Labour says PFI will be 'brought back in-house'

McDonnell

McDonnell

In June's election, Labour found more support than expected among voters seeking change after seven-years of Conservative-led government, coming in second. He said that under the leadership of Jeremy Corbyn, Labour would sign no new PFI deals and would take current ones "in-house".

During his speech at the Labour Party conference in Brighton, shadow chancellor John McDonnell said: 'The scandal of PFI, launched by John Major, has resulted in huge, long-term costs for taxpayers while handing out enormous profits for some companies.

The contracts have been used for decades to fund public infrastructure project using private capital.

John Prescott backed shadow Chancellor John McDonnell's promise to bring back all existing PFI contracts in-house in an interview with ITV News Political Editor Robert Peston.

A former Labour minister who oversaw an explosion in controversial PFI contracts has said much of their use was a "major mistake" and they are "crucifying" the health system.

Infrastructure expert and Pinsent Masons partner Jonathan Hart said: "Given stated objectives of bringing contracts "back in house", almost all PFI contracts contain specific provisions to deal with early termination of contracts and payment of financial compensation in such circumstances".

Liz Jenkins, partner at law firm Clyde & Co, said the policy, although possible, would bring with it a "significant" rise in finance costs.

McDonnell also repeated pledges from Labour's popular 2017 election manifesto to nationalize industries like rail and water.

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"The Shadow Chancellor's vision of massive state intervention is the wrong plan at the wrong time".

The next Labour government will tackle the persistent debt spiral that many working families have become trapped in.

The scheme has proved controversial, with complaints from Labour and Conservative MPs over the years.

In a move that is bound to make them a lot of friends in the financial sector, the Labour Party has just announced plans for legislation that limits the amount of debt people have to pay on credit card debt.

"Proposals to nationalise key industries would put business investment in the deep freeze at precisely the time that it is needed the most", he said.

Starmer said: "I think our Brexit position has been applauded by businesses, by trade unions and by our party because it is rational".

"The Financial Conduct Authority in April proposed a set of less-radical measures to encourage companies to reduce the number of customers in persistent debt". That means people who have paid more in interest (and other charges) than they have paid of the initial amount borrowed over an 18 month period.

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