JEREMY Corbyn has warned that Labour appear to be moving “heavily back” towards reintroducing PFIs.
In an exclusive interview with The National, the former Labour leader also said that everyone will “pay a huge price for it”.
“It's like doing a bad deal with a pawnbroker and never getting out of it,” he added.
It comes as Chancellor Rachel Reeves announced a £22 billion “black hole” in the UK’s finances yesterday, and outlined a series of sweeping cuts in an attempt to make it up.
Labour’s tight fiscal rules place strict limits on what the government can do, as they aim to have debt falling within five years and day-to-day spending covered by revenues.
With Labour making no secret of their intention to have private financial institutions bankroll infrastructure spending, many have indicated it could see the return of the private finance initiative (PFI) schemes used so heavily by the last UK Labour government – which sees private enterprise build and run major infrastructure projects and inherit them at the end.
But the taxpayer is still being made to foot the bill for those schemes today, something Corbyn is all too familiar with.
“Back in the day, when PFI was first proposed in 1994 or 1995 as Labour policy, there is a bit of TV footage of me standing outside my front door explaining to a TV journalist that PFI would cost us all a lot of money in the long run,” he said.
“It might give us the shiny new hospital, but will give us a debt that will go on forever.”
The Independent MP for Islington North outlined the case of Whittington Hospital in his constituency, which stopped making payments to its PFI company after a wrangle over fire safety and is now being sued for £56 million.
“We're now in a situation where PFI hospitals pay 15 per cent of their expenditure just in servicing PFIs,” he said.
“That's what happens when you allow the private sector to get a hold of public services.”
Corbyn also railed at Reeves’ new National Wealth fund, which looks to back private investment with public money.
“What Reeves has proposed is largely a public guarantee of private investment in infrastructure,” he said.
“It seems to me we're moving heavily back into the PFI direction. We're all going to pay a huge price for it.”
He added: “If you want to develop public infrastructure, then do it in the traditional way. Public works loans board, fixed rate of interest.
“You know what the lifetime of the project is, and you know what the cost of it is, and you keep control of it.”
