UK BANK BAILOUT SHOULD CUT SCOTTISH PFI DEBT.
SNP MSP Jamie Hepburn has written to the Treasury enquiring as to whether Treasury ownership of the banks will lead to improved terms for PFI contracts between public bodies and those banks in which the UK Government now owns shares.
Mr Hepburn raised his query after identifying PPP and PFI contracts in Scotland held by HBOS and Royal Bank of Scotland. Mr Hepburn said:
“With the government now a majority shareholder in banks we will see public money taken from frontline services to pay PFI debts that will then be used either to buy the banks back out of public ownership or taken back by the Treasury in dividends. “
We are already seeing plans to cut public spending to help meet the cost of bailing out the banks and to cut the UK’s national debt – debts that do not include the high repayments owed for PFI deals.
Surely the banks could put something back by cutting the public sector’s PFI payments.
“There must be benefit for tax payers from the billions invested in our banking system. With UK PFI debts now reaching £216 billion trying to reduce the burden on the taxpayer through negotiating improved terms for PFI payments could be one such benefit. “
The treasury’s rules created PFI as the only option for capital investment. Now public bodies are looking at mounting repayments to clear their PFI debts and budget cuts to bail out the banks.
“PFI was used so the banks took the risk on the investment not the Government. With banks now in Government ownership taxpayers are paying themselves for taking the risk with banks taking all the benefit. It is a ridiculous situation. “
I will be exploring this issue further and I look forward to hearing from the Treasury as to how they will use their shareholdings in the banks to reduce the PFI debts.”
SNP MSP Jamie Hepburn has written to the Treasury enquiring as to whether Treasury ownership of the banks will lead to improved terms for PFI contracts between public bodies and those banks in which the UK Government now owns shares.
Mr Hepburn raised his query after identifying PPP and PFI contracts in Scotland held by HBOS and Royal Bank of Scotland. Mr Hepburn said:
“With the government now a majority shareholder in banks we will see public money taken from frontline services to pay PFI debts that will then be used either to buy the banks back out of public ownership or taken back by the Treasury in dividends. “
We are already seeing plans to cut public spending to help meet the cost of bailing out the banks and to cut the UK’s national debt – debts that do not include the high repayments owed for PFI deals.
Surely the banks could put something back by cutting the public sector’s PFI payments.
“There must be benefit for tax payers from the billions invested in our banking system. With UK PFI debts now reaching £216 billion trying to reduce the burden on the taxpayer through negotiating improved terms for PFI payments could be one such benefit. “
The treasury’s rules created PFI as the only option for capital investment. Now public bodies are looking at mounting repayments to clear their PFI debts and budget cuts to bail out the banks.
“PFI was used so the banks took the risk on the investment not the Government. With banks now in Government ownership taxpayers are paying themselves for taking the risk with banks taking all the benefit. It is a ridiculous situation. “
I will be exploring this issue further and I look forward to hearing from the Treasury as to how they will use their shareholdings in the banks to reduce the PFI debts.”
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