, without the Prime Minister, levelling up will be dead. I am sure that, like all of us here, the Mayor is looking forward to reading the levelling-up White Paper tomorrow. I wonder if he will find it to be the rubbish that the Secretary of State apparently says it is. I wonder whether this is what the Mayor means by levelling up—giving more power to Tory donors at the expense of local people, who should be benefiting from investment and jobs. I wonder whether he thinks levelling up includes billions of pounds of taxpayers’ money being mishandled while a town such as Billingham, in my constituency, fights to get £20 million from the levelling up pot but keeps being rejected, even though it has a higher need than other areas that have been awarded cash.

That is what so-called Conservative levelling up looks like to me—more money for the Tories’ friends and crumbs left for the local community. The message is clear: the Conservatives, both nationally and locally, cannot be trusted to treat taxpayers’ money with respect and get them the value they deserve.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call Jessica Morden.