Public ownership of banks invested in PFI/PPP projects should mean an opportunity to negotiate better repayment deals.

SNP Conference this morning (18th April) gave its support to a resolution from SNP backbench MSP Jamie Hepburn and Glasgow North Candidate Patrick Grady which urged government owned banks to provide better and fairer terms for the repayment of PFI/PPP debt.

In years to come the Scottish Government will be making £1 billion of repayments to what are currently state owned banks – for public sector buildings.

In a letter to Mr Hepburn the UK Treasury made clear they would not seek a renegotiation of the debt as it was essential to the profitability of the banks.

Central Scotland MSP Mr Hepburn said: "PFI is officially dead.  New rules mean this off-balance sheet con is no more and the ridiculous situation of the UK Government bailing out PFI investors in England has exposed this scam for the mess that it is.

"The UK’s refusal to encourage banks to renegotiate the deals because public money is helping the Treasury turn a profit is the stuff of Alice in wonderland.

"As we face this economic downturn and show we’ve got what it takes to recover strongly from Labour’s recession this is the same economics of the madhouse that got the UK into this mess.

"In these extraordinary economic times, a bit of common sense should prevail and the Government should start negotiating a better terms for the PFI debts held by banks in which it is now the major shareholder.

SNP Candidate for Glasgow North Patrick Grady added: "The Scottish Government is investing more government money than ever before in capital projects across Scotland, including in Glasgow, to deliver jobs, investment and economic growth.

"The last thing we need is for funds that could be put into the frontline of public services or increase that capital investment even further going to prop up UK Government debts.

"This is a ridiculous state of affairs and as we show we’ve got what it takes to build infrastructure without saddling future generations of Scots with debts it’s time for the UK owned banks to renegotiate the debts Labour left us with."

Note:

The conference resolution as passed is below

PFI and Public Ownership of Banks

Conference notes the role of the Bank of Scotland and the Royal Bank of Scotland as Equity Investors in a range of PFI/PPP projects in Scotland, and that these banks have benefited from multi-billion pound recapitalisation finance provided by the UK Government.

Conference reiterates its opposition to PFI/PPP.

Conference believes the massive public stake in banks which hold PFI/PPP debt, owed by Government, Local Authorities and other parts of the public sector, serves only to highlight the ridiculous and expensive nature of PFI/PPP projects, and that it is now incumbent upon the banks to provide better and fairer terms for the repayment of this debt.

Conference calls on the UK Government, which is now a major shareholder in these banks, to negotiate better terms for the repayment of PFI debt as a matter of urgency.

PATRICK GRADY, ELECTED MEMBER
JAMIE HEPBURN MSP