Carillion

Baroness Laing of Elderslie Excerpts

Thursday 12th July 2018 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We will now have a time limit of five minutes.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Clearly the House wants the Minister to have time to respond to the matters that have been raised in the debate. Therefore, there will now be a time limit of three minutes.

[Kelvin Hopkins (Luton North) (Ind)]

I cannot possibly deliver my speech in three minutes, but I will do my best.

I am pleased to be able to speak in this significant debate on an issue that marks a turning point in Britain’s politics and economics. The collapse of Carillion should see the end of a huge policy mistake—the dogma-driven tragedy of the privatising, outsourcing and marketising of our public services. It is now time to accept that mistake, and to begin the process of rebuilding the public utilities and public services established in the early post-war decades that underpinned the enormous social advances achieved in those times.

The neoliberal economic model has brought political and economic instability, slower and erratic growth rates, and greater inequality—a world where the mega-wealthy and unconstrained private banking and corporate power have prospered at the expense of the rest of us. The death knell for neoliberalism was sounded by the 2008 crisis, when a catastrophic financial collapse was prevented only by spending billions of taxpayers’ cash to prop up the corrupt and out-of-control banking system. But the Frankenstein’s monster did not quite die then, and has limped along for another decade despite financial scandals and failures, with the public purse being ripped off time and again. The collapse of Carillion is one more nail in the coffin of the monster, but it is still not dead. It is time to ensure that it finally dies, and soon.

I am a member of the Select Committee on Public Administration and Constitutional Affairs, which is an excellent Committee with a first-class Chair and brilliant staff. As we have heard, the Committee has just produced its own report, which is very well written and contains much good material, but I was unable to support it because it did not draw the obvious conclusion that the drive to outsource and privatise—to hand vast sums of public money to grasping private companies through PFI schemes and outsourcing—has been an enormous and costly mistake, driven by ideology and not the public interest. We should have said in the report that PFI should be abandoned forthwith, and that the process of insourcing should be supported and accelerated.

The report says:

“PFI financing costs more than government financing because the state can borrow at a cheaper rate than the private sector. While we are confident that PFI costs more than conventional procurement, neither…the National Audit Office nor the Public Accounts Committee can find any evidence of the benefits the Government claims”.

This is pretty damning, but the report stops short of saying that PFI should be stopped now and for good and confined to the dustbin of history.

We have been here before—long before Carillion—with the collapse of Jarvis 14 years ago. At that time, I put a question to the then Prime Minister in the following terms:

“My right hon. Friend will be aware that the private finance initiative contractor, Jarvis, has been teetering on the brink of bankruptcy for weeks now. This is putting at risk a large number of school repair schemes and other public sector works. Would he not think it sensible, given that Jarvis’s share price has now collapsed to junk levels, to buy out all those public sector schemes, get them done in the public sector, and save billions of pounds of public money?”—[Official Report, 14 July 2004; Vol. 423, c. 1408.]

As hon. Members may have guessed, I received no sensible answer. Now, 14 years on, we have Carillion, and the present Government are still persisting with the failed models of privatisation, including the appalling PFI.

Some public authorities are beginning to insource, with significant financial and service benefits, but the drive to privatise continues, especially in the national health service. The failures of the model are legion, from prisons to probation, and from long-term care to smaller issues such as building control. But perhaps the greatest—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order.