Co-written by Cigpapers and Watt Tyler
The Private Finance Initiative (PFI) Fraud
Following the unexpected death of John Smith QC MP Labour Party Leader in 1994 Tony Blair and his New Labour cronies took over the Labour Party and committed the PFI fraud.
The PFI fraud committed by New Labour was probably the greatest financial crime ever. It is believed the real mastermind was Lord Michael Levy who, although he is nominally Blair’s fund-raiser, is probably really his boss.
During the late 1990s and through the 2000s New Labour and Gordon Brown signed an unknown total of £billions worth of PFI deals with the banks and private sector. The figures released by the Government claim that in 2013 we pay around £9billion per year. The total cost left for us and our descendants to pay is around £301 billion – about £5,000 for every man, woman and child in the Country. It has been claimed, by Michael Meacher Labour MP, that about one fifth or Britain’s GDP for the next 50 years will go on paying off the PFI fraud.
What are PFI deals?
PFI deals are where the Government wants a building such as a school or hospital building, and don’t want to finance through normal Government means at low-interest rates . They effectively get a hire purchase deal on the building from banks or private companies and pay over 20 to 50 years, often with maintenance included at much higher interest rates. These deals always cost more than usual Government finance and maintenance, sometimes two or three times as much.
Why PFI deals?
New Labour and Gordon Brown first claimed that PFIs were the fastest way to build Government buildings as a socialist/pinko cover story. When this was exposed as obvious rubbish Gordon Brown incredibly claimed that they signed these deals to “hide” Government borrowing from the financial markets, and these expensive PFI deals wouldn’t be counted by City financiers as Public Debt. To anyone connected to the real World this is obvious nonsense as any half decent financier would be well aware of these PFI deals and would calculate them in as Public Debt.
Really why PFI deals?
New Labour had the age-old problem of transferring huge amounts of Public Spending in to the bank accounts of corrupt Politicians. They went with the PFI fraud as it sounded very Labour to build schools and hospitals to the Public. Anyone questioning the PFI deals was attacked for opposing new hospitals, schools etc. The PFI fraud also had the spin-off benefit that the City of London laughably claimed Gordon Brown as financially competent, as he helped them siphon off hundreds of £billions of Public money. As usual our corrupt Politicians get their pay-offs in the form of consultancy fees when they leave Office. Some 24 former New Labour ministers – including Charles Clarke, Patricia Hewitt, Frank Field, Alan Milburn and David Blunkett – are heavily involved in the PFI industry and are now mostly multi-millionaires.
But Surely All These PFI Deals Are Examined By Accountants?
These deals all have to be signed off by one of the “Big Five” accountancy firms as “Value for Public Money”. However the PFI accountancy work is worth hundreds of millions of pounds, and further work only goes to compliant firms. Many senior accountancy partners walked away with tens of millions of pounds of Taxpayer’s money in fees.
The massive Arthur Andersen accountancy firm wrote a report in January 2000 praising PFI and claiming it led to 17 percent savings. It went on to be involved in £10s of billion of PFI deals. As former Labour deputy prime minister Roy Hattersley points out, “Arthur Andersen’s timing was impeccable. The PFI report was published at the moment when the government wanted both to hold down public expenditure and demonstrate its faith in private enterprise.” The Arthur Andersen report is virtually the only one ever to claim PFI is efficient. When Blair came under pressure over his links to Andersen, he referred in Parliament to a report by PricewaterhouseCoopers, another of the ‘big five’ auditing multinationals.
But PricewaterhouseCoopers has also benefited from the PFI scam. It is part of PFI deals worth £10s of billions. It is also the administrator of the European arm of Enron, and did some valuation work on two of the ‘partnerships’ set up by Enron executives to hide its losses.
Was this a victimless crime?
Hardly. Right across the Country the NHS, Councils and other areas of Government have had to make severe cut-backs to pay for the PFI fraud. These cut-backs can include new schools and hospitals, building repairs, meals for the disabled, after Schools Clubs for disadvantaged Children, fewer Police, fewer Teachers and cutting back on NHS Staff.
How about the criminals?
Blair and Mandelson are quite open about being corrupt and flaunt their wealth. Mandelson bought a multi-million pound house for cash as soon as he left Office and Blair is well on his way to becoming a billionaire. Brown has the problem of when to break cover and buy the first big house, and as usual is dithering. The Milibands are just starting to pick up their first few £millions in consultancy fees.
How about the Victims?
That’s us Joe Public. We’ll all moan about it, but we’ll let our Families and descendants do with less to pay off the PFI fraud rather than do anything about it.
Is the PFI fraud linked to the Bilderberg Group?
All the major New Labour criminals are regular Bilderberg Group attendees where they receive their instructions regarding Globalisation and multiculturalism, so it’s not inconceivable they got their instructions for the PFI fraud there.
John Smith QC MP was a Scottish politician who served as leader of the Labour Party from 1992 until his sudden and unexpected death from a heart attack in 1994.
As with all unexpected deaths of prominent politicians such as that of Robin Cook Labour MP, there was some speculation at the time that his death was suspicious, but there was no apparent specific motive. Robin Cook Labour MP had been a thorn in Blair’s side with awkward questions about the Iraq War, PFI and Al Qaeda’s existence.
However, events since the coming to power of New Labour in 1997 and their PFI fraud, present a much clearer reason why John Smith might have been murdered.
John Smith QC MP would never have been part of the PFI fraud and he was in the way of some very ruthless greedy people.
John Smith’s death was certainly convenient for some people. Suspiciously convenient.
Popular, straight talking Manchester Chief Constable Michael Todd died of a heart attack in unexplained circumstances in March 2008 after starting investigations in to several PFI deals in Manchester. He was soon replaced by Peter Fahy, a Common Purpose graduate and New Labour supporter. The Manchester PFI investigations have not been continued.
Dr David Kelly died in suspicious circumstances in 2003. The authorities claimed he had an abnormal heart condition. Dr Kelly was nothing to do with the PFI fraud, but had crossed Blair over the Iraq War. Is there a pattern here?
In July 2012 Michael Meacher Labour MP wrote this article on PFIs:
In Ancient Egypt we are told there were 7 fat years, then 7 thin years. Not much has changed. For a decade we had the arrogant swagger of the New Labour hegemony seemingly carrying all before it, but actually pitted with lies (the Iraq war), deceit (the ubiquitous culture of spin), prostration before power (Blair’s cuddling up to Murdoch), adulation of the City (regulation-lite leading to the Great Crash and today’s interest-rate fixing), worship of wealth (Mandelson’s immortal “New Labour intensely relaxed about people becoming filthy rich”). And now another colossal Tory-New Labour scam – PFI – is coming home to roost, big time. The collapse of the South London Healthcare NHS Trust is just the harbinger of a whole cascade of hugely costly failures coming home to roost.
Under pressure from New Labour this Trust signed up to a £2.5bn PFI deal which it now costs £61m a year to service, no less than 14.4% of its annual income. In the case of one of its hospitals, the Queen Elizabeth Hospital in Woolwich this PFI levy on its income will last for another 18 years, and in the case of another, the Princess Royal Hospital in Bromley, it will continue for the next 20 years. The hospital Trust is now losing £1m a week, and obviously the original deal was never sustainable.
PFI was started by the Tories in 1992 and hugely expanded by New Labour after 1997. In total it has now committed the public sector to pay back £301bn to banks, investors and private companies for more than 800 hospitals, schools and prisons projects by 2050. That is, New Labour has put the State in hock to the private sector to pay back a sum equal to one-fifth of Britain’s entire GDP within the next 50 years. What this means is that New Labour crippled the public sector with gargantuan unpayable debts for the next half century and now the Tories are eviscerating what’s left with further spending cuts of another £81bn.
This slow-moving catastrophe has come about for two mean reasons. One was the ideological prejudice of both New Labour and the Tories to privatise the State down to every last nook and cranny they could find. Second, New Labour (and over 90% of the expansion of PFI has occurred under their regime) wanted to establish their number with Big Business just as also with the City, media and security services (police and MI5), and a £300bn increase in corporate profits – at taxpayers expense of course – was very persuasive. Blair and Brown have a lot to answer for, even more than we yet know.
THE MONEY MADE FROM A SMALL SAMPLE OF PFI SCHEMES:
scheme / capital invested by companies / projected cash return
New Royal Infirmary, Edinburgh / £20m / £228m
County Hospital, Hereford / £9m / £92m
Hairmyres Hospital, East Kilbride / £8m / £145m
Council offices and car park, Perth / £2m / £31m
Eleven schools, Highland / £2m / £12m
James Watt College, Kilwinning / 0.7m / £9m
TOTAL / £42m / £517m
A recommended book to read on the PFI Fraud is Captive State : The Corporate Takeover Of Britain by George Monbiot. You can borrow it from your local library free of charge, or if you want to buy a copy they are available from Amazon on Kindle or from about £1.98 including UK delivery for a paperback or hardcover copy:
16 thoughts on “The Private Finance Initiative (PFI) Fraud by New Labour”
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