Government PPE Contracts

Baroness Laing of Elderslie Excerpts

Tuesday 6th December 2022 Commons Chamber

[Will Quince]

I have given way once before—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. The hon. Lady should not be on her feet when the Minister is answering an intervention from another Member. She is simply getting in the way of the dialogue, and that is not the polite way to do it. If her intervention is to be taken, it will be taken in due course. Standing up for a long time while there is another dialogue going on is really not very polite.

[Will Quince]

Thank you, Madam Deputy Speaker.

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[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.

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[Dawn Butler]

My hon. Friend makes an extremely valid point. I spoke in Committee this morning. I am not going to read the book but I think we have to scrutinise it and cross-check the information that the Minister gave in Committee against what is in the book. The new Ministers who have come into post should be a little more humble, because what has happened is shocking. The cronyism and the corruption that has happened in the Government in plain sight is truly shocking. The Government are now spending £10 million burning PPE. It is like they are burning the evidence—we wonder why. [Interruption.] Sorry, the Minister said that I have just criticised the Minister for storing PPE. He is right. I would not want the Minister to spend nearly £1 million every day storing PPE. I also do not want him to burn PPE. He should be using the PPE—give it to people who are travelling on the tube. We are having a flu epidemic and it will help to resolve that, so don’t heckle me when this is your responsibility—[Interruption.] I mean the Minister. Sorry, Madam Deputy Speaker. The Government are incompetent as well as corrupt and it is not just cronyism. The situation is so ridiculous—[Interruption.] Am I not allowed to call it what it is, Madam Deputy Speaker? It smells like corruption to me.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. It is perfectly in order for the hon. Lady to say “incompetent”, but I would be grateful if she would find another form of words, rather than saying “corrupt”.

[Dawn Butler]

This is so ridiculous, Madam Deputy Speaker. When the Netflix series comes out, nobody is going to believe it is a true story. I know we are not supposed to speak about the Conservative peer too much, but we learn today that they are taking leave of absence from the Lords. I am not saying this in jest, but I hope she is not on her yacht trying to do a runner because a lot of money has gone missing. In a previous Minister’s own words, he was being “bullied” into giving this contract—[Interruption.] No, I don’t feel sorry for him, but he was being bullied. Two Ministers were being bullied, so it is important that we investigate the VIP lane.

As I said earlier, the National Audit Office said that companies were put there by mistake and were still given millions of pounds. Surely that shows us that due diligence was not done; the company was there by mistake. How did it get all that money? When the Minister gets to his feet, could he tell the House how many of these companies existed before the pandemic? If he cannot, of course, we look forward to that information being available in the Library or when this motion passes today, which I hope it does.

For the avoidance of any doubt, we all know that the VIP lane was a bit dodgy—that is just a fact and on record—but this has all come to light not because Parliament managed to force the Government to reveal everything that happened, but because a bank reported unusual activity and dropped a certain person and her husband in fear of reputational damage. That is what has brought this particular scandal to light and the National Crime Agency has now investigated.

As others have said, this is just the tip of a very large iceberg. The Serious Fraud office is also investigating contracts won by another company, Pharmaceuticals Direct Ltd, which paid a whopping £20 million fee to a middleman, Surbjit Shergill, who worked for Samir Jassal. Together, they had a hotline to the then Prime Minister’s special adviser, Munira Mirza. We also know—we have seen the emails—that they were helped by the right hon. Members for West Suffolk (Matt Hancock) and for Witham (Priti Patel).

If a company has to go through due diligence and believes that it is participating in a proper process, why would it agree to pay a politically connected middleman £20 million? That does not make any sense. If everybody is treated the same, there would be no need to pay somebody £20 million to move up the list. As you said, Madam Deputy Speaker, I cannot say the word “corruption” —I am trying to think of other words; hopefully more will come to me and I will use them—but it feels very much like cash for covid contracts. What happened to that money is a mystery. The Serious Fraud Office continues to investigate the case 18 months after it was referred.

I could speak about so many more cases. For those who are interested, there is a thread on my Twitter account about some of the other companies where there are huge questions to be answered. The Government need to open up their books and ensure that there is proper scrutiny. Yes, of course we accept that mistakes were made and that some of them were unavoidable, but the Department of Health and Social Care did not do the fraud checks that it was supposed to do; we had to push it, and that did not come out until a whole year later. There has been negligence, but there has also been something a little more sinister happening in Government.

Those people who stole money from the public purse during a national crisis should be ashamed. They should not say, “I was doing it for the country” as they are not when they are pocketing millions of pounds. It is not patriotic; it is a word that you are not happy with me using, Madam Deputy Speaker. Those people took the money unlawfully, really—they were helped by Government Ministers—and they will have had plenty of interest payments from their ill-gotten gains. Now is the time, during the cost of living crisis, to give that money back. That includes the donations given to the Tory party by those people who had a bung from the covid crisis—they need to come back into the public purse.

[Madam Deputy Speaker]

Order. I will have to put on a time limit of four minutes.

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[Dame Nia Griffith (Llanelli) (Lab)]

My hon. Friends have set out very clearly the shocking scandal of the PPE contracts. They have also mentioned people who were working hard on the frontline, putting themselves in danger to help others; and, of course, all those who lost loved ones. I will concentrate on the damage that the VIP lanes have done to loyal, reputable companies—the backbone of British business—who offered to be generous and go the extra mile to help, rather than looking for chances to rip the taxpayer off.

BCB International, a company that operates in my constituency and in Cardiff, is a long-established manufacturer and supplier of life-saving equipment, including medical equipment. Its primary customers in the UK are the Ministry of Defence, the Ministry of Justice and many police forces, and it exports approximately 40% of its turnover. It makes, for instance, very good fuel for camping gas stoves called FireDragon. It was registered, it was known to the MOD and the MOJ, it had a good reputation, and it was ready to go. In March 2020, it was engaged in the production of its high-quality hand sanitiser, Dr Browne’s, in Llanelli. It employed up to 100 staff, and worked 24/7. The 80% alcohol sanitiser passed all the appropriate tests, and was well liked and used by the NHS in Wales, as well as by a number of police forces and other public bodies.

Owing to the PPE shortages, the UK Government made a commitment early in the pandemic to “back British business”, and their “UK Make” programme, headed by Lord Deighton, was tasked to unleash the potential of UK industry to scale up domestic PPE manufacturing. In May 2020, Lord Deighton said:

“As countries around the world face unprecedented demand for PPE, British industry is stepping forward to make sure vital pieces of equipment reach our workers on the frontline.

My role is to increase our homegrown PPE supplies, both now and in the future, by investing in the potential of UK manufacturing.”

However, I understand that the “UK Make” policy was withdrawn in September 2020.

In May 2020, following the Government initiatives, BCB invested £700,000 in new hand sanitiser production equipment. It also bought in high-quality FFP3 face masks from Europe, set up gown production, and made oxygen bottle bags. It supplied all those, successfully and on time, to the Welsh NHS, to Welsh and English police forces and to the MOD.

From March 2020, the company regularly tried to sell its British PPE products to the Department of Health and Social Care, and it has provided a brief overview of just some of the names that it was in contact with. I do not have time to read them out now, but the company tells me that although it made these contacts and sent many other emails, it was never contacted back. That is an utter disgrace, and today we have seen why that was the case. There was no need for it to be the case. Good, loyal companies that did everything they possibly could and turned their workforces to working for the country were completely ignored.

As has been mentioned, it was not like that in Wales, and companies have spoken very highly of the Welsh procurement procedure. It is no wonder that the Auditor General for Wales has said:

“In contrast the position described by the NAO in England, we saw no evidence of a priority being given to potential suppliers depending on who referred them.”

Those are extremely strong words, from an auditor referring to what was happening in England. The Welsh Government put in place good arrangements overall. That is such a contrast, and this is what is so damaging to all the good businesses in this country who want to play by the rules.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

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[Neil O’Brien]

I will give way, but I am trying to respond to everyone’s points first. If Members can hold on, we will get there.

As I was saying, those two Members both made the point that we wanted to get more UK producers making PPE. The Minister of State, Department of Health and Social Care, my hon. Friend the Member for Colchester (Will Quince), has already made the point that we have gone from 1% of FFP3 masks being made in the UK to 75%. I should also mention our work with Moderna to get more development and production of vaccines happening in the UK as part of that exciting deal.

The hon. Member for Glenrothes (Peter Grant) said that one potential supplier had been incandescent with rage because they did not get a contract. That is the system working. People were being turned down for contracts; 90% of those who went through the—[Laughter.] Madam Deputy Speaker, I am desperately trying to respond to all the points. [Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Give the Minister a chance to respond to all the questions. I have tried to give enough time for that, so let him get on with it.

[Neil O’Brien]

Thank you, Madam Deputy Speaker. I am keen to reply to them. The hon. Gentleman said that only 3%—

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[Neil O’Brien]

I am about to explain the due process that we went through and the incredibly forensic work that our civil servants did. Just to be clear—again, for the benefit of the House—Ministers did not make decisions on contracts. Officials, as usual, made the decisions on contracts. I will talk more about the process that we went through in the very short time that we have remaining.

During the dark days of the pandemic, we had a collective approach that saw hundreds of millions of life-saving vaccine doses delivered, the largest testing infrastructure in Europe established from a standing start and the distribution of tens of millions of items of PPE. It was a uniquely complex challenge even in normal times, but a particular challenge when the entire world was trying to get these goods. [Interruption.] Opposition Members might want to have the courtesy to listen to the answers of the questions that they have asked—a strange approach.

We delivered 20 billion items to the frontline and to our broader workforce—we are still in fact delivering 5 million items a months. That was enough to deliver a response to a worst-case scenario, which, fortunately, did not emerge. That is why we have that 20% excess stock that I mentioned earlier. It is simply not the case, as one hon. Member mentioned, that we had five times too much PPE. However, let us remember the context. It was the former Leader of the Opposition, the right hon. Member for Islington North (Jeremy Corbyn), who said that it was a “matter of safety” and of patients’ safety. We agreed, which is why we acted. It was the shadow Health Secretary who said:

“Our NHS and social care staff deserve the very best protective clothing…and they urgently need…it.”

We agreed. It was the current shadow Chancellor who called for a

“national effort which leaves no stone unturned”.

That is exactly what we did. [Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Stop shouting!

[Neil O’Brien]

What did the hon. Member for Brent Central say there? [Interruption.] No, she does not want to repeat it.

Let me be clear, Madam Deputy Speaker: at every point in the procurement process, the process is rightly run by our brilliant commercial professionals. Ministers are not involved in the procurement process; Ministers are not involved in the value of contracts. Ministers are not involved in the scope of contracts, and Ministers are not involved in the length of contracts. That is something echoed by the National Audit Office, whose report concluded that the Ministers had properly declared their interests and that there was

“no evidence of their involvement in procurement decisions or contract management”.

The role of Ministers was exactly what we would expect. Approaches from suppliers were passed on to civil servants for an independent assessment. Let us again look at the scale of the effort: 19,000 companies made offers, around 430 were processed through the high-priority group, and only 12% of those resulted in a contract for 51 firms. That group was primarily about managing the many, many requests that were coming in to Ministers from people across the House and from people across the country who were desperate to help with that national challenge of getting more PPE, and there had to be a way of dealing with them. To be clear, due diligence was carried out on every single company, financial accountability sat with a senior civil servant, all procurement decisions were taken by civil servants, and a team of more than 400 civil servants processed referrals and undertook due diligence checks. It was a huge operation run by the civil service, and I thank them for their work in getting our NHS the PPE that it needed.

Let me be clear, I will not stand here and say that there are not any lessons to be learned; of course there are. But we should be clear about what those lessons are. Despite the global race to get PPE, only 3% of the materials sourced were fit for purpose, but we have built more resilient supply chains. We are implementing the recommendations of the Boardman review of pandemic procurement in full. I have mentioned the growth of UK procurement of face masks and of vaccines.

In closing, I wish to thank all of those who have been involved in this important conversation. We should be rightly proud of what was achieved during those dark and difficult days at the start of the pandemic, operating in conditions of considerable uncertainty. We were in a situation where, literally, there was gazumping going on. If people did not turn up with the cash, things were removed that they had bought from the warehouses. That was the global race that we were in to source these things. The 400-strong team of civil servants who led this process did a remarkable job from a standing start of sourcing the goods that we needed.

During this debate, we have heard a number of deliberate obfuscations of the different things that Ministers and officials do. To be clear, all of these decisions went through an eight-stage forensic process that was run entirely by officials and it did not get anyone a contract to go into this high-priority group. It was simply about managing the sheer number of bids for contracts that were coming in to people across this House. At the time, although memories are very short and the barracking on this continued—

[Sir Alan Campbell (Tynemouth) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put and agreed to.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. It is inadvisable for people to shout other things if I am listening for the Ayes having it.

Resolved,

That this House –

(a) notes that the Department for Health and Social Care purchased more than £12 billion of Personal Protective Equipment (PPE) in 2020-21;

(b) regrets that the Government has now written £8.7 billion off the value of this £12 billion, including £4 billion that was spent on PPE which did not meet NHS standards and was unusable;

(c) is extremely concerned that the Government’s high priority lane for procurement during the pandemic appears to have resulted in contracts being awarded without due diligence and wasted taxpayer money;

(d) considers there should be examination of the process by which contracts were awarded through the high priority lane; and

(e) accordingly resolves that an Humble Address be presented to His Majesty, that he will be graciously pleased to give direction that all papers, advice and correspondence involving Ministers and Special Advisers, including submissions and electronic communications, relating to the Government contracts for garments for biological or chemical protection, awarded to PPE Medpro by the Department for Health and Social Care, references CF-0029900D0O000000rwimUAA1 and 547578, be provided to the Committee of Public Accounts.