PFI contracts – windfall tax them says Labour MP who says companies are “legal loan sharks”

Labour MP Stella Creasy on Today programme this morning:

“What the NAO reports shows, to devastating effect, is that PFI and PF2, because the government brought in exactly the same scheme under a different name, is both too expensive to continue on with and very expensive to get out of.

Of that £10bn [the annual charge for PFI contracts] what that study also shows is that half of that is interest on charges. These companies, these type of contracts, really are the legal loan sharks of the public sector. It’s like a payday loan or a hire purchase agreement to build a school or a hospital and then run one. It’s a very expensive way to do it. And the question we all have to ask ourselves is what do we do next.

This is why I’m calling for a windfall tax on these companies. The one place where we do have leverage with them is on the tax they pay. They’ve also had a massive corporation tax bonus because corporation tax on a lot of these contracts [when they] were signed, and it was part of the deal and the reason why we went with them, was around 30%. Under this government it has now dropped to 17%. So we are estimating that some of them have saved around £190m in corporation tax payments alone. That is money that is owed to our public sector, and is money we could get back with a windfall tax.”