Contingencies Fund (No. 2) Bill

– in the House of Commons at 11:51 am on 11th March 2021.

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Second Reading

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury 11:58 am, 11th March 2021

I beg to move,

That the Bill be now read a Second time.

This is a technical measure that concerns cash management. Its purpose is to allow the Government to use cash advances to act swiftly and decisively to safeguard the people of this country, both from the impact of the covid-19 pandemic and from other unexpected events. But I would emphasise that money from the Contingencies Fund constitutes a cash advance, which will have to be repaid once a Supply estimate is voted through the House; it is not additional spending. It is important to be clear that the House will still be able to scrutinise and debate where resources have been allocated in the usual way when the Government publish the Supply estimates.

As hon. Members will be very much aware, Parliament provides the Government with the authority to expend resources in the form of capital and cash. However, the Government must also sometimes provide a swift financial response to national emergencies and other pressing events. That is why the Contingencies Fund exists. In the Contingencies Fund Act 1974, Parliament put a limit on the amount that could be issued from the fund at 2% of the previous year’s cash spend. That cap has normally proved to be sufficient to meet unexpected and sudden financial requirements, but we are not living in normal times at present, and uncertainty as to the impact of covid-19 has required a degree of flexibility in setting the cap.

As colleagues across the House will recall, a year ago, as the full implications of the pandemic started to emerge, the House agreed to change the limit on the Contingencies Fund from 2% to 50% of the previous year’s cash spend for the financial year 2020-21. That had the effect of raising the amount in the fund from a possible £11 billion to £266 billion. This cash advance has been invaluable to Departments in dealing with the unprecedented events that have been set in motion by the pandemic. In fact, over the past 12 months, requests from the Contingencies Fund have totalled over £210 billion. It has provided the cash for Government interventions to support businesses, to support frontline workers and to pay for the furlough and other schemes. In addition, it has provided the financial firepower to help the NHS through the crisis, and it has funded numerous other measures that have helped to safeguard lives and livelihoods throughout this extraordinarily difficult period. As is the case in every previous year, the fund has also paid out on business-as-usual requests.

This Bill again seeks to adjust the limit on the amount that can sit in the Contingencies Fund for the financial year ending 30 March 2022 to 12% of last year’s cash spend. I will set out the reasoning behind that decision. With the new cap, the amount in the fund will total £105 billion. By contrast, with the 2% cap—the normal percentage limit—the fund would have contained £17.5 billion. That is clearly a substantial sum, and it would be more than ample to deal with spending requirements in the normal run of things.

While the Government will provide Departments with suitable resources for the 2021-22 year, it is prudent to be prepared in cash terms. While the resounding success of the vaccination programme offers us light at the end of the tunnel, it is equally true that we must remain vigilant. The crisis is not over, and therefore the Government believe it is only right to retain flexibility on the amount in the Contingencies Fund. However, given the experience accrued by each Department over the last year in dealing with the virus, we can scale back the limit from 50% of the previous year’s cash spend to 12%. Once again, let me assure Members that the House will still be able to scrutinise and debate where resources have been allocated in the usual way when we publish the supply estimates.

This is a small and technical but important Bill that will allow the Government to deal with unexpected events over the coming year. It provides Departments with a mechanism to respond swiftly and decisively to emergencies and sudden, unpredictable needs so that they can safeguard our public services and support the wellbeing of people across the country. It does not impinge on Parliament’s right to scrutinise and question, but it does underline this Government’s commitment to do whatever it takes to protect lives and livelihoods in order to overcome this virus, and I commend it to the House.

Photo of James Murray James Murray Shadow Financial Secretary (Treasury) 12:03 pm, 11th March 2021

I thank the Financial Secretary for setting out the case for the Bill so clearly. The Bill seeks to amend the Contingencies Fund Act 1974, which is one of the monuments of a previous Labour Government. The 1974 Act embodies principles that are central to the accountability of Government, so its amendment should not be taken lightly.

This time last year, the Opposition fully accepted that the conditions of the pandemic made it necessary, expedient and right for there to be provision for the Government to act swiftly. We accepted that, in the rush of the early response to the outbreak, there could be times when it would not be possible to follow normal procurement processes. We accepted that, at certain points, the spot price paid for particular goods facing global shortages might be higher than it would otherwise have been, and we accepted that, on occasion, at a time when the Government were taking on entirely new responsibilities, some mistakes would be made. But we do not accept, and the British people will not accept, that what may have been excused in the early days of the outbreak has turned into a succession of failures and scandals, which it seems Ministers can no longer even see as wrong.

Last year, the Opposition agreed to a rise in the provision of the Contingencies Fund to some 50% of annual expenditure. While we accept that a higher than usual level for the Contingencies Fund is again in order and we will not be opposing the Bill, Ministers would do well to remember that the fund was created as a fall-back and that its extension is an emergency response, not an opportunity for unaccountability. Ministers seem to have forgotten that public money needs to be spent effectively, in a way that achieves value for money and commands public confidence.

The starkest example of failure by this Government must surely be their flagship Test and Trace scheme, a programme outsourced at great expense and the subject of a report published yesterday by the Public Accounts Committee, which was truly damning. The Government should be embarrassed and deeply apologetic over Test and Trace, which Lord Macpherson, who led the Treasury civil service from 2005 to 2016, described as

“the most wasteful and inept public spending programme of all time.”

What makes it even worse is that everyone in the country desperately wanted Test and Trace to work. Everyone was willing the programme and its team to succeed. We all wanted and needed that money to be spent on a programme that would achieve its stated goal, and we have all witnessed the profound consequences of incompetence on such a scale. I lost count of the number of times that my right hon. and learned Friend Keir Starmer, my right hon. Friend Jonathan Ashworth and my hon. Friends the Members for Oxford East (Anneliese Dodds) and for Houghton and Sunderland South (Bridget Phillipson) called for the Government simply to focus on getting Test and Trace working, yet Ministers did not.

The opening summary of the Public Accounts Committee’s report contains the following telling sentences:

“The Department of Health & Social Care justified the scale of investment, in part, on the basis that an effective test and trace system would help avoid a second national lockdown;
but since its creation we have had two more lockdowns. There is still no…evidence to judge”

Test and Trace’s “overall effectiveness”.

Only people who have no real understanding of the value of money or the importance of public investment in changing lives for the better could be so reckless about how it is spent. We believe that the Government really need to learn from the last year, not only by accepting that the outbreak exposed the weakness of our rights at work and the impact of a decade of cuts to our public services, or by recognising that they repeatedly did too little, too late to protect the public’s health and our economy, but by making serious structural reforms to how they initiate and examine spending.

The shadow Chancellor, my hon. Friend the Member for Oxford East, has set out how the next Labour Government would do things differently, by taking a robust and determined approach to ensuring that public money improves the lives of those we serve. She has explained how we would invite the Comptroller and Auditor General to submit an annual report to Parliament, bringing together the National Audit Office’s findings throughout the year into a single assessment of the effectiveness of public spending in those areas that it has examined. As my hon. Friend has said, we must hard-wire value for money into the budgetary process.

But the value for money aspect is not the only part of this extraordinary year for public spending that commands our attention. It would be possible to achieve value for money and yet still fall far short of other standards we expect. That is why the new clause that the Opposition will move in Committee seeks to improve the transparency of Government spending.

We know only too well, as my hon. Friend Rachel Reeves has set out, that the way in which procurement is conducted also matters very much. Put simply, the time to end emergency procurement is overdue. Covid, as she rightly observed, is no longer a surprise. Supply chains have been established and, while there are of course still significant challenges and responding quickly remains essential, there is no longer a case for the continued widespread use of emergency measures of procurement for items that the Government now know how and where to find.

Contract publication should now follow the normal rules, and when contracts fail to deliver, the Government should get money back. That is public money. “Deliver or you won’t get paid” is what contractors expect from every other organisation and company they supply. The Government must not be the softest touch in the market.

We must drive a culture of transparency throughout public spending. The new clause that we will move today seeks to improve the transparency of the Contingencies Fund, because that is what the Bill before us concerns, but it is time for every part of public spending to achieve better value for money and for the Government to use their spending power to improve standards in the way the public would expect. The Opposition believe that achieving these changes need not be difficult or controversial.

We recognise the power of public investment to transform people’s lives for the better. That is fundamentally why we, like the British public, cannot bear to see Ministers casually and carelessly waste public money on deals that do not deliver, on contracts that do not work and on outsourcing that should never have taken place. Every pound that this Government misspend makes it that bit harder for nurses to accept the Chancellor’s pleading that a 1% pay rise is all he can afford. Every penny that this Government waste could have gone towards building a fairer, more secure future for our country. We will not be opposing the Second Reading of this Bill, but our new clause in Committee will set out a new standard of transparency that would pull Ministers up, force them to sharpen their focus on value for money and make sure we have more money to spend on the things that matter to us all.

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means)

Before I call Andrew Jones, I want to point out that although what we are dealing with is very important, we also have the Committee of the whole House and Third Reading, and then we have 70 contributions in the International Women’s Day debate. If people could keep that in mind as they consider the length of their contributions, I would be extremely grateful.

Photo of Andrew Jones Andrew Jones Chair, European Statutory Instruments Committee, Chair, European Statutory Instruments Committee 12:10 pm, 11th March 2021

I will, of course, follow your advice as scrupulously as ever, Mr Deputy Speaker.

This Bill is about cash flow. It is not about all the stuff that we have just been hearing from the shadow Minister. All organisations have to manage their cash flow and meet their liabilities, and failure to do so is a significant reason for corporate collapses. It is, obviously, different in the public sector, but the rule about meeting liabilities remains as Government react to urgent situations. There are also clear mechanisms for making sure that in the event of a cash need, the cash will be there. That is what the Contingencies Fund is.

This Bill is about the Treasury’s capacity to make repayable advances to other Departments, so that they can react to events if needed. Parliament has long recognised that principle. The legislation governing it is 45 years old, but in fact the principle was established by Treasury minute in 1862, when the Contingencies Fund was created. For this financial year—and the next, if we pass this Bill—the threshold allowed in the legislation has been increased, and for obvious reasons. We are dealing with the greatest health crisis in 100 years.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

I spoke to the hon. Gentleman beforehand. Although I understand that this is specifically about cash flow, the whole House recognises that there is a real crisis in cancer treatment when it comes to diagnosis and surgical operations, and many people have died waiting for those to happen. Does he agree that covid-19 has increased the demand for cancer care, and therefore all requests that come from the NHS and the Department of Health and Social Care must be treated sympathetically and urgently?

Photo of Andrew Jones Andrew Jones Chair, European Statutory Instruments Committee, Chair, European Statutory Instruments Committee

The hon. Gentleman makes a very good point. There is no doubt at all that we have seen some health treatments delayed as a result of the crisis, and that is a real tragedy. He is right that cancer is one of those where we should be most concerned, and the requests that come in should be treated with urgency and compassion as we seek to catch up on the treatments that the people we represent urgently need. That was a wise point.

I go back to the core purpose of the Bill and why it has been introduced. The Government needed to respond quickly and at scale, and they have done so. The Bill before us is about renewing the increased capacity for the next financial year, and we are only three weeks away from the new financial year. We are being asked to approve a one-year increase in the limit from 2% to 12%. That is, of course, a big jump, which amounts to more than £100 billion. We should also perhaps remind ourselves that the House approved an increase in the limit to 50% for this financial year—truly exceptional in every way.

I support increasing the limit in the Bill. We are not through this pandemic, and it is not hard to imagine circumstances where the Government have to react urgently ahead of the regular voting provision under the normal supply procedure. One of the lessons of the past year has been that the course of the pandemic has not been linear. None of us can guarantee that the future will not require urgent action. In reality, we can probably all predict that it will.

As my right hon. Friend the Minister said, this is quite a dry Bill, but once a Treasury Minister, always a Treasury Minister. That does not mean, however, that we should not scrutinise; of course we should. But the Bill does not increase budgets, and it does not give the Government a blank cheque. These are cash advances, which are highlighted to Parliament through the normal estimates booklets and memoranda, and then we vote on them. There is transparency as funds are drawn upon by Departments. There is guidance agreed between the Treasury, the National Audit Office and Parliament. That means that written ministerial statements are published throughout the year and cash advances are included in the main or supplementary estimates. I hope we will not be facing a contingencies Bill for the 2022-23 financial year. The progress that we are making in tackling the virus is obviously fantastic, but the consequences will be felt for a long, long time.

It is too early to spend time on an inquiry on the lessons from the pandemic, but one thing I am sure we will consider in due course is how well and how quickly government—I am talking about the UK Government, devolved Administrations, local government and, above all, the NHS—have responded. They have been nimble and dynamic in their response. This Bill is simply about facilitating the cash flow to allow that quick response and that is why we should all support it.

Photo of Richard Thomson Richard Thomson Shadow SNP Deputy Spokesperson (Treasury - Financial Secretary), Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Northern Ireland) 12:15 pm, 11th March 2021

This is a short but important Bill. Last year’s measures in the Contingencies Fund Act 2020 were absolutely unprecedented. Setting a level of 50% on the fund ensured that the rapidly evolving policy response to covid-19 could be matched with the necessary resource. It was important that we did so. At that time, we were heading for a lockdown and a parliamentary recess for Easter. It was unclear when Parliament would be able to return and we had no means at that point, at least as I recall, of enabling virtual participation in Westminster, so it was essential to allow necessary and perhaps even extraordinary expenditure to take place in the short to medium term to support the policy responses to covid that were deemed to be necessary, without the requirement for us to reconvene Parliament to ensure that further spending could be authorised.

This year’s Bill, by extending the scale of the fund beyond the usual 2%, clearly recognises a need for that flexibility to continue. Setting this year’s contingencies fund at 12% may well give access in the short term to the same amount of resource that was used in practice last year. In the light of experience, it may be felt that out of all the arbitrary figures that could have been chosen for the Bill this year, this is the figure that somehow just feels right. However, for all the progress that has been made with vaccines and vaccinations in recent times, we are not out of the woods yet. There have been mutations to the virus, which have increased its virulence and forced us in consequence to change our behaviours and responses. There may yet be further mutations that force us to further reappraise our plans on how we wish to emerge from the present restrictions.

The only thing that we can predict with certainty about the future of living under this virus is that we cannot predict it with certainty. As such, while the Scottish National party group supports the Bill and will not oppose the 12% level being set on the fund, I will place on the record that we would have been content, in the interests of prudence and good governance, to see a higher figure being used.

Let me turn to the proposed amendment; I am aware of your injunctions about time, Mr Deputy Speaker, and that the Bill will have a Committee stage. I have looked at the amendment, which has been tabled in the name of the Leader of the Opposition and the shadow Chancellor, and although it increases the length of the Bill tenfold, it clearly seeks to tackle important issues regarding transparency and accountability in Government spending. I have a lot of sympathy with its intent and will listen carefully to the arguments in Committee.

There is, however, a much wider issue regarding the ability of this House to properly scrutinise Government expenditure, which extends to the estimates process. For someone who entered the House with a background in local government and who bore the scars of passing budgets as a co-leader of a minority council administration, it is remarkable, in contrast, how contested local authority budgets running to just hundreds of millions of pounds can be, when hundreds of billions of pounds across the year in central Government expenditure can still sail through relatively untroubled by the interference of competing views from the Opposition. Although there have been some recent changes to the estimates days’ debates—the estimates can now be debated rather than needing the vehicle of Select Committee reports related to them—it is still extraordinary to my mind that there is no meaningful way to seek to amend Government spending through the estimates process or an ability, as a matter of course, to scrutinise planned departmental expenditure before it is approved.

That brings me, in closing, to the current fiscal framework. The Scottish Cabinet Secretary for Finance has repeatedly pressed the UK Government to provide extra flexibility so that the Scottish Government can mobilise funding when it is most urgently needed through this crisis. While the UK Government have indeed confirmed that the late funding allocated in this financial year could be carried forward into 2021-22 without having to use the Scotland reserve, that flexibility is still limited and temporary. The crisis has revealed a fiscal framework in the UK that is not fit for purpose. As the previous furlough extension for England demonstrated, no matter what the devolved Governments might wish to do in policy terms, problems still have often to be felt first in Whitehall before a budgetary response is triggered for England, which then triggers its way through to other Governments.

In my view, the best people to take decisions for Scotland are those of us who make our lives here. The policy choices we make should be restricted only by the limits of our own resources, the limits of our own choices and the limits of our own imaginations, and not by limits and constraints that are set elsewhere. We will continue to press for these additional flexibilities as part of the fiscal framework review.

Photo of Saqib Bhatti Saqib Bhatti Conservative, Meriden 12:20 pm, 11th March 2021

I refer Members to my entry in the Register of Members’ Financial Interests. I also take note of your indication to limit our contributions, Mr Deputy Speaker. I could speak for hours on the Bill, but I will refrain from doing so.

I want to speak in favour of the Bill because, quite frankly, if there was ever a time when we needed a contingencies Bill it would be during a pandemic, and we are still in a pandemic. As the Financial Secretary said, for those members of the public who will be watching today, the Contingencies Fund Act 2020 enabled Government Departments to increase their percentage of spending at a time when the country needed it most. It was vital to make sure that the Government could act in a timely manner to safeguard the people of our country.

This is, of course, a contingency. It is not additional spending. It is there to ensure that Departments have access to funds if needed. If there is one takeaway from the past 12 months, it is that we should be prepared for every eventuality. It is appropriate that the percentage of the total supply expenditure is reduced to 12%, as opposed to the 50% it was last year. Of course, last year, when the previous Bill was passed, we knew we had a crisis, but it would have been near impossible to estimate the full cost of Departments’ needs at that time.

Today, we know more. We have a world-leading vaccination programme, which means we have vaccinated over 22 million people. We know that infection rates are falling and, thankfully, the Prime Minister has laid out a road map as to how the economy will open up. In the light of that, it is correct to reduce the contingency need while not yet returning to the normal 2%. We are, after all, not in normal times, so the normal 2% cannot apply. I would go further. This Bill, in my view, represents strong leadership, as the previous one did at the start of the pandemic.

We should not forget what the previous Bill allowed Government Departments to do. The urgent procurement of contracts allowed the Government to be swift in their response. It allowed us to deliver 32 billion items of personal protective equipment—32 billion, Mr Deputy Speaker—and 22,000 ventilators, when at the start of the pandemic there was an acute need. Those were quite literally matters of life and death. In such instances, the Government have but one duty: to take every possible measure to provide security and safety for their citizens. Since then, we have also completed 96 million tests. That is a phenomenal achievement and we should not downplay that.

As we look to the Bill, it is correct to think about how the resources will be applied until the supply and appropriation Bill is voted on in this House. The Chancellor last week set out a characteristically world-leading Budget, ensuring, to name just a few: the furlough scheme, which has been a lifeline for so many, continues until September; more money for apprenticeships and restart grants to get our worst-hit businesses back up and running; and the extension of universal credit. There are also infrastructure spends across the country, which are a testament to my right hon. Friend’s focus on the next stage of dealing with this pandemic. As we emerge from the public health crisis, we must look to the economic recovery stage.

Accountability and transparency matter, of course, and the Bill does not take away the usual mechanisms that have been in place for ensuring that expenditure is met through the contingency fund and that it is scrutinised. Advances made in this way are presented in the usual way in the estimates booklet and the memorandums that Parliament can scrutinise and vote on.

To hinder the Bill would in my view seriously hinder the Government’s response in dealing with the pandemic. It would risk undermining the measures by the Government to help those who need our urgent support. That is why I am supporting the Bill.

Photo of Dawn Butler Dawn Butler Labour, Brent Central 12:24 pm, 11th March 2021

It is correct that a contingencies fund Bill is vital when the Government need to react, especially during the pandemic, but it relies on trust. Trust requires transparency, truth and honesty. Most colleagues in this House will have noticed the Conservative party’s habit of gaslighting the nation over the past decade. “We’re all in this together,” Osborne and Cameron said, before axing the safety net that the poorest in our country relied upon. I recently read a quote that said:

“We’re not all in the same boat, but we are going through the same storm”— some of us are in yachts, some of us are in boats and some of us are in dinghies and just holding on.

Recently, Boris Johnson and Rishi Sunak promised to take care—

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I have to correct my hon. Friend—I will put it that way. Please do not refer to current serving Ministers or other Members of Parliament by their names.

Photo of Dawn Butler Dawn Butler Labour, Brent Central

My apologies, Mr Deputy Speaker.

The Prime Minister recently promised to take care of the nurses who sat at the nation’s bedside during one of our darkest moments, before offering them an insulting and paltry 1% pay rise—a real-terms pay cut. The question of cronyism is no different. Ministers on one hand claim that they did nothing wrong. They say that Opposition Members are stirring up fake news, and that we are not patriotic if we dare to question their actions and how they are spending public funds, yet when the evidence is too powerful and shocking to ignore, when it is so stark that the Government have to respond, they say that their mistakes can be excused because they were rushing to procure vast amounts of equipment in a national crisis. Both those things cannot be true, so which is it? Which do they believe?

Of course, the country is willing to accept that mistakes were made, but that was a long time ago—a year ago, in fact. Ministers must have the humility to admit their mistakes and errors, and work with the Opposition to ensure that the current situation, which has eroded many people’s basic trust in democracy, is never repeated. Supporting this amendment is a start.

The truth is that the evidence is overwhelming: as Byline Times has calculated, more than £900 million in coronavirus-related contracts has been awarded to firms that have donated to the Conservative party—a huge return on their donations. The country’s purse is not the Government’s piggybank. Countless more deals have been awarded to former Government advisers, chums of Dominic Cummings and former drinking pals of the Health Secretary. Ministers may dispute why so many deals have been awarded to firms with close ties to the Conservative party and senior Government figures. Some of those firms were not even suitable or equipped to deliver what was needed.

The reason could be the Government’s infamous VIP lane, which meant that some firms with links to Ministers, MPs and officials were 10 times more likely to win contracts. Some of it could be down to the old boys network—who knows? We still do not know, but we should know before we continue to trust the Government. Some Ministers may know what is going on and why, and what the cause is of this rampant cronyism, but all Ministers and Conservative Members must recognise the basic facts: vast amounts of public money have been spent and wasted on firms with Tory and Government connections. People across the country are angry and disillusioned.

The Conservatives’ own constituents, and constituents of Members on both sides of the House, are questioning why the Conservative party has abandoned its belief in the basic principle of accountable, transparent public spending. It is imperative that Ministers and officials figure out the root cause of this rampant cronyism, admit their errors and safeguard public money so that, in the future, it cannot end up in the hands of Conservative donors.

Some in the Conservative party might say that the money is not wasted because some of the money that has been given to companies is finding its way back to the Conservative party through donations, but that is wrong and corrupt. If I am wrong in what I am saying, the Minister, when he gets to his feet, must admit the mistakes and errors made.

Photo of Anthony Browne Anthony Browne Conservative, South Cambridgeshire 12:29 pm, 11th March 2021

I welcome the Opposition’s interest in this motion. It is incredibly important. I particularly welcome their conversion to the importance of value for money. It is the Conservative party that has always been the party that realises that we are just guardians of public money. It is not the Government’s money. It is taxpayers’ money and we should treat it as carefully as if it were our own.

I arrived at City Hall after Ken Livingston was there and when the current Prime Minister was Mayor of London. We went through the accounts and were absolutely shocked at the staff’s attitude towards money—it was just there to be shovelled out the door. We imposed a very strict control regime, which dramatically reduced costs and improved value for money. If Labour Members want to learn more about value for money, I would welcome them to the Conservative Benches, so that we could discuss it.

This whole debate reminds me slightly of discussions that I have often had with environmental activists about nuclear power. They come out with lots of arguments against nuclear power. One by one, those arguments are knocked back. Finally they say, “Well, it costs too much.” When they resort to that argument, we realise that they have lost the argument. The reason the Labour party is focusing so much on value for money is, I fear, not because it has converted to this cause, but because there are no other lines of attack for it to follow.

If we look at the progress of this pandemic since it started, we will see that, at the very beginning, we were really worried about not having enough ventilators. We now have 22,000 ventilators. We have far more ventilators than we need at the moment. Then there was the personal protective equipment crisis—remember that? There was shock, questions and attacks the whole time from the Opposition, who were saying that we did not have enough PPE and asking why we did not have it in stock. Actually, we only made 1% of the PPE in this country. We did not have manufacturers that we could turn to and say, “Can you ramp up supply?” There was a global shortage. We now have, as my hon. Friend Saqib Bhatti said, 32 billion parts of PPE in stock and 70% of it is made in this country. There is no line of attack that the Labour party can make on PPE.

Then we come to vaccination. The Labour party previously made many attacks on vaccination. What can I say? We all know, everyone knows, the voting public know that it is a great success. It is an absolute triumph and truly world leading, as is so well documented, thanks mainly to many teams across the NHS and the public sector, but also to the vaccine taskforce led by Kate Bingham.

The Labour party has raised test and trace because of the Public Accounts Committee report yesterday. The report said many things. It did not say that 80% of the cost of test and trace is on the testing. On the testing, we are very much a world leader. I was looking at the figures for the G20 countries—the 20 main countries in the world—and we are doing twice as much testing as any other G20 country in the world. According to Our World in Data, we are doing 10.54 tests per 1,000 people a day in the United Kingdom. The next highest in the G7 is Italy, at 5.2. We are doing four times as much as Germany, and three times as much as Canada. We are truly world-leading in testing and that costs money. It also means that all the children can go back to school. We did 1.5 million tests on the day that they went back to school. It is only because we can do the testing and the tracing that follows that children can go back to school to regain their education and we can slowly return to normality.

All these are great successes and the Labour party should welcome them. The British public can see it: we can see the mood of the nation changing and, fingers crossed, that will continue. However, we are still in the middle of the pandemic. It is not over yet. It is too soon to take the hands off the brakes and say, “Let’s roll down.” Things could go the wrong way and it is absolutely right that the Government continue with their contingency policy, with 12% of supply, in case other things flare up. This is not about spending more money. It is about giving us the ability to spend money should it be needed and I fully welcome it.

Photo of Kevin Hollinrake Kevin Hollinrake Conservative, Thirsk and Malton 12:34 pm, 11th March 2021

Accounts mean accountability. Every set of accounts needs contingency lines—sometimes quite annoyingly, in my experience—but this crisis has shown the importance of having a contingency fund.

I agree with my right hon. Friend the Minister: the Government have acted swiftly, decisively and with a great deal of flexibility in respect of the schemes they have rolled out. Almost every businessperson I speak to in my constituency is supportive of what the Government have done in this regard. It is not just the Government who have acted swiftly and decisively; bodies such as Her Majesty’s Revenue and Customs have done a tremendous job in getting some of the grant aid out to businesses, and we should be grateful for those efforts.

When I listened to the shadow Minister, James Murray—who I do not think is even in his place at the moment—all I got was a deep suspicion of the private sector. It was quite astounding. It was reminiscent of that great Churchill quote:

“Some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon.”

I just do not understand why the private sector is still anathema to Labour, even though it has been responsible for so many things in this crisis, not least the development of the vaccine, the first of which, the Pfizer vaccine, was rolled out without any public support whatsoever.

Things such as bounce back loans and coronavirus business interruption loans have all been delivered by the private sector, through the banks. As I am sure you recognise, Mr Deputy Speaker, I am not shy of criticising the banks, but this year they have done a tremendous job in getting the money out to businesses, yet we see no recognition from those on the Opposition Front Bench of what the private sector has done throughout this crisis.

All the money that flows through the contingencies fund will of course be accounted for and the Government will be held to account for the related spending. It is important that the Opposition should also be held to account for their spending. I find it quite astounding that the shadow Minister talks about value for money; I have sat through so many debates over the past five years in which Labour has called time and again for more spending via pensions, social security, health services and social care—whatever—despite our spending challenges and without any assessment of value for money. Labour just wants that money to be spent without any consequence or accountability. That cannot be right and the shadow Minister’s claim about value for money was quite laughable. Every bit of spending has to have somebody to pay for it, and that is, of course, the taxpayer, which is why we have to be careful and judicious with Government or public money. It comes from the taxpayer.

Most recently, Labour has been calling for a greater increase than 1% for nurses. Who is not sympathetic to that? But I do not hear Labour saying what pay rise it would give or how it would pay for it. It is surely a responsibility of any responsible party that wants to be in government to say how it would pay for things.

Finally, I think Dawn Butler was quite disgraceful in some of her comments. I may be wrong, Mr Deputy Speaker, but I thought she described Ministers as corrupt. I think that is something you might look at, because it is entirely inappropriate and entirely inaccurate. I am very much looking forward to talking more in Committee about procurement and why the Opposition are wrong again.

Photo of Bill Esterson Bill Esterson Shadow Minister (International Trade) 12:38 pm, 11th March 2021

The Government’s test and trace scheme, outsourced to companies such as Serco, has been one of the most scandalous wastes of public expenditure in living memory. It is quite difficult to imagine what £37 billion looks like, but here are some examples. In 2015, the Northumbria Specialist Emergency Care Hospital was constructed at a cost of around £75 million; £37 billion is enough money to build nearly 500 brand-new state-of-the-art hospitals. With around 670,000 nurses on the permanent NHS payroll, £37 billion is enough to give every single nurse a pay rise of not £3.50 a week but around £50,000. But instead, what did the Chancellor, in his recent Budget, announce for nurses? Not even, actually, a pay rise of £3.50 a week, but, in real terms, a pay cut of about £5 a week.

It is a disgrace that this Government are so profligate with their cash that they will give £37 billion to private outsourcing giants, including Serco, and at the same time choose to take money away from our nurses with that real-terms pay cut. Of course, if that £37 billion had kept people safe—if it had worked—that huge sum of money might have represented value for money. Yet as the National Audit Office said:

“The Department of Health & Social Care justified the scale of investment…on the basis that an effective test and trace system would help avoid a second national lockdown;
but since its creation we have had two more lockdowns.”

The ineffectiveness of the outsourced test and trace system is one of the reasons the UK has experienced the worst death rate of any major country. Yesterday, Serco’s top two executives, one of whom is the brother of a Conservative MP, received £7.4 million each in pay, including bonuses worth about £5.5 million. The company has previously handed out over £17 million in dividends to shareholders while reaping the rewards of its role in the grossly wasteful and ineffective test and trace programme. Today we read that the Business Department has invited Serco bosses, among others, to apply for new year’s honours. We now have a Government all too happy to waste billions of pounds on dodgy contracts for companies with Conservative party links, and when the scheme invariably fails, they give the people responsible a title as a consolation prize, all the while starving our public sector of funding and our public sector workers of pay.

After £37 billion, no test and trace, and the failure to prevent the second and third lockdowns, Ministers and those profiteering from this say it was a success. The National Audit Office says that there is no evidence of effectiveness. England has had the worst death rate in Europe. Other countries were able to balance value for money with support for the public’s health and the economy. If other countries can do better, the Government at Westminster can and must do better too.

All this is to say nothing of the disastrous PPE contracts. PPE Medpro was incorporated on 12 May. Just 44 days later, it was awarded a contract worth £122 million for single-use medical robes, which it intended to import. The contract was not advertised, but the company had links to the Conservative party and a Conservative peer. In contrast, my constituents who own Florence Roby Ltd, a uniform supplier with a track record of more than 50 years’ trading, spent months trying to get a contract for medical robes but were given the runaround and eventually had to lay off staff. I am afraid that these examples illustrate perfectly everything that has been wrong with procurement during this crisis: wastefulness and poor value for money. No wonder so many people think this is corrupt.

Compare this with the situation in Wales, where decisions on PPE are devolved. Since the outset of the pandemic, well over 450 million items of PPE have been distributed in Wales, and the vast majority of the PPE issued has been directly sourced by NHS Wales Shared Services Partnership, with all contracts awarded subject to robust governance. That includes additional scrutiny from a finance governance group, and all contracts over £1 million are approved by the Welsh Government directly. The UK Health Secretary has said that urgency is the reason that the Conservatives paid billions of pounds to their mates for PPE contracts, but that does not excuse the fact that companies with connections to the Conservative party such as PPE Medpro—which, remember, was awarded a contract 44 days after incorporation—were 10 times more likely to win contracts than those without those contacts.

In Wales, with a Labour Government, the situation was just as urgent, but the oversight and accountability were in place. Instead of waste, we have seen local public health boards delivering effective contact tracing, without the scandalous payments that we have seen in England of up to £7,000 a day to consultants. The Westminster Government must be able to spend the money needed to address the public health emergencies of the pandemic—everybody agrees on that much—but they must also listen to the National Audit Office, put an end to the cronyism and put public health first. The day of reckoning will surely come for the gross negligence, waste and cronyism displayed by this Conservative Government.

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Armed Forces), Liberal Democrat Spokesperson (Defence), Liberal Democrat Spokesperson (Digital, Culture, Media and Sport) 12:45 pm, 11th March 2021

May I use this opportunity to personally thank the Financial Secretary to the Treasury, who has met the gaps in support all-party parliamentary group several times over the last few weeks? That was good of him, and it has been a constructive relationship with Opposition MPs.

That takes me to the first of two brief points that I want to make. Clearly my constituency is very different from other constituencies. It is vast, it is very far away, and we have particular challenges with distance, sparsity of population and even temperature. During the pandemic, my constituency has had particular problems to be dealt with. I understand, and indeed I support, the mechanism that we are debating, which is about getting the money to where it is needed at the right speed. It might be useful if the Government agreed to meet Opposition MPs such as myself slightly more often, to look at the overall package and how it is hitting or not hitting where it should.

I will give one example. I have said many times in the House that businesses involved in tourism and hospitality are fundamental to the economy of my constituency and, indeed, of all the highlands and islands. The package of support during the pandemic needs to be best tailored to ensuring that those businesses can be got off their knees and got going again once the pandemic starts to recede. It would be tragic if we lost any of those businesses during this time, because that would impoverish our tourism product, which people come from not only most of the UK but all over the world to see.

We need a tailored package for tourism and hospitality businesses, and I am happy to talk to the Government about that. There is a precedent. Last summer, the Chancellor of the Duchy of Lancaster came to my constituency, and, as he will agree, we had a constructive meeting with tourism businesses, which was helpful. I am quite open about this: I will work with a Minister of any political colour if it is for the betterment of my constituents and the economy of my constituency.

The second and final point I want to make is one that needs to be stressed. A lot of this money is going to the devolved institutions—the Welsh Assembly and the Scottish Government. I support the Secretary of State for Scotland’s plea that, when the pandemic is over, we look at what the Scottish Government have actually spent the money on. As other Members have said, this is not our money—it is public money; it is taxpayers’ money—and I want to be absolutely sure that it has been used in the most prudent fashion by the Scottish Government and has gone where it should have gone. I support the Scottish Secretary’s plea for some sort of audit, balance sheet or, if you like, profit and loss account to be produced at the end of this.

I have listened to the debate with the greatest of interest—there have been some very high-quality speeches—and I shall listen to the rest with great interest.

Photo of James Murray James Murray Shadow Financial Secretary (Treasury) 12:49 pm, 11th March 2021

With the leave of the House, I would like to respond briefly to the debate and pick up on some of the contributions. First, I would like to address a comment by Kevin Hollinrake, who seemed to claim that I was not in my place during his speech. I would like to reassure him that I have been listening carefully throughout in the virtual Chamber, but perhaps he was not here earlier when I began my contribution virtually.

My hon. Friend Dawn Butler made a powerful and important case about the link between trust and transparency and how important it is for us to take action in this place to reassert that link. She also set out how insulting the 1% pay rise—a real-terms pay cut—is to the nurses in our country. My hon. Friend Bill Esterson mentioned the huge waste that has happened through Test and Trace and the private outsourcing giants that have benefited from that money. It is telling that no Conservative Members today addressed Test and Trace and the spending on that programme, as far as I could tell. I found it curious, however, that Anthony Browne, when trying to make a case around value for money, chose to focus on the time that Boris Johnson spent in City Hall, given that one of the most notable achievements of that right hon. Member in that office was to oversee £46 million of public money being spent on a garden bridge that was never built.

As I made clear in my opening remarks, we will not be opposing the Bill’s Second Reading, but in the Committee debate that follows, I will set out how our new clause aims to introduce a new standard of transparency, which we believe is urgently needed after the Government’s approach over the last year.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury 12:51 pm, 11th March 2021

I will not detain the House for long. By leave of the House, let me just say a couple of words. I thank all Members who have spoken so far. I thank James Murray for the Opposition’s support for this, but I think he was mistaken in relation to my hon. Friend Kevin Hollinrake, who was making a point about the absence of any person on the Labour Front Bench during the debate. That has largely been a characteristic of this debate so far, and that is a pity. I thank Jamie Stone for his recognition of the way in which I and colleagues at the Treasury have leant into the difficult issues he raised in relation to the excluded. That does not bear directly on this debate, but the wider point he makes is welcome.

I am mindful that this debate has featured several contributions from Labour Members that have resolutely failed to engage with the substance of the Bill under discussion, and that is a particular shame. This is a party that talks about proper accountability but simply finds it impossible to exercise that accountability in the Chamber by asking the Minister questions. I hope that hon. Members will do that in the next stage of the debate, so that we can have a proper discussion about this. They have, after all, just had a long period of debate on the Budget in which any of the points they wished to raise—irrelevant to the Contingencies Fund Bill but relevant to that topic—could have been discussed. Instead, they have indulged in cheap and irrelevant political posturing, and that is a particular shame—all the more so as their contributions have had the effect of delaying an important and much needed debate in this House called by the Backbench Business Committee on International Women’s Day.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).