Covid-19: Purchasing Effort

With permission, Mr Deputy Speaker, I will update the House on our purchasing efforts in response to the covid-19 pandemic.

A little over two years ago, we and the whole world found ourselves in unprecedented circumstances. We were faced with a virus about which we knew very little, but we knew from day one that our absolute priority was to save lives and protect our most vulnerable. Throughout the pandemic we have worked night and day to make sure those performing heroics on the frontline have the protection they need. This includes making the tough but necessary decisions needed to keep the country safe.

With the pandemic pushing health systems across the world to breaking point, we acted quickly and decisively to protect the NHS and to help it continue providing world-class care to the public. In a highly competitive global market, and with many countries imposing export bans, we were none the less able to secure the personal protective equipment needed. We secured billions of items of PPE, we obtained 30,000 ventilators by the end of June 2020 and we delivered more than 17.5 billion items to protect our frontline workers.

The supply of these vital items helped to keep the NHS open throughout the pandemic, but the scale of the challenge we faced in sourcing them should not be underestimated. The unique and unprecedented situation during the early days of the pandemic led to huge inflation in prices and intense global competition to secure scarce supplies. For instance, the average cost of nitrile gloves increased over sixfold at the height of the pandemic, compared with pre-pandemic levels.

At that time of national emergency, when lives were on the line, we simply had to change our approach to procurement and our appetite for risk. We had to balance the risk of contracts not performing and supplies being priced at a premium against the risk to the health of frontline workers, the NHS and the public if we failed to get the PPE we so desperately needed.

We make no apology for procuring PPE at the pace and volume we did, based on the information we had at the time. The action we took protected thousands of frontline healthcare workers in the NHS and social care. However, now that the world market for PPE has stabilised, the value of some categories of goods is inevitably much lower than the price at which they were originally purchased.

I reinforce to the House that 97% of the PPE we ordered was suitable and fit for use, with only a small proportion deemed unsuitable, and we are actively seeking to recover costs from suppliers wherever possible in those cases. Throughout the pandemic, the Department’s anti-fraud unit acted quickly to investigate all allegations of fraud, and we will be looking to recover any money for damaged or inadequate stock.

We are now in a position where we are confident that we have sufficient stock to cover all future covid-19-related demands, even in the face of the omicron variant. The PPE stocks we secured allowed us to meet demand through 2020-21 and 2021-22, and our existing PPE stocks will continue to support us throughout 2022-23.

We will keep working to maximise value from our stockpile, as the high standards of protection we have set for NHS workers mean that some of it may be able to be used in alternative settings. The Department has set up a redistribution team to identify alternative uses for stock that we do not intend or expect to use. For example, we are donating masks to both the Department for Transport and the Department for Education to aid compliance with face covering requirements on public transport and to support schools following their reopening in March 2021.

Medical professionals in my Department have also been working closely with colleagues in medical surveillance authorities to review stock that has exceeded its manufacturers’ use-by date but is not necessarily unusable. We have also begun a tender for a third-party medical laboratory to provide official testing of PPE products, with a view to extending their shelf life.

During the pandemic, we have taken steps to strengthen this country’s PPE supply chain, including manufacturing more PPE here in the UK. We have now signed contacts with more than 30 UK-based companies, reducing our reliance on manufacturers overseas, and we now have high confidence that we have sufficient stock to cover all future covid-19-related demands.

Getting PPE to those who need it has been one of the toughest logistical tasks of the pandemic. We make no apologies for taking the steps that were necessary so that we could save lives and protect this country in its time of need.

I commend this statement to the House.

I thank the Minister for advance sight of the statement. But what a disgrace that the Secretary of State did not come to the House today, to account for the inexcusable and unacceptable level of waste in his Department, or when the Department first published the accounts, or two days afterwards, when they were reported on the front pages of several newspapers and on broadcast news. Perhaps the Secretary of State’s silence and absence tell us that he is relaxed about losing billions of pounds of taxpayers’ money, or perhaps it is simply that he is too ashamed to show his face. He had to be dragged to the House and when he was, he bottled it and sent his deputy.

The Department of Health and Social Care snuck out its annual accounts on the final day on which they were legally required, 10 months after the end of the financial year, and, I am sure by total coincidence, at 5.30 pm on the day Sue Gray published her update. Buried on page 199 was the revelation that the Department lost a staggering £8.7 billion on PPE. That is more than two thirds of the Department’s total spend on PPE written off as losses, double the amount it is spending on the hospital building programme, and almost as much as we spend on the salaries of every nurse in England for an entire year. Why? Because the PPE was unusable, going out of date, and bought in at eye-watering prices because the Government were in a state of desperation having run down our supplies before the pandemic arrived.

We know that many Conservative Members privately—sometimes even publicly—agree with Labour that the national insurance rise is an unfair hit on working families facing a cost of living crisis. How will they explain to their voters that, taken together with the £4.3 billion they handed out to fraudsters, this Government have thrown away more than a year’s receipts of the national insurance rise that they are now imposing on working families?

It is always a pleasure to appear opposite the shadow Secretary of State. I will not take it as a personal affront that he would prefer it to be the Secretary of State rather than me.

The hon. Gentleman raised a number of important points. He cited Mrs Thatcher, and suggested that the Government had changed their position. If we are talking about sudden changes in position, I feel that I should quote the present shadow Chancellor, the hon. Member for Leeds West (Rachel Reeves)—formerly shadow Chancellor of the Duchy of Lancaster—who, in April 2020, wrote to my right hon. Friend the Chancellor of the Duchy of Lancaster:

“We need Government to strain every sinew and utilise untapped resources in UK manufacturing, to deliver essential equipment to frontline workers. This must be a national effort which leaves no stone unturned.”

She was right. I agreed with her sentiment then, and I still do—and we did do that—but it appears that the Opposition do not agree with it any more.

Let me turn to the hon. Gentleman’s other points. He kept suggesting—it makes a good headline for him, I am sure, but sadly I fear it is simply inaccurate—that this is money lost or wasted. It is not. As the hon. Gentleman knows from his days as a shadow Treasury Minister, this is a reflection of buying PPE at the height of the market, at the height of a global pandemic—

Why? Were there not enough masks?

I will come to that point in a moment. It is a reflection of that, and now, in accounting terms, a reflection of what its value is today.

The hon. Gentleman should also be aware that the vast bulk of that £8.7 billion is down to exactly the same reason: PPE purchased at the height of the market. Now that we have a stable market, we have a sustainable supply. I make no apologies, and I know that my right hon. and hon. Friends will make no apologies, for doing exactly what the shadow Chancellor said we should do, which was to strain every sinew to make sure that the NHS had the PPE that it needed. We achieved that.

She did not say “by giving a contract to a pub landlord”.

That is an important point, and I will turn to it in just a second.

The hon. Gentleman was also wrong to say that the money was thrown away. He knows that that is not what has happened here. He knows that this is about stock that has been written down in value, not written off. He knows that the vast bulk of that remaining is fit for use. We set very high standards in the NHS, but it is fit for use in other settings, and we are ensuring that we explore those other avenues, so that it can be used.

The hon. Gentleman talked about pub landlords. He will have heard my right hon. Friend the Member for West Suffolk (Matt Hancock) make this point in the Chamber. No contract was awarded to that individual, so I would caution him to be a little bit careful about the allegations he makes, and to check his facts before he does so.

Let me now turn to one of the broader themes raised by the hon. Gentleman. He talked about running down PPE stocks. Can he name any country in Europe that did not also have to buy vast amounts of PPE at the height of the pandemic, at the height of the market? This pandemic was unprecedented. We learned more about it with every day that passed. When we first started purchasing PPE, we were confronted with horrific pictures from hospitals in Bergamo in Italy. We saw the challenges that were faced, and we moved fast to ensure that our frontline had what it needed. We strained every sinew, and we got the PPE that our country needed.

Does my right hon. Friend agree that the revaluation of the stock simply reflects global market price fluctuations? Will he confirm that the PPE is being used? Will he also disregard the comments from Opposition Members, who are peddling known inaccuracies and whose comments on the finances show them to be utterly economically illiterate?

My hon. Friend puts it even better than I could have done. He is absolutely right to emphasise that this is a reflection of our straining every sinew to buy what we needed at the height of the pandemic, with inflated global prices, to give our NHS workers the protection that they needed. The global market has now returned to normal levels, and that, coupled with the fact that we have helped to stimulate and build a UK manufacturing base for PPE in this country, is a simple fact of economics. The shadow Secretary of State, who I think was formerly a shadow Exchequer Secretary, should know that. Sadly, the fact that that is not reflected in his comments, for whatever reason, causes me to question how much the Labour party has really learned about how to manage our nation’s finances and economy.

I thank the Minister for advance sight of his statement. Yet again, this Government are set rigid on making the working poor pay for their ineptitude and mismanagement. We know that £4.3 billion has been wasted, written off as covid loan fraud. We know that the Government spent £12 billion on PPE in England up to March 2021, of which £9 billion has been declared by the Government themselves as “wasted”—[Interruption.] We have some chuntering from those in a sedentary position, but I will continue.

Does the Minister believe that wasting all that money spent on PPE is a sign of good governance, when £2 of every £3 spent on VIP lane contracts was wasted due to so-called errors in supply? Now hard-working people will be taxed £12 billion by this Government to pay for their mismanagement, when the Bank of England has just told us that UK households must be warned to “brace themselves” for the biggest annual fall in living standards in 30 years, since records began, and inflation is set to soar to 7%. Why is his Government not vigorously pursuing companies that provided £9 billion-worth of useless PPE equipment to ensure that they pay it back? Will he assure the House that his Government will pursue that with complete vigour?

Kleptocracy is defined as a situation where politicians enrich themselves or their associates through the funnelling of public money and assets to their connections outside the rule of law—a statement we know all too well in this House. Given that the UK Government’s VIP, Tory crony fast lanes for Tory party associates have been declared unlawful in the Court of Session and seen billions of pounds wastefully funnelled to politically connected friends of this Tory Government, does the Minister agree that his Government are fast becoming a kleptocracy?

In general, and certainly after that contribution, I will take no lessons in financial illiteracy from the SNP. The hon. Gentleman regularly, in that contribution, referred to £8.7 billion or £9 billion—rounding, if he wishes to—as wasted. He will know that, as I have set out, it is not wasted. It is a write-down on the value of stock, but it is not wasted. That stock is available. That is the point I make to him. The vast majority of that stock is available and in warehouses. This is an accounting point about the value of what was paid at the time compared with its value in a recovered market.

I will pick up one point I missed with the shadow Secretary of State, who I hope will forgive me. He mentioned ventilators, and I apologise for not answering that point. In the case of ventilators, we followed the scientific advice at the time, which was that ventilators were the most effective way of treating those who were severely ill. Thankfully, due to amazing advances by our clinicians and scientists and to the action taken by this Government, we did not need them and the treatments available improved significantly. Again, I make no apologies for our being prepared for all eventualities.

To conclude on the contribution of the hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar), I reiterate the same thing: we make no apologies for having strained every sinew—in a global pandemic, at the height of the market, when some countries were imposing export bans—to purchase the PPE to protect our frontline workers. I also pay tribute to the officials who worked flat out, often through the night, sourcing the PPE. They were the ones assessing it, and they were rigorous in their assessments. I put on record my tribute and my gratitude—

I think the hon. Gentleman nodded assent, so we may be in agreement on that point. I put on record my tribute and my gratitude to them for all their hard work to protect the frontline.

In reality, back at the beginning of the pandemic, the Opposition were calling for the Government to go faster. It seems to me that one of the great success stories of this Government is that they got the PPE and the ventilators and, by doing so, saved a lot of lives. Does the excellent Minister agree that, unfortunately, the rhetoric coming from the Opposition now is completely different from what it was at the time of the pandemic?

I am grateful to my hon. Friend. Far be it from me to suggest that hindsight characterises the approach adopted by Opposition Front Benchers, but he is absolutely right. I mentioned the shadow Chancellor, the hon. Member for Leeds West (Rachel Reeves). She also said in this place:

“Those who look after the sick and the vulnerable deserve our protection, and getting PPE to them is the priority of all of us.”—[Official Report, 4 May 2020; Vol. 675, c. 412.]

She was absolutely right and remains right, and that is why this Government did exactly that. Protecting the taxpayers’ pound is hugely important. Equally, so too is procuring the kit that protects lives. In the unique circumstances that we faced at the time in 2020, I believe that this Government made the right choices.

For context, £9 billion would have given every NHS nurse a 100% bonus on their salary or it could provide the funding needed to solve the issue of autistic people and people with learning disabilities being detained in inappropriate units because no funding is available to support them in the community. Instead, it is clear that large amounts were wasted on unused and unsuitable PPE, some of which, we understand, will have to be burned. I remind the Minister that we could have had a stockpile of PPE in this country if Exercise Cygnus in 2016 had been handled responsibly. Exercise Cygnus showed gaping holes in our emergency preparedness and we have to learn the lesson from that.