Corporations profiting from Private Finance Initiative (PFI) schemes have creamed millions from the NHS and Tory tax cuts are handing them even more.
PFI firms will make £190 million more in profits by 2020, according to analysis by the Centre for Health and the Public Interest.
That’s because former chancellor George Osborne and current chancellor Philip Hammond have slashed corporation tax from 28 percent in 2010 to 19 percent.
And firms could pay even less as the Tories push ahead with plans to slash the tax rate further still by next April.
At the same time the NHS faces a £35 billion funding gap, chronic staff and bed shortages and more cuts and privatisation.
The Centre found that more than 100 firms saved around £84 million between 2008 and 2015 due to corporation tax cuts. They are set to make another £106 million by 2020.
It said, “This is a huge increase in returns and a windfall.”
PFI schemes were a con trick set up by John Major’s Tory government and ballooned under Tony Blair’s New Labour.
Officially PFI was cheap way of building new schools and hospitals using private sector money.
In reality it helped the government cook the books. Borrowing would not show up because the money was raised by private companies that bought into PFI schemes.
But the NHS is forced to pay millions in rent and maintenance costs to PFI firms for years after hospitals are built. While the “capital value” of hospitals built using PFI is £12.4 billion, the NHS will pay £80.8 billion for using them.
Analysis earlier this year by the Centre showed that PFI companies raked in £831 million in profits during the last six years alone.
Labour MP Stella Creasy is calling for a special “windfall tax” on PFI companies’ profits. Of course PFI firms should be made to pay more, but Creasy’s windfall tax seeks to avoid upsetting the PFI bosses too much.
The Labour Party’s general election manifesto promised to raise corporation tax to 26 percent. But that’s still lower than under Tony Blair and Gordon Brown’s New Labour governments.
Corporations should be charged at a much higher rate.And PFI schemes should be scrapped without any compensation—the money should be used to fund the NHS.