The enormous profits being racked up by Private Finance Initiative (PFI) companies should be subject to a new windfall tax, so much-needed resources can be put back into the UK’s cash-strapped public services, says UNISON today (Monday).
Such a tax could be introduced if two amendments to the Finance Bill, which have been tabled by Stella Creasy MP, achieve enough support during Wednesday’s House of Commons debate on the draft legislation.
UNISON believes a new windfall tax could prove a lifeline to under pressure public services. It would mean PFI firms are forced to pay back some of the billions of pounds they’ve been raking in at taxpayers’ expense, says UNISON.
Government cuts to spending have placed schools, hospitals and local councils in dire financial straits – a desperate situation made worse by the huge PFI loan repayments they’re locked into over many years, says the union.
When many PFI deals were signed by the Treasury corporation tax was 30%, but now it’s 19%. Cuts to the tax mean the PFI companies are making even more money than they thought they would, making the strong case for a windfall tax, UNISON believes.
UNISON general secretary Dave Prentis said: “Eye-wateringly high PFI payments are threatening to overwhelm our already cash-strapped public services.
“Local communities may now have shiny new schools and hospitals but at huge cost. The repayments on PFI debt have to be made first, and are so steep that teaching assistants are losing their jobs and patient services are being cut back.
“Meanwhile the shadowy PFI firms just keep on hitting the jackpot, making millions more than they’d ever hoped to because George Osborne slashed their tax bill a few years back.
“There’s no time to lose. Crippling PFI debts are pushing local services to the brink and costing taxpayers dear. It’s time for a windfall tax on the companies cashing in at our expense. It would bring some urgent and much-needed relief for the services we all rely upon.”
Notes to editors:
– Since 1992 PFI has been used to finance public sector projects. There are around 700 PFI projects in operation across the UK, involving schools, hospitals and prisons.
– The National Audit Office recently found that PFI contracts can make the costs of building projects up to 40% more expensive.