Jon Trickett
I will give way but, in doing so, let me ask her the following question. [Interruption.] This is a debate.
The Lord Commissioner of Her Majesty's Treasury (David Rutley)
Well, let her ask you a question.
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. I have the greatest respect for the hon. Member for Macclesfield (David Rutley), but we do not normally have a Whip joining in. I am sure he will not be joining in again later. The hon. Member for Hemsworth (Jon Trickett) is giving way. Let him give way, and I am sure we can get on with the debate.
What I am bothered about is that a lot of people want to speak, so please let us not waste time attacking each other.
Jon Trickett
I am trying to make some progress. [Interruption.] Well, they will be glad that I am making progress, then.
In the Minister’s role at the Ministry of Justice, what did he do? He awarded a £25 million Government contract to G4S. But that company was under investigation for fraud against the taxpayer. He snuck out plans to privatise the collection of court fines, and he even proposed giving private companies the power to arrest our fellow citizens. His Department bailed out a private probation service with an additional £277 million over seven years, and he failed to deliver the promised £115 million that he said would be delivered by outsourcing two prisons.
We need to change direction. Let me briefly set out the case, because outsourcing of procurement has boomed under this Tory Government. It is now worth £242 billion. Nearly a third of public expenditure—of our taxes—is being put at risk by a Government who are blindly following a dogma.
To be clear, there never was a true market in outsourcing. It is an oligopoly. The course of action that the British Government set out on has led only to the creation of a handful of mega-corporations, almost too big to fail, and those corporations have penetrated nearly every aspect of the state, both central and local. This so-called market works well for a handful of companies making huge profits out of the taxpayer, but it is not working for anybody else.
We want the Government to see the facts as they are, not through the lens of a tired, stale, outdated, dogmatic view of the world. Jeremy Corbyn, our leader, commenting on the Carillion debacle—
Jon Trickett
Well, we still pay tribute to our leader, unlike some of the Government Members, who seem to be making up a point about it. Let us see how many of them—[Interruption.] My party leader said that we have now reached—
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
Mr Deputy Speaker, I take comfort in the fact that I can at least join the hon. Member for Hemsworth (Jon Trickett) in expressing a wholehearted welcome to you, Sir, on your return to the Chair of the House.
I want to start by addressing the motion and to make it clear that, if the motion passes, the Government will of course comply with the will of the House. The Public Accounts Committee, as the House will know, already possesses powers to require the Government to supply it with papers. Whether or not the motion passes, it is my intention to share with the Public Accounts Committee as much information as I reasonably can that will help it with its inquiries. I hope, too, that in debating the motion hon. Members on both sides will understand that the information cited in the Humble Address is highly commercially sensitive.
I agree that the Public Accounts Committee is a vital mechanism by which Parliament can hold Government to account, but the Government also have an overriding obligation to ensure that information is not placed in the public domain when that would be either improper or give rise to particular risk. There are important considerations not only for Government but for the House to consider about the impact of releasing the documents.
First, we must bear in mind the impact on markets, whether good or ill, of making such documents public. Because the information requested is highly commercially sensitive, if made public it could have damaging impacts not only on market confidence, individual suppliers and the Government’s ability to manage our relationship with those suppliers effectively, but more widely on the jobs of people employed by those companies—constituents of Members on both sides of the House—the delivery of public services and, potentially, the broader economy. We also need to act in a way that is consistent with our legal obligations and mitigate any litigation risks to Government. If the motion is passed, I will undertake to discuss in short order with the Chair of the Public Accounts Committee the best way to make information available to her and her Committee, while ensuring that those genuine risks are minimised.
In his speech, the hon. Member for Hemsworth asked several questions about the Government’s contingency planning ahead of what turned out to be the collapse of Carillion a couple of weeks ago, and he also asked about the role of the Crown representative. To be clear, a new Crown representative was appointed in October last year and started work in November. He was appointed just after the regular quarterly list of named Crown representatives was published. The new list, which will include the name of the new representative, is due to be issued imminently, so the House will then be able to see the name of the new Crown representative to Carillion, along with all the others.
There was a longer-than-usual delay in the decision on the new nominee because, in the wake of Carillion’s first profit warning in July last year, my predecessors rightly took the decision that, rather than a Crown representative who was experienced in finance, they wanted somebody who was experienced in the restructuring of corporations: it was apparent that Carillion would need to undertake some considerable corporate restructuring and refinancing if it was to get its house in order, as it was then confident of doing.
Crown representatives are experienced board-level executives—they are not civil servants—who work on a part-time basis in the Cabinet Office to advise on commercial matters with suppliers and sectors. They help the Government to act as a single customer, but they do not advise suppliers on their finances or future business strategy. In the course of normal events, they do not have access to privileged information. Given the hon. Member for Hemsworth’s remarks, I should make it clear that Crown representatives are not politically appointed. They are contractors assigned to companies where they have knowledge of the sector and where there is no conflict with other concurrent roles that the individual man or woman may have. They have no authority to take procurement decisions.
Gareth Snell
Does the Minister agree that, even if it is within the letter of the law, the perception of people who have donated money to a political party subsequently getting a paid Government position looks bad and undermines the integrity of the work they are trying to do?
Mr Lidington
As I have already said to the House, these are not political appointments so there is no political intervention in them. It is quite right that donations to all political parties are made public. That is what the House has voted for and embodied in legislation, and it makes the situation clear to everybody.
Let me turn to Carillion’s liquidation. Along with all my fellow Ministers and, I believe, the whole House, I recognise that the collapse of Carillion has caused huge anxiety for the people who work for Carillion companies, the people in Carillion pension schemes, the suppliers and subcontractors and, of course, the people who use the public services provided by the company’s workers.
I reiterate the priorities that have animated the Government throughout the process. They have been: first, to make sure that public service delivery continued without interruption, which has been the case, as no public bodies have reported any major service disruptions; secondly, to reassure the workers employed on public service contracts that they will continue to get paid for their work; thirdly, to make sure that the right support is in place for pensioners; and fourthly, to protect taxpayers from an unacceptable bail-out of a public company, the risk of which is rightly borne by the shareholders and the banks that have lent to it.
The situation today is that the official receiver is now effectively running Carillion, and in the course of time his investigations will show exactly how the company ran into trouble. Although Carillion was under some financial pressure from three UK public sector construction projects—two hospitals and a road scheme in Scotland—it is already clear from the company’s statements to the stock market and from information that has become public since the liquidation that the problems it faced lay largely in its overseas construction projects and in the level of financial risk that it took on.
Within days of the first profit warning in July 2017, the Government retained legal and accountancy support and started an intense period of contingency planning. Preparing these plans involved considerable effort by officials from right across Government. The Department of Health and Social Care co-ordinated a similar exercise for NHS bodies, including trusts, and the Ministry of Housing, Communities and Local Government worked with local authorities that had exposure to Carillion. The key aim of all these contingency plans was to ensure that public services were kept running safely and smoothly in any possible scenario. The solution had to be specific to the contract in question, had to be affordable and had to be capable of being executed, if necessary, at short notice.
As a result of that planning, the work covered by the service contracts has continued with minimal disruption: the school meals have been served, the hospitals have been cleaned and the maintenance staff have continued to go about their work. With regard to the construction contracts, some infrastructure work, such as that on the Aberdeen bypass, now continues uninterrupted. Other construction sites where work has paused have been put into a safe state so that work can be resumed quickly. The official receiver is working hard to resume work on these sites at the earliest possible date. This work requires customers to find new project management firms that can oversee the completion of their projects.
John Spellar (Warley) (Lab)
I thank the Minister for giving way and for the information that he is providing to Members of Parliament. The Midland Metropolitan Hospital has a site management in place and a series of contractors. Given that those contractors are now locked out of the site, they will be going off to undertake other work, so increasing costs will have to be borne. There will also be disruption to the work from the delay on an already delayed hospital, which has nothing to do with the workforce.
Mr Lidington
The right hon. Gentleman makes a perfectly serious and reasonable point. It is crucial that we do all we can within our power to minimise the impact of delay on the public sector construction contracts, and to retain the knowledge held by the Carillion staff employed on those contracts who, in most cases, are undertaking a project management role, managing the work of a number of different subcontractors. In particular, the development of our future hospitals must continue. This is something that the Minister of State, Department of Health and Social Care, my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay), is working on day by day.
Mr Lidington
May I come to discussing the particular hospital that the right hon. Gentleman cited?
We are working with the official receiver to ensure that Carillion construction staff working on the Royal Liverpool Hospital, the Midland Metropolitan Hospital and the Southmead Hospital in Bristol continue to be paid. This allows for a more orderly timeframe for the discussions to take place between the private finance initiative contractor and the lenders to ensure that new contractors can replace Carillion and that the work can resume at the earliest possible date.
I say to the right hon. Gentleman that we know that we have a lot of work still to do. We have, for example, to find alternative suppliers both for those hospital contracts and for other contracts, but I regard the hospital contracts as a particular priority. The exact structure of those contracts and the extent to which they are nearing completion obviously varies depending on which hospital contract one looks at. The precise solution will differ from Liverpool to Bristol to the west midlands. I assure him that we regard getting on with that job as a very high priority indeed.
Liz Twist (Blaydon) (Lab)
The Minister is talking about health contracts. Some years ago, I was involved in negotiating one of those contracts with Carillion at South Tees Hospital. As I understand it, those contracts have now been transferred and sold to Serco by Carillion. Serco has seen its own profit warnings raised. What steps will he take to ensure that we do not find ourselves in a similar position in future? These are staff providing vital health services that are an integral part of the hospital, and it is really important that we take preventive steps.
Mr Lidington
It is the statutory responsibility of the official receiver to ensure that contracts previously held by Carillion are transferred as quickly and in as orderly a fashion as possible to alternative contractors. In respect of the public service contracts, the Government are ensuring that payments are made for the continued delivery of those services while that process continues. It would be irresponsible of a Minister to be drawn into speculating about the situation of any named company, but I just say that the company that the hon. Lady mentioned has not issued any profit warnings. I am sure that the official receiver will be going about his job in a responsible fashion.
There have been questions, not least from the hon. Member for Hemsworth, as to why we continued to award contracts to Carillion even after the first profit warning on 10 July last year. It is important to put it on the record again how Government procurement works. When Government advertise opportunities, bidders go through a formal process, which may involve negotiations, and then submit a bid. These bids are looked at on a basis of equality between competing bidders. They are scored formally for quality and price against a published set of evaluation criteria, and the contract is then awarded to the highest-scoring bid. It would be a major legal risk for the Government, having published criteria, then to seek to exclude any bidder from a contracting process on the basis of other, somewhat arbitrary, criteria.
Chris Stephens
I thank the Minister for explaining the process. Given the concerns raised by the shadow Minister, will he confirm that there is no testing of whether a company is engaging, or has engaged, in the practice of blacklisting?
Mr Lidington
The issue of blacklisting is itself a matter of debate internationally about how the various criteria for blacklists are being drawn up. We have a set of criteria that are published in respect of each and every bid that is submitted for a contract being let out to the private sector.
Several hon. Members rose—
Mr Lidington
Carillion announced that it had won eight public sector contracts after its first profits warning in July last year. Three of those, for facilities management for defence establishments, were awarded before the profit warning, but Carillion chose to make the announcement some weeks later. Two out of the remaining five were awarded by HS2 Ltd. Those contracts were awarded to a joint venture including Eiffage—a major French construction firm—and Keir, as well as Carillion. The three companies bid together as a consortium, and as a result all shared responsibility for completing the work. After the profit warning, we asked the board of each of the partners for written assurances that if one partner failed, the other partners had a contractual obligation to pick up the work. Those assurances were given. Since the announcement of Carillion’s liquidation, both Eiffage and Keir have confirmed that the contracts will continue uninterrupted, and the former Carillion employees working on the contracts have been offered jobs with one of those other partners.
Several hon. Members rose—
Mr Lidington
As a further assurance following the announcements of the profit warning, external due diligence was commissioned by HS2 Ltd. This revealed that at the time of award in July last year, Carillion did have the financial capacity to continue with its part of the contract. HS2 let the two contracts to the joint venture because it was confident that the joint venture arrangements were robust, as has proved to be the case.
Rachel Maclean (Redditch) (Con)
The Minister is outlining very coherently the rigorous process that has to be gone through to deliver quality public services on behalf of the taxpayer. Does he recall that it was a Conservative Government who introduced the Public Services (Social Value) Act 2012, which required Ministers to look at a wide range of factors and also to think about social, environmental and economic benefits for consumers and the taxpayer?
Mr Lidington
My hon. Friend is exactly right. The tests we routinely apply take account of quality, not just cost, in assessing bids. I am sure there will be lessons that we want to examine, particularly as we learn about what happened to Carillion from the official receiver. It is interesting, as my hon. Friend points out, that it was a Conservative-led Government who put in place arrangements that had not been so made during the 13 years of a Labour Administration.
Several hon. Members rose—
Mr Lidington
The remaining three announcements concerned contracts with Network Rail. These were not new awards or new contracts, but variations to contracts that had been let three years earlier—in 2014. Two were for electrification work and, in a similar construct to the HS2 work, were let to a joint venture between Carillion and an electrification specialist, SPL Powerlines. One contract variation, for civil work in connection with the London to Corby upgrade, was let directly to Carillion. That is the only public sector contract, post the July 2017 profits warning, that was neither a joint venture nor something already decided and awarded before the profits warning was issued. Network Rail judged in this case—
Mr Kevan Jones (North Durham) (Lab)
On a point of order, Madam Deputy Speaker. I am aware that it is up to the Minister whether he gives way, but would it not be courteous to the House if he actually indicated that he was not going to take any interventions, because he just seems to be reading his speech—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. That is not a point of order, and I am not going to spend any time on it because a lot of people want to speak. There is no more courteous a Minister in this place than this Minister.
Mr Lidington
I am grateful to you, Madam Deputy Speaker. I have given way a number of times already, and I want to make some progress. I certainly intend to give way again, but I am conscious that we have finite time available for the debate, and the time taken up by taking interventions is speaking time taken away from Back Benchers.
Network Rail judged in this case that Carillion was best placed to do the work, because it had been engaged on the project for three years already and had completed all the design work successfully. By agreement with the official receiver, former Carillion employees and suppliers continue to work on these rail projects, and today they are progressing as planned.
Since the liquidation on 15 January, the Government have responded promptly and appropriately, supporting the official receiver to manage the liquidation. We have also made funds available to allow an orderly wind-down of the company’s affairs. It is worth my explaining that this company was in such trouble that it could not even fund its own administration. If the Government had not stepped in and agreed to cover the costs of the official receiver, there would have been a real threat to public services in schools, hospitals and prisons. Staff would not have come to work last Monday, as they would not have been paid.
Nick Smith (Blaenau Gwent) (Lab)
I thank the Minister for giving way—at last. In his letter today, he refers to an investigation into the conduct of Carillion’s directors. Is the chair of Carillion, Philip Green, still an adviser to the Government on corporate responsibility?
Mr Lidington
No, and he ceased to be an adviser after the Prime Minister took office.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Minister mentioned that the Government are funding the cost of the liquidation. What is the Government’s estimate of that cost?
Mr Lidington
It is not possible to give an estimate because that will be a net figure that has to take into account both the willingness of joint venture partners to step forward and take over the projects in which they were involved—that seems to have been the case—and the speed at which the official receiver is able to find alternative contractors, or in-house contractors in certain cases, to take on the provision of particular public services. Our overall estimate can be only quite an uncertain estimate at this stage, but we are confident that it will in any case be very significantly less than if we had had to cope with the costs of an unplanned, unmanaged liquidation, had the Government not stepped forward and agreed to pay for the official receiver’s administrative and legal costs. Because of the funding we have provided, we have kept those public services running, and that has also provided a breathing space for private sector customers such as the Nationwide building society to continue receiving services while they decide how to react to the crisis.
Mr Jim Cunningham (Coventry South) (Lab)
The partners are going to take over the work, but who will fund it—the partners or the official receiver?
Mr Lidington
I am not sure whether the hon. Gentleman is referring to the partners involved in the special managers at PwC or to Carillion board members.
Mr Cunningham
I am referring to Carillion’s partners who were involved. They have an undertaking to take over the work, but who will pay the costs?
Mr Lidington
Administrative costs fell to the official receiver in the short term. With the HS2 contracts, for example, there was an obligation on the partners to step forward and meet the Carillion’s obligations at the cost that they, collectively as a consortium, had negotiated and agreed with the Government. That contract was with the consortium as an entity. I hope that answers the hon. Gentleman’s question.
Nationwide building society has since offered jobs to 250 Carillion employees and contracts to the subcontractors that employ a further 1,500 people. In total, more than 90% of Carillion’s private sector facilities management service customers have indicated that they will provide funding through the official receiver to maintain interim services while new suppliers can be identified to deliver them, ensuring the retention and employment of staff on those contracts.
Eleanor Smith (Wolverhampton South West) (Lab)
TUPE does not apply when a company goes insolvent, but given the way in which Carillion collapsed, should not the Government make an exception and allow TUPE to apply to private sector employees?
Mr Lidington
PwC, as the special managers working with the official receiver, is looking at such cases to see whether it can offer arrangements whereby workers are no worse off than they were under the terms of their Carillion employment. The hon. Lady and I met yesterday to talk about the constituency concerns that she and other parliamentary colleagues have about the Wolverhampton headquarters. The alternative of a chaotic, unmanaged collapse and liquidation of Carillion would have been far more difficult for the workers concerned, because the liquidator in those circumstances would have had a statutory obligation to terminate all contracts and lay off all workers straight away, not to continue with the provision of public services. That would have been more costly not only for the individuals involved but, obviously, for the public purse.
I welcome the initiative taken last week by the Construction Industry Training Board to help the 1,400 apprentices employed by Carillion. Those apprenticeships were primarily in bricklaying, carpentry and joinery—skills that the country vitally needs to build homes and solve our national housing shortage. To date, the CITB has matched 400 of those apprentices with new employers, and it continues to assess the large number of industry offers it has received to find placements for the remaining Carillion apprentices.
Unfortunately, there will be some redundancies as a result of this company failure. That is why Jobcentre Plus mobilised its rapid response service, and it stands ready to support any employee, at any stage, who is affected by this announcement. I am aware, too, that a significant number of small and medium-sized businesses—either suppliers to or subcontractors of Carillion—will be affected by this collapse because Carillion owed them money. We are doing what we can to keep continuity on service contracts for those companies, and as I said earlier, we are having some success, particularly on the facilities management side.
In addition, we are looking to restart work on construction sites at the earliest safe moment. My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, with the assistance of my the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton (Andrew Griffiths), who has responsibility for small business, has personally led efforts to do what we can to mitigate the risks to subcontractors and suppliers through a taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation on the sector through practical measures that will help SMEs and employees alike. My right hon. Friend has met the banks, and I join him in welcoming their undertakings to take special measures to help those affected, including overdraft extensions, payment holidays and fee waivers.
Sir Geoffrey Clifton-Brown
My right hon. Friend said in his letter to all colleagues that the Government was providing £1 billion-worth of funding to small and medium-sized enterprises, which is a useful start to keep some of them in business. Can he give any indication how that £1 billion is likely to be distributed?
Mr Lidington
The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton (Andrew Griffiths), may be able to say more when he responds to the debate, but that help will involve things such as credit facilities and loans to enable those companies to trade their way through this period of difficulty, particularly until there is greater certainty about what happens to the contracts on which they were engaged.
Kirsty Blackman (Aberdeen North) (SNP)
I understand that some subcontracts have not been automatically rescinded as result of the process that is under way, so organisations such as county councils and so on cannot provide a new contract. I would appreciate it if the Minister looked into that.
Mr Lidington
If the hon. Lady writes to me with details, I will ensure that she receives a response from the appropriate Department. When I spoke to the Insolvency Service and PwC yesterday evening, they were able to say that some companies in the Carillion group appeared to be solvent. Those companies will still be able to continue trading, and that may be the case with the contracts that were brought to her notice.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will the Minister explain the advice he would give to SMEs subcontracted by Carillion in cases where Carillion services have been brought in-house to a local authority and where invoices have been unpaid? Should they apply to the official receiver for payment?
Mr Lidington
The practical advice I would give is to go to the website operated by special managers on behalf of the official receiver. There are links for the various categories of people affected, so those SMEs should follow the one for suppliers or subcontractors for advice and frequently asked questions. If they have specific concerns there is an email link to make direct contact with the special managers. That is the best way forward, because every case is slightly different.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I hesitate to interrupt the Minister, but there has been some consternation about the taking of interventions. The Minister has been quite generous in doing so. Twenty people wish to speak in the debate. There is an hour and 31 and a half minutes left. Members will also wish to hear the winding-up speeches. Some people have been sitting patiently in the Chamber all afternoon. The prospective limit on speeches at the moment is three minutes, but it is likely to go down, and some people will not have an opportunity to speak at all, so let us allow the Minister to say what he has to say.
Mr Lidington
Thank you, Madam Deputy Speaker. I will try to make progress.
Her Majesty’s Revenue and Customs will provide practical advice and guidance to those affected through its Business Payment Support Service. That may include help such as agreeing instalment arrangements, suspending any debt collection proceedings and reducing payments on account.
I should say a brief word about the concerns of members of Carillion’s defined-benefit pension schemes who, understandably, are seriously worried at this time. Existing pensioners will continue to receive their pensions at agreed levels, but the significant funding deficit in Carillion funds will mean that some future pensioners will see their pensions reduced. At present, seven Carillon schemes, covering 6,000 members, have moved to the Pension Protection Fund assessment period, which occurs automatically when a sponsoring employer becomes insolvent. The remaining 21,000 members are in schemes that have at least one sponsor not in insolvency and are therefore not in the PPF. When a scheme moves into the PPF, the worst-case scenario is that the fund ensures that all pensions in payment continue to be paid at 100% of their value, and people who have benefits in such schemes for the future will receive those benefits at 90%, at least, of their expected value, subject to an overall ceiling on the amount that any individual can receive from a pension.
The Prime Minister restated on Sunday that the Government will shortly consult on tough new rules to tackle the behaviour of executives who try to line their own pockets by putting their workers’ pensions at risk—behaviour that she rightly labelled
“an unacceptable abuse that we will end”.
The official receiver has also taken immediate action to stop severance and bonus payments to former Carillion directors.
My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has written to the Insolvency Service and the official receiver asking that their statutory investigation into the conduct of Carillion’s directors is fast-tracked and extended in scope to include previous directors. He has also asked the Financial Reporting Council to conduct an investigation into the preparation of Carillion’s accounts past and present as well as the conduct of the company’s auditors. I can assure the House that no payments have been made to board directors or the former directors who had severance agreements since the date of liquidation. Directors with such severance agreements became unsecured creditors from the moment of liquidation.
Finally, in his opening remarks the hon. Member for Hemsworth touched—probably more than touched—on the overall questions about the outsourcing policy of this and other Governments. It is worth pointing out that outsourcing, whether in construction or the provision of services, is something that successive Governments—Labour, coalition or Conservative—have been doing since the 1990s. The services provided to the public sector by private companies include IT, back-office services, facilities management and other business services, such as running call centres. In many cases, those services have now been delivered by private sector companies for 10 or 20 years, and many have built up specialist expertise, skilled staff and investment to deliver public sector contracts.
This is a matter not just of cost, but of quality and innovation. If we look at a project such as Crossrail—the largest infrastructure project in Europe—that railway will open on time and on budget later this year. To deliver that project on time and within budget, Network Rail and Transport for London work with a huge range of private sector companies—including Costain, BAM Nuttall, Balfour Beatty, Morgan Sindall and others—and use their specialist expertise, which is something, frankly, that civil servants are not trained to have.
I could list a long catalogue of examples of such successful use of private sector companies to deliver capital investment into our hospitals, schools and transport infrastructure and successfully to deliver the provision of public services in all aspects of the public sector. What I found to be such a pity about the hon. Gentleman’s contribution was that he resorted to ideology, instead of looking at the people—our constituents—who actually use the services and who benefit from the better value for money and innovative quality that private sector contractors are able to bring, and have brought successfully, to that work.
Not only that, but in an enchanting display, the hon. Gentleman disavowed his party’s entire history of 13 years in government. Let us not forget that the majority of outsourcing in the NHS took place under the Labour Governments between 1997 and 2010, as part of an initiative that was championed, in particular, by the current Mayor of Greater Manchester.
Let us look at what the Labour party has said since it left office. The shadow Communities and Local Government Secretary praised Carillion as an example of “good public procurement practice”, and the shadow Foreign Secretary praised it for offering apprenticeships to her constituents. The shadow Housing Secretary has said that PFI helps to deliver better and more cost-effective public services, and the shadow International Trade Secretary described it as
“a staggering investment in the future of…children and…excellence”.—[Official Report, 15 November 2002; Vol. 394, c. 308.]
The shadow Northern Ireland Secretary said PFI provided “good value for money”. [Hon. Members: “When?”] It is very interesting that Labour Members feel they have to conform with the new dear leadership that the hon. Member for Hemsworth wanted to celebrate, but they should have the courage of the convictions they expressed when in office and since about the value of a proper constructive partnership between the public and private sectors in the interests of the constituents we are sent here to represent.
The shadow Health Secretary says that NHS experts accept that only a “handful” of PFI contracts are causing hospital trusts a significant problem. Labour council leaders in Manchester, Birmingham and Hounslow have praised public-private partnerships for delivering growth and urban regeneration in their areas. For all the denunciations of Carillion, one third of the contracts that the state sector still had with it at the time of its liquidation were awarded by the Labour Governments of the early 2000s—Labour Governments in which the hon. Member for Hemsworth served as Gordon Brown’s right-hand man in No. 10 when that outsourcing work was at its zenith.
The Government are committed to ensuring that the public sector continues to benefit from the best of private sector innovation and skills. We do not put ideology first; we put the service user and the citizen first. That is the policy that the Government are committed to and which we intend to continue.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
Mr Deputy Speaker, may I begin by welcoming you back to your rightful place? It is a great pleasure to see you there once again.
This has been an important and timely debate on the insolvency of Carillion. The decision by the directors to put Carillion into compulsory insolvency affects the lives and livelihoods of not just the 19,500 Carillion employees but many thousands of small businesses, contractors and employees up and down the country. This debate has been well attended, and I am sure that Members will understand if I cannot address each and every point raised. I promise to write to everybody who has asked a question, and will briefly touch on a few of them now.
The hon. Members for Wolverhampton North East (Emma Reynolds) and for Wolverhampton South East (Mr McFadden) raised several issues. I pay tribute to the diligence and commitment they have shown their constituents in trying to find out what happened with Carillion and to ensure that those workers are being treated as fairly as possible. They asked when people would get paid. The special manager, as they may know, has given a commitment that staff will be paid until at least the end of the month. However, as was highlighted in the debate, Wolverhampton is the nerve centre, and if the special managers are to continue running the business to maximise the benefits to creditors and ensure a smooth transition, that nerve centre will be vital to its future. I think they can be confident, therefore, that the future for them looks more certain.
My hon. Friend the Member for Cheltenham (Alex Chalk) raised a point about a constituent of his. I have looked at this and been advised that PWC is talking to the directors of the company today. If it continues to have problems with the financing of the business, I ask that my hon. Friend get back in touch with me, because I have some more information, which I will come to in a few moments.
The hon. Member for Liverpool, Riverside (Mrs Ellman) understandably raised her concerns about the impact on the Royal Liverpool Hospital. I can confirm that PWC has been instructed to continue paying the Carillion construction staff currently on site. That project, along with the other hospital projects, is a priority for the Government, and we are working incredibly hard to get them moving as quickly as possible. I will endeavour to keep her updated.
James Frith
Hargreaves is a company in Ramsbottom in my constituency that is contracted to put fire extinguisher equipment into the hospital. It has been asked by PWC to go in and complete the work, but PWC has also acknowledged that its retention fee is lost and that it should not expect to be paid for completing that work. Will the Minister give special attention to that issue?
Andrew Griffiths
I thank the hon. Gentleman for raising that point; he mentioned it earlier in the debate. I think he said it was asked to “finish the job for nothing”. I can confirm, having discussed it with the special manager, that anybody who is contracted to complete work after the date of compulsory liquidation will be paid by the special manager. I can put him straight on that one.
The hon. Member for Birmingham, Erdington (Jack Dromey), when he had finished his Castro-esque anti-capitalism rant, raised the issue of apprentices in his constituency who were sobbing because they had lost their opportunity of an apprenticeship. I think that that issue was also raised from the Opposition Front Bench. The Construction Industry Trading Board has taken over responsibility for the apprenticeships, and 1,100 of the 1,400 apprentices who are currently working for Carillion have had face-to-face interviews with the board and have been offered new apprenticeship roles. The board has confirmed that any of those 1,400 who wish to continue their training will be allowed to do so, which I think is very good news.
The hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) said that he was “excited”. This is probably the only occasion on which I will agree with him in the Chamber—he certainly was excited.
My right hon. Friend the Minister for the Cabinet Office set out his approach to the oversight of contracts and awards and how that process relates to Carillion, and gave a detailed explanation of the measures that had been introduced. Let me add that when it was decided to place Carillion in insolvency, the Government had two priorities: to protect and maintain the delivery of vital services in schools, hospitals and prisons and on the railways, and to support not only the 19,500 people directly employed by Carillion, but the contractors and small businesses involved.
It was because we wanted to support the people whose lives had been affected that, on the very day of the collapse, my right hon. Friend the Secretary of State held a meeting with the eight largest trade bodies in the construction sector in order to understand better what we could practically do to help. They had four requests. First, they said that they wanted to be supported by their banks at that difficult time. In response, the Secretary of State and I convened a meeting of the banks, and asked them for tailored and sympatheic support for those affected. As a result of that meeting, nearly £1 billion has been made available by major lenders such as HSBC, Lloyds, RBS, and Santander in the form of loans, credit facilities and further financial support.
Secondly, many small businesses, in particular, were concerned about imminent tax liabilities. Her Majesty’s Revenue and Customs has now said that a “time to pay” facility will be available to businesses affected by Carillion’s insolvency, to give them the support and flexibility that they need.
Thirdly, the bodies asked for a meeting with the official receiver’s specialist manager to discuss the particular needs of the supply chain. At the Secretary of State’s request, PricewaterhouseCoopers has now met them, and me, twice, in order to tailor specific support where it is needed. Fourthly, they asked for a taskforce to be established to pool efforts to help the supply chain in particular. In response we have formed such a taskforce, chaired by my right hon. Friend the Secretary of State, which will meet for the third time—
Andrew Griffiths
This taskforce was requested by the trade unions because they thought that it would have value. If the hon. Gentleman does not think that that is an effective thing for us to do, perhaps he will have a word with his friend Len.
The taskforce includes representatives of business sector organisations, the TUC, the Federation of Small Businesses, the Department for Work and Pensions, the Cabinet Office, the Local Government Association and the Construction Industry Training Board. We are working together to address the challenges, and to come up with solutions that will support the affected businesses and employees.
Finally, there is the issue of accountability. There have been questions about directors’ pay and bonuses. I can reassure the House that my right hon. Friend the Secretary of State has written to the Insolvency Service asking it to investigate the actions of the directors properly. He has also written to the Financial Reporting Council to ensure that the actions of not just the current directors, but previous directors, are thoroughly investigated. Powers include the ability to claw back bonuses if that is required.
We have stepped up to work with those businesses that, through no fault of their own, find themselves in a difficult position. We give a commitment to this House that at the forefront of our efforts are the thousands of people whose jobs and livelihoods, through no fault of their own, have been affected by the Carillion insolvency—
Mr Nicholas Brown (Newcastle upon Tyne East) (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.
Question agreed to.
Resolved,
That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions to the Chancellor of the Duchy of Lancaster that the assessments of risks of Government Strategic Suppliers by Her Majesty’s Ministers referred to in the Answer of 19 December 2017 to Question 114546 and any improvement plans which Crown Representatives have agreed with such strategic suppliers since 2014 be provided to the Public Accounts Committee.