Government PPE Contracts

Brendan O'Hara Excerpts

Tuesday 6th December 2022 Commons Chamber

[Brendan O’Hara (Argyll and Bute) (SNP)]

It is a pleasure to follow the Minister’s robust performance. He said at the end that the Government have learned many lessons. Lesson No. 1 appears to be, “Apologise for nothing.” He knows that no one I heard was criticising the civil servants. Everyone on the Opposition side of the House knows that the civil servants were working in impossible conditions—conditions created by this Government.

I can understand why the Minister has been told to come out swinging and apologise for nothing. Let us be honest: from the moment we first learnt of the existence of the VIP lane for the politically connected, it was inevitable that it would come to this, with Members of this House discussing the eye-watering sums of public money that was earmarked for procuring vital PPE during the pandemic but instead found its way into the hands of fly-by-night chancers who had little or no knowledge or experience of PPE procurement, but who—and this is probably the most charitable thing I can say about them—became fabulously wealthy while making an absolute pig’s ear of it while trying to learn on the job.

Long before the PPE Medpro scandal broke, many of us were already trying to work out how the brains behind this “get rich quick” scheme ever believed that a plan in which the Government would fast-track their cronies, their politically connected pals and now, it would appear, their parliamentary colleagues was ever going to end well. I suspect, as I said during the urgent question on 24 November, that the shocking allegations that have been levelled against PPE Medpro in both The Guardian and The Times—allegations that lead directly to a Member of the other House—may well be the tip of a very large iceberg.

I suspect the reason the Government have been so reluctant to release the papers containing the advice, the correspondence and all the communication between Ministers and special advisers relating to the awarding of that contract is that they do not want to create a precedent that would require them to open the Pandora’s box that is the VIP lane for PPE procurement. However, the Minister would do well to remember that there is another precedent here. The similarities between today’s motion and the motion of 17 November last year, when the Government were instructed to release the papers in relation to the Randox/Owen Paterson scandal, are striking. They will also recall how that scandal rumbled on for two and a half months into February, before the papers were finally made available. Similarly to last year’s debate, the same very simple questions go to the heart of today’s: do this Government have something to hide? Is there something this Government do not want us to see?

The Minister must be aware that the more the Government dodge scrutiny, so public suspicion will grow about this PPE procurement programme being little more than a get-rich-quick scheme for their politically connected pals. Given what we already know, who can blame the public for thinking that? Byline Times recently said that the covid contract winners with direct links to the Conservative party—donors and associates—have seen their collective financial position improve by in excess of £300 million. Was anyone really that surprised when Private Eye described how

“The DHSC’s London-controlled PPE ‘cell’ was dishing out contracts like confetti to opportunistic businessmen”?

[Dr Mullan]

What would the Scottish public think about the Scottish Government awarding PPE contracts, without competition, to more than 20 brand-new suppliers that were unknown to the Government?

[Brendan O’Hara]

I hate to say it, but my goodness you are predictable, Sir. That was probably the most predictable question I could ever have imagined. I will come to that later in my speech. Compared with what went on in this place, the audit of the Scottish Government’s treatment of the procurement process is squeaky clean. I so look forward to having that conversation in about six minutes.

Many of those opportunists hit the jackpot in the Government’s VIP lane for PPE procurement. Prominent among them was PPE Medpro, whose bid to supply the UK Government with face masks and surgical gowns was in the high-priority lane after, we are told, some particularly enthusiastic lobbying was carried out on its behalf by someone down the corridor. Indeed, the peer in question was so enthusiastic about the abilities of PPE Medpro to deliver that she made her passionate pitch to Ministers before the company was even incorporated. Through remarkable powers of persuasion, she persuaded Ministers to propel that embryonic company—one with no experience in delivering medical or protective equipment, and one with which, she told them, she had no personal involvement and from which she did not stand to gain financially—straight into the VIP lane.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I remind the hon. Gentleman that he is in danger of straying. I have let it go so far, but I remind him, as I remind the House, of what the Deputy Speaker said at the beginning of the debate. The normal rule—that reflections must not be cast upon Members of either House of Parliament, except on a substantive motion, which this is not—remains in force. I know that the hon. Gentleman will be careful in what he says.

[Brendan O’Hara]

Thank you, Madam Deputy Speaker. I will attempt to stay on the right side of that line, and I am sure that you will instruct me should I stray again.

On 25 June 2020, just 44 days after PPE Medpro had been legally incorporated, the firm was handed its first UK Government contract, worth almost £81 million, for the supply of face masks. Very shortly thereafter, it was awarded a second contract, worth in excess of £120 million, to provide 25 million surgical gowns. Earlier this year, The Guardian reported that it had seen the contract that was signed between PPE Medpro and the gown manufacturer in China. The price that PPE Medpro paid for the gowns was just £46 million, and even adding a bit for shipping, logistics and storage leaves, by any reasonable calculation, a whopping profit of around £70 million of public money from a contract worth £120 million.

To add insult to injury, when the cargo of gowns finally arrived, a quick technical inspection from the national health service deemed them not fit for purpose and they were never used. I understand that the situation is so serious that the company is currently under investigation by the National Crime Agency, but inexplicably, up until a couple of hours ago, the peer involved was still operating under the Conservative party Whip. As the right hon. Member for Ashton-under-Lyne (Angela Rayner) said, this stinks. We know it stinks and the public—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I am quite sure that the hon. Gentleman intends to talk just about the process and the goods and so on, and that he will not be mentioning any peer in particular. He said “the peer involved”, so he referenced not just peers in general, but a particular peer. I am sure that he does not want to make reference to any particular peer, but will just talk about the process.

[Brendan O’Hara]

I shall from now on, Madam Deputy Speaker; thank you.

This whole process stinks, and we all know it does. That is why we have to see what this Government know. They deliberately created the conditions in which such behaviour could flourish, and they have to release what they know.

[Peter Grant (Glenrothes) (SNP)]

May I take my hon. Friend back to his comments earlier about due diligence? We all heard the Minister a few minutes ago claiming that due diligence was carried out in every single case. Is it possible for even the top civil servants in the United Kingdom to do any sort of due diligence on a company that did not exist two or three weeks before?

[Brendan O’Hara]

That is an excellent question, and perhaps it is a question that, had my hon. Friend managed to intervene on him, the Minister would have been far better placed than I to answer. I find it remarkable that due diligence can be carried out on a company that did not exist.

The Government know that the release of the PPE Medpro papers will not make this magically disappear, and they are right to fear that, in releasing those files, they are likely to blow the lid off this Pandora’s box and reveal that their VIP lane for politically connected pals was simply a green light for unfettered crony capitalism, rampant profiteering and widespread abuse of public funds.

In his answer to the question on 24 November, the Under-Secretary of State for Health and Social Care, the hon. Member for Harborough (Neil O’Brien), told this House:

“There was a global scramble for PPE…It was an extraordinary situation in which we had to act in a different way.”—[Official Report, 24 November 2022; Vol. 723, c. 441.]

It is a defence that the Minister today, the hon. Member for Colchester (Will Quince), also tried to hide behind a moment ago. It may be true that things had to be done slightly differently, but what is undeniable is that the UK Government made an active choice to act in the way that they did. It was a political choice to make this an all-in, free market jamboree. They did not need to do so. [Interruption.]

In response to the chuntering from the hon. Member for Crewe and Nantwich (Dr Mullan), the Scottish Government acted in an entirely different way. Many items of PPE for Scotland had to be sourced from overseas, but the big difference and—[Interruption.] If the hon. Member will stop talking and listen, I will explain. The big difference was that our Government sent staff from Scottish Enterprise over to China to source the items we needed and to ensure they were made to an acceptable standard and delivered at a cost we could afford. At the same time, the Scottish Government were increasingly working with Scottish manufacturers, so that by April 2021, 88% of our PPE was being produced in Scotland.

That Government involvement had a huge impact on the price. Unit costs show that disposable facemasks cost the NHS in Scotland 31p each, while the Department of Health and Social Care in England paid 40p. That is an increase of 29%.

[Peter Grant]

I can personally vouch for what my hon. Friend has said about the development of the manufacturing industry in Scotland, because there is an outstanding manufacturer in my constituency that did exactly that—its staff came in and worked unpaid over the weekend to reset its production lines to make what was needed, instead of the high-quality stuff it had been producing before. Does he think it is sad that I cannot name that company and sing its praises today, because I do not know whether it would thank me for connecting it, even tangentially, to the subject of this debate? Is it not sad that even outstanding Scottish firms are in danger of being tarred by the same brush that has been applied elsewhere?

[Brendan O’Hara]

My hon. Friend makes an excellent point. All the good that we could and should be talking about is being lost by this tarnished reputation. He could just as easily have pointed to the Scotch Whisky Association, which pivoted very quickly to turn its alcohol into millions of gallons of hand gel.

I go back to the point that the Scottish Government’s involvement was absolutely crucial in controlling the prices. As I said, disposable face masks were 29% cheaper because they were bought by the Scottish Government directly. The Scottish Government bought FFP3 face masks for £2.08 a unit. The Department of Health and Social Care bought them for £2.51—a fifth higher. Disposable gloves cost the Scottish NHS 9p each. In England, it was 33% higher at 12p. Even non-sterile gloves were bought 10% cheaper by the Scottish Government. One would have thought that a country with one twelfth the population of England would have a real job in pushing unit costs down below those of a country 12 times its size. It goes back to the fact that the approach the Scottish Government took meant they were in control of every part of the process, and they secured the deals they required.

[Dr Mullan]

The hon. Member is talking about the Scottish Government’s track record on procurement and value for money. Does he think that that applies across the piece? How well are they doing when it comes to ferry procurement in Scotland?

[Brendan O’Hara]

It is remarkable—we can always spot when a Tory is sinking beneath the waves when they start shouting “ferries” at us. Let us remember that this is a Government who awarded a ferry contract to a company with no boats.

[David Linden (Glasgow East) (SNP)]

Is my hon. Friend aware, as the hon. Member for Crewe and Nantwich (Dr Mullan) perhaps is not, that the Seaborne Freight ferries contract cost £13 million? Is it not the case that people in glass houses ought not to throw stones from Crewe?

[Brendan O’Hara]

One would have hoped that people in glass houses, having thrown the first stone, would have realised that it was not the best idea.

Let me put on record that the NHS in Scotland used emergency procurement provisions to award PPE contracts without competition during the first wave of covid-19 but, crucially, the auditors are completely satisfied with the procurement arrangements in place and said that there was

“No evidence of preferential treatment or bias”

in the awarding of contracts in Scotland. I believe that that is the significant reason why our overall costs of pandemic procurement were less than a third of the UK’s, and it perhaps explains why the Government are now paying £770,000 every single day to store PPE in China. The Minister will be aware that I have tabled a series of questions today to ask how much of that PPE is still usable, how much of it meets the standards required for the UK, what quality control methods were used in securing it and the proportion of PPE that did not meet the standard required.

[Will Quince]

rose—

[Brendan O’Hara]

I will give way if the Minister can tell us the exact proportion of PPE produced that did not meet the standard in the UK.

[Will Quince]

I will quickly update the House. As of October, we hold 13.1 billion items of PPE and we have disposed of 145,000 pallets of excess stock so far. The majority is stored in UK sites; about 120 million items are still stored in China. The total cost of storage is now below £400,000 a day, so significantly less than the hon. Gentleman says, and the total cost for storage in China is £35,000 a day.

[Brendan O’Hara]

I genuinely thank the Minister for that information and I look forward to reading it in Hansard so I can digest it. If I heard correctly, we are now on half a million pounds a day for storing PPE.

In conclusion, having to do things differently does not give anyone, whether they are a private individual, an elected politician or an unelected politician, a licence to rip up the rulebook and behave as if we live in an unregulated wild west of public procurement. That is why it is vital that these papers are released. The public have a right to know why, while doctors, nurses and other medical staff battled unvaccinated through the worst of the pandemic, and as the public stood and cheered them in grateful thanks, some people with connections to this Government saw only the opportunity to make themselves a quick buck. I predict that this PPE Medpro scandal is the tip of a very large iceberg—an iceberg that will eventually sink this ship of fools.