Government PPE Contracts

Nick Smith Excerpts

Tuesday 6th December 2022 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

I rise to support the motion on PPE, which has become a terrible tail of waste for our country. First, having purchased so much PPE, the taxpayer is now paying to store and, as I have discovered, burn a great deal of it. Secondly, a band of profiteers, some of whom took advantage of their political links, exploited our country’s desperation. Many of those opportunists used chicanery and secrecy to make eye-watering profits. Now, the UK Department of Health and Social Care is withholding information on the cost of staffing its contractual battles with some of those PPE suppliers.

I will address the continuing cost of PPE storage. A Government response to questions I asked last month said that the Department currently holds 13.2 billion items of PPE and the cost of storing that is a staggering £770,000 a day. I was going to go on to some other data, but we just heard an update on that that still works out at, I think, about £128 million a year if we round it up over the year ahead, which is half the cost of a brand-spanking new hospital. That is a disgrace.

We have heard about the modern-day pirates whose business accounts have been almost impossible to trace and track. Thanks to The Sunday Times, we know about a network of companies with connections to Conservative lobbyists, one of which is Sante Global, formerly Unispace Health. Private Eye deserves a medal for digging deeper: its “Profits of Doom” special highlighted how Unispace Global won PPE contracts worth nearly £700 million—Richard Brooks is a fantastic journalist. Reports suggest that it has accounted for its profits through different companies from those known to the Department, so it is impossible to see how much money it has made.

That information is shrouded in secrecy due to our feeble accountancy laws, but the taxpayer deserves to know who is profiting from contracts awarded by the Government with public money for the public benefit. It is high time that this PPE treasure hunt came to an end. We need full, open accounting for covid-19 contracts. These companies should be made to publish full details of their income, profits, commissions, dividends and big boss bonuses. The Chancellor should then consider a windfall tax on their super-profits.

The Government could also learn a lesson in transparency. In my experience, in recent months they have been trying to dodge questions on the continuing cost of PPE. Last month, I asked the Secretary of State for Health how much unused PPE had been donated, sold, recycled and incinerated since the start of the pandemic—no answer yet. I also asked when he planned to publish the forecast of the cost of resolving the ongoing contractual disputes we have heard a lot about today—again, no answer yet.

There are disputed contracts worth £2.6 billion with 176 companies. That amount could buy us seven new hospitals. It is important that the Government pursue this money, so all power to their elbow. However, I think transparency on their processes could help this cause, because the more we all understand, the better we can hold the bad actors to account. We should support the motion as long as the long tail of covid costs continues. The covid contracts need to be cleared up, and the Department of Health must come clean.

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[The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)]

To make sure that I get to them, I want to respond to some of the important points made by Back-Bench Members at the start of my remarks. The hon. Member for Kingston upon Hull East (Karl Turner), who is sadly no longer in his place, mentioned Arco not getting a contract. My understanding is that it did get a contract, so we should resolve what is correct.

The hon. Member for Argyll and Bute (Brendan O’Hara) mentioned the two different contracts for PPE Medpro, and it is important to be clear that one of those contracts was delivered—the PPE was delivered and that was fine—and one did not, and that is the one we are taking enforcement action on. With all these contracts, we are just as keen as everybody else to make sure that we get good value for money for taxpayers and we enforce whenever things have not been delivered.

The hon. Member for Blaenau Gwent (Nick Smith) called for the publication of details of companies that were in the high-priority group and then got contracts, which is something that happened in November 2021. I slightly disagree with one point that the hon. Member for Bradford West (Naz Shah) made: the argument that we should not have had any contracts with firms that had not previously been PPE suppliers. Of course lots of new firms were coming into the market, and part of our drive to get more UK supply relied on that very point.

[Nick Smith]

rose—

[Neil O’Brien]

I am just going to complete my tour of people’s contributions.

The hon. Member for Brent Central (Dawn Butler) said that we should donate and reuse PPE, and I am pleased to tell her that that is precisely what we are doing. The hon. Member for Edinburgh West (Christine Jardine) said that we are in the middle of a major cost of living issue, and she is absolutely correct. That is why we are spending £55 billion on energy support, why we have the £900 payment for 8 million poorer households and why we are raising the national living wage to a record level—that is worth about £1,600 for a full-time worker.

The hon. Members for Blackburn (Kate Hollern) and for Llanelli (Dame Nia Griffith)—

--- Later in debate ---

[Neil O’Brien]

There are so many questions that I do not know who to give way to, but I think I should start with the hon. Member for Blaenau Gwent.

[Nick Smith]

I thank the Minister for giving way. He attributed comments to me that I did not make, and I just want to put that on the record. I do have a question for him: does he accept that excessive profits have been made on the back of some of these PPE contracts?

[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.]