Covid-19: One Year Report

Baroness Bowles of Berkhamsted Excerpts

Thursday 25th March 2021 Lords Chamber

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I want to look at the money side because although the Government have spent massively on the pandemic, it could have been done better.

Economic support has been generous and it is welcome that furlough is now a permanent tool for the Treasury. But the good is marred by the Treasury’s deliberate refusal to extend other key programmes to many businesses hurt by Covid. Some 3.8 million freelancers and contractors—hairdressers, builders and workers in the creative industries—have been excluded from self-employment income support. A million sole traders who are directors of limited companies have been excluded quite deliberately because the Government do not like how they draw profits from their business. However, those traders are not the big tax cheats, and the Treasury has made a spiteful example of them despite repeatedly shunning possible remedy in the law on dividends.

Ministers claim that the excluded are not without help because they can get bounce-back loans, which might not be sensible financial advice. To get bounce-back loans deployed quickly, the Government suspended application of the Consumer Credit Act. All that was really needed was a variation relating to information and the affordability test but the Government ploughed ahead, removing all safeguards and advertising loans with government underwriting, although the underwriting is actually for the banks and not the individual.

Right from the start, concern about future heavy-handed tactics for repayment were raised. Ministers made assurances that they were in discussions with the banks and forbearance would very much apply but, as time goes on, we find that it is the Government who are the hawks, with banks now worried that they will be forced by the Treasury to take tough action, without promises of forbearance being adhered to.

When it comes to the vast sums spent on procurement, the back story is one of lack of value, low transparency and suspension of due diligence to the extent that it looks like suspension of common sense or, worse, deliberate turning of a blind eye. Some £18 billion of procurement was covered in the NAO’s November report, much of it for PPE, for which emergency procurement started two months after that of the EU, by which time global markets had tightened. That was always going to be difficult but it should not have led to the ditching of all accountability and corruption awareness.

A high-priority lane was given to leads referred by government officials, Ministers, MPs and noble Lords. Those leads were considered more credible and treated with more urgency than suppliers that came through normal channels. One in 10 of those in the high-priority lane got contracts and fewer than one in 100 through the ordinary channel. Why was that choice made when legitimate suppliers used the ordinary channel and, as we have heard, ended up being overlooked? Sources in the high-priority lane were not always documented, nor were key decisions, consideration of risks or how conflicts of interest had been identified and managed; nor were contracts published in a timely manner. Then there is what the Public Accounts Committee called the “unimaginable” £37 billion allocated to test and trace, although that was temporarily trumped by the leaked £100 billion plan for Operation Moonshot and its private business contacts.

The NAO said in December that test and trace should make better use of the expertise and knowledge of local authorities. Meanwhile, consultant numbers are still around 2,500, averaging £250,000 a year each and some clocking up nearly £7,000 a day. We must find out how money has really been spent, but the Government have been taken for a ride, paying too many consultants far too much for far too long. Perhaps they were friends too. I hope that, when it comes to a public inquiry, we find out who the profiteers are and who helped themselves ahead of helping their country.