Labour staged an undignified retreat today on John McDonnell’s boast that he would seize back private finance contracts worth £300 billion.
Senior colleagues clarified that, contrary to the shadow chancellor’s speech yesterday, only a “handful” of the PFI deals would be taken over.
And the entire policy appeared to be being buried in the long grass of a case-by-case review, which could take years to complete.
Mr McDonnell had seemed unequivocal that all contracts would be bought out or torn up when he told conference: “We will bring existing PFI contracts back in-house. We’re bringing them back! We’re bringing them back!”
But health think tanks said the NHS would have to spend about £30 billion just to cancel PFI deals used to build and maintain hospital and other NHS assets.
Business group the CBI said his plans would send investors “running for the hills” and amounted to “massive state intervention”.
Shadow health spokesman Jonathan Ashworth said during a media round this morning that only a minority of the contracts would be taken back.
He denied that Mr McDonnell had “jumped the gun” in his speech, which won loud applause from the hall.
Asked how many PFI contracts are a problem, he told Today: “NHS experts generally accept that it’s only a handful which are causing hospital trusts across the country a significant problem, but let’s look at every single one in detail.”
Put to him that individual contracts could take years to unravel, Mr Ashworth replied: “Yes, this could take some time, this is not a thing that happens overnight.” Another shadow cabinet member said that many contracts would be left alone because, whatever their faults, they were due to end within a few years. Of the rest, some had break clauses built in and others could be renegotiated. “There are a lot of different ways to approach the problem which is why we have to hold a review,” he said.
Read More
“A lot of these deals were started by the Tories over 20 years ago and they will be naturally reaching the end of their lifespan before the review can be finished.” Aides to Mr McDonnell earlier said the review was expected to find that most deals were appropriate for returning to public hands.
