A future Labour government would bring current NHS private finance initiatives (PFIs) back into the public sector, shadow chancellor John McDonnell has told the party’s annual conference.
In his keynote speech to the Labour conference in Brighton today, Mr McDonnell also repeated the party’s pledges to scrap the 1% pay cap for nurses and other public sector staff.
“We’ll bring existing PFI contracts back in-house”
He said that, while the party’s election manifesto had promised there would be no new PFIs if it was returned to power, it would now “go further” and bring existing PFI contracts “in house”.
However, he did not set out whether the controversial contracts – many of which were signed under the former Labour government during the 2000s, as well as the Conservatives – would be bought out or written off, both of which scenarios could have implications for the public purse.
Those involving the NHS have generally been to facilitate the building of new hospitals or for the provision of routine surgical procedures. They have been often criticised for being extremely expensive, inflexible and poor value for money.
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Mr McDonnell said: “[Labour leader] Jeremy Corbyn has made it clear that, under his leadership, never again will this waste of taxpayer money be used to subsidise the profits of shareholders, often based in offshore tax havens.
“The government could intervene immediately to ensure that companies in tax havens can’t own shares in PFI companies, and their profits aren’t hidden from HMRC,” he told delegates.
“We’ll put an end to this scandal and reduce the cost to the taxpayers. How? We have already pledged that there will be no new PFI deals signed by us,” said the shadow chancellor.
“But we will go further. I can tell you today, it’s what you’ve been calling for,” he said. “We’ll bring existing PFI contracts back in-house.”
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In addition, he also pledged better pay under a Labour government for both public sector staff and other workers, drawing attention to earlier comments made by the prime minister on nurses’ pay.
“In the election campaign, Theresa May was asked why nurses were being forced to resort to foodbanks and she replied that the issue was complex,” noted Mr McDonnell.
“It isn’t complex. It’s simple. They just aren’t being paid enough,” he told the conference.
“That’s why we insist the pay cap is scrapped once and for all and not just for some, but for everybody,” he said. “And we demand decent wages for all workers. Britain deserves a pay rise.
“It’s why we will introduce a real living wage of £10 an hour. We will introduce pay ratios at the top. We will address the gender pay gap that leaves women’s wages still trailing men’s by 14%,” he said.
“And we will ensure every piece of legislation will be measured against its impact on women before implementation,” he added.
Commenting on the speech, Unison general secretary Dave Prentis said: “It’s good news that Labour plans to tackle the beleaguered private finance initiative.
“Since PFI started, Unison warned it would lead to long-term debt problems, a burden the country couldn’t afford to carry,” he said.
“It’s like buying a house on a credit card,” he said. “Sky-high interest payments mean far less money for patients and children’s education.”