PFI was a "Faustian Pact and there's no get-out clause.

LeftFootFoward the Labour supporting Blog has unsurprisingly come up with the headline

Labour should be applauded for finally addressing their £300bn PFI scandal,

As  John McDonnell announced yesterday that a Labour government would bring PFI contracts back under public ownership. The policy championed by Blair has already cost British taxpayers £100bn, mostly in interest payments.

As the Guardian  explains 

"PFI contracts typically involve both the construction or refurbishment of a physical asset such as a hospital, and the provision of maintenance (and sometimes other) services over an extended period – typically 30 to 40 years in the NHS. Including services in the contract was primarily a way of keeping the borrowing for construction costs off the government’s balance sheet. This famously allowed New Labour to invest heavily in infrastructure without affecting public borrowing figures, at the cost of higher financing costs over the long term and of locking providers into very long-term relationships with contractors for the provision of services. PFI service provision has been a major source of discontent in the health service (as in the stories of NHS trusts being forced to pay extortionate charges for the changing of a lightbulb)".

And introduces  a degree of skepticism

"Taking some of these maintenance services back in-house would be a different matter to taking over the ownership of the physical assets. The capital value of existing and planned PFIs is some £59.4bn (although some of this has already been paid off by the public sector) and the contracts are structured to protect investors. It is unlikely that government would save any money by taking them into public ownership and it might well wind up out of pocket due to penalty clauses. Taking back services that have to be paid for anyway might (I stress might) actually save money. And of course it would be popular with public-sector workers, a key part of Labour’s constituency".

Former Liberal Democrat AM Peter Black writes 

I happen to agree with the paper that if Labour are talking about taking back some of the revenue costs of PFI contracts back -in house then that may be worthwhile doing and could save money. Taking the assets back into public ownership however may prove too expensive, especially as there may well be penalty clauses.
But wait, what is this nasty Tory policy that Labour are determined to destroy? Well, actually it was largely brought in by the Labour Party itself. Over on Facebook, the former Lib Dem MP for Torbay , Adrian Sanders reminded me of some of the history.
He points out that the very first bill put forward by the Blair government in 1997 was tthe NHS (PFI) Bill:
I quote Tory MP John Maples: “The Lib Dem amendments seem that if they were agreed to they would kill PFI stone dead” (Hansard 14th July 1997) 
And Labour MP Alan Milburn: “The Lib Dem amendment would prevent any transfer of services under PFI” (Hansard again) 
Now here’s a biggie…. Anyone want to guess the name of a current senior MP who voted for the NHS (PFI Bill) at every opportunity? 
You guessed it right. Jeremy Corbyn didn’t say a word against Health PFI in 1997 and voted for it at every chance. 
So it wasn't just a New Labour/centrist plot. Even 'Mr Rebellion' himself voted for PFI in health care at every chance. Only the Lib Dems opposed it.

Not sure about the last sentence  as I beleive Plaid and the SNP  also opposed PFI as 

 Plaid Cymru Treasury spokesman Jonathan Edwards said in 2012:

 “In the 2009-10 period when the UK tax take dropped considerably £11bn was written off by the UK Government – much of it involving global companies avoiding their tax responsibilities.“Perhaps more shocking is the real cost of PFI at four times the actual value of the assets. PFI is a financial trick which Plaid Cymru saw through under which financial magicians in the City made public money disappear.“Fortunately, Wales has relatively few PFI liabilities, but we must make sure that we get our fair share of spending in future to make up for this smaller spend on PFI.”

Should we  blame ordinary backbench MPs like Corbyn at the time who did not see through the build now pay later scheme.

Well I suppose it was difficult for those who wanted to see a boost in infrastructure particularly in the NHS  to question the   Faustian Pact the Tories under Major made first but expanded under Blair .

The problem with Faustian Pacts is that it is after all with the Devil there is no way out not even appealing to higher deity.



Whether Faust's descendants should also pay for his deal , may be open to question.

But maybe its too soon for Labour to absolve itself from the consequences of agreeing to PFI particularly those like Corbyn who was there at the time.