Carillion and Public Sector Outsourcing

Debate between Rupa Huq and Jon Trickett

Wednesday 24th January 2018 Commons Chamber

[Jon Trickett]

My hon. Friend makes a powerful and unanswerable point.

We want a categorical assurance that the jobs of the subcontractors and employees are protected and that the services will be sustained. Is it not clear that the Government played roulette with people’s livelihoods in the most reckless manner? The truth is that the Government have been so wedded to the dogmatic idea that the private is always good and the public is always bad that they never questioned the existing orthodoxy, even when the evidence was right in front of their nose.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

Will my hon. Friend give way?

[Jon Trickett]

I will give way, but I want to make some progress.

[Dr Huq]

I echo the words of my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell): it is a pleasure to see you back in your place, Mr Deputy Speaker. I wonder whether my hon. Friend the Member for Hemsworth (Jon Trickett) shared my horror today at pages 4 and 5 of the Daily Mirror, which report:

“‘Greed and lunacy’ as Carillion paid shareholders £500m while pension…hole spiralled out of control.”

Surely any company of this magnitude should meet its statutory obligations before paying out dividends to shareholders.

[Jon Trickett]

My hon. Friend is absolutely correct. In the 16 years up to 2016, the dividends paid to shareholders increased every single year, while the pension pot and the conditions of work and the pay that the workers received was diminishing. By the way, Mr Deputy Speaker, I met a subcontractor of Carillion the other day, who told me that the company had a policy of not paying anybody in December, because on 1 January the bank wanted to look and see how much liquidity was left. Is that not shocking?

Maybe the Government’s devotion to outsourcing is the real reason why they have failed so monumentally in relation to Carillion. They had a blind assumption—and still have—that contracting out works efficiently, and that the market always knows best, which we know is not the case. If they do not learn from the repeated failures of outsourcing, there will be another Carillion around the corner, and then another and another. One needs only to look at companies such as Interserve and Mitie, which deliver public services, to see how fragile some of these Government contractors are.

Budget Resolutions and Economic Situation

Debate between Rupa Huq and Jon Trickett

Monday 21st March 2016 Commons Chamber

[Jon Trickett]

Of course. The Tories are not interested in looking after ordinary people and small businesses. They are interested in directing money at the privileged few.

Let me turn briefly to the subject of devolution, which the Secretary of State mentioned. In his Budget statement the Chancellor announced a number of devolution deals, about which concern has been expressed in all parts of the House. The Minister cannot say we did not warn him that there would be trouble on that from the Labour Benches. The whole process is far too top-down. The insistence on a single mayoral model has caused much resentment, especially in cities where the idea was recently voted down by local people in referendums.

It is not councils’ fault that there are these tensions—our councillors are under enormous pressure to get whatever they can for local residents. The fault lies entirely with the process imposed, not by the Secretary of State, but by the Chancellor, who is stubbornly refusing to allow ordinary citizens to have a say in how their areas should be governed.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

The idea of devolution setting people free from centralised diktat may sound good on paper, but how does it square with the forced academisation of schools?

[Jon Trickett]

I agree entirely with my hon. Friend’s point.

Let me make some progress on devolution. The average pot of money available to the metro mayors appears to be about £30 million a year, but that is dwarfed by the severity of the cuts that each of their councils has suffered. Top-down devolution, compounded by financial injustice, simply will not work as an enduring solution. Labour wants properly funded, real devolution, which would include, for example, the power for every council to open schools, build homes and regulate buses—mayor or no mayor.

That brings me to the Budget’s implications for the north of England. The Chancellor boasts about his northern powerhouse, but his Budget cuts to northern councils alone since 2010 add up to £3.9 billion being taken out of the northern economy. What do we get instead? A few million pounds for a scaled-down flood defence scheme in Leeds, and a few million more to fund not an electrified rail link, but a study that might report eventually on whether there should be electrification. None of that cuts the mustard—it is more of a power scam than a powerhouse.

Let me express my great admiration for councillors of all parties who do their very best across the nation, despite years of cuts, to protect services. Libraries, for example, are one of the most prized assets in any community, but they are frequently the first to go. On Friday, I visited Wyke library in Bradford. The council has managed to keep it open, despite the prospect of losing half its budget in a decade. The library is a beacon of hope and self-improvement, buzzing with learning. I met people there who were studying to better their lot in life. They told me there was no way on earth they could afford to buy the books they could borrow from a public library or to use the internet, which was also available. The priority had to be putting food on the table for their kids, but they were able to come to the library and have access to knowledge. I met one man who was using the internet—publicly provided in a public library—to complete his PhD. Cutting libraries, cutting museums, cutting theatres—all of this is nothing short of cultural vandalism.

The Secretary of State did a round of media interviews this morning. On ITN, he told Conservative Members to come together again; he said they should stop scrapping with each other. Well, good luck with that. Then he went on the “Today” programme and talked about the rough and tumble of Budget negotiations, as if that explained the resignation of the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith).

I think the Secretary of State is a decent man, and I suspect that, in his heart of hearts, he appreciates the value of local government services. He knows the role—how could he not?—that many of them play in supporting the vulnerable, but what does he really know about the rough and tumble of Budget negotiations? He was the first Secretary of State to sign up on the Chancellor’s terms.

On the radio this morning, the Secretary of State referred to the right hon. Member for Chingford and Woodford Green as his very good friend. My guess is that he may not want to follow the path of his very good friend and resign from the Government to defend local councils. I hope, however, that he will decide to fight his corner rather more strongly than he has this year against a Chancellor who has proved his judgment is nil.