ANY QUOTES USED MUST BE ATTRIBUTED TO SUNDAY WITH NIALL PATERSON, SKY NEWS

NIALL PATERSON: Construction giant Carillion went under this week with a pensions deficit which could be as high as £8 billion. Today the Prime Minister has pledged to fine company executives who put pensions at risk. Joining me now is the Chairman of the Work and Pensions Select Committee, Frank Field. Mr Field, a very good morning to you. Mr Field, just speaking generally about the Carillion and PFI situation for a moment, I mean it’s clear that many people have benefited from the infrastructure that PFI contracts have bought but on the balance, has it all been worth it?

FRANK FIELD: Well clearly many people have benefited, we have had new hospitals and new schools which we may not have had but for example in the area where I represent in the Wirral, the contracts were 18.3% plus management charges and when I asked the Chief Executive, are you going to sign this contract and what are the management charges, he said he didn’t know and he signed the contracts. When we repaid the monies over 20 years, we won’t own the schools so there is a huge downside. Clearly we’ve benefited, clearly people have and are making large sums of money out of these contracts.

NP: The argument which seems to be being made at the moment, and actually it is backed up by statistics from the National Audit Office, that it would have been cheaper, always would have been cheaper for the government simply to borrow the money so why didn’t we do that?

FRANK FIELD: Well it’s an accounting procedure isn’t it? I went to see Gordon Brown when our schools were going to be subjected to PFI and begged him really, would he not actually allow the local authority to issue bonds? In those days it wouldn’t have been 18.3% plus charges, it would have been a maximum of 5% and I would have thought in those circumstances pensioners would have been stampeding the Town Hall to get a return on their savings of that amount and they would have had ownership. It would actually help to knit a town together, people feeling that I’m contributing to the rebuilding of our town, but as you know that was not government policy. To keep these sums off the balance sheet, Gordon went down the PFI route.

NP: In terms of the collapse of Carillion, shouldn’t someone have noticed that things were going badly wrong. I mean the market cap went from a billion to less than a hundred million in a matter of months, the government’s line has always been look, we’re a customer and not a manager of Carillion.

FRANK FIELD: Well certainly the government should have known something shouldn’t they, with a company supposedly of this value but certainly of this size. Certainly the Pensions Regulator on the pensions side should have been interested but above all, and I think that’s where our committee will be looking at with great interest, are the auditors, KPMG. What were they doing signing off a company which within a very short period of time hit the buffers? Now the signing off of that meant the company could go on trading, there was no orderly wind down, the government issued a billion pounds of contracts to them following that. What’s their link, what’s their role both in supporting companies and in the structure of the companies, the personnel of companies because who has the say in the non-executive directors, which ones go on to the remuneration board, which ones decide who the auditors – both internal and external – are? Those are at least an immediate start for our Select Committee but it would be just jolly nice of course if the government had paid attention to our previous report. We are still waiting, I’ve lost time when we actually reported to the House and thereby to the government, where we said that there were some key changes the government should make to protect pensions.

NP: One of them it appears to be taken forward by Theresa May is the idea that directors should face not just punitive fines but super-heavy fines at some point. How does that affect the behaviour of those running these organisations, do you think?

FRANK FIELD: Well one would hope of course that one wouldn’t have to levy the fines, the mere fact that they’re there and that we would have a Pension Regulator who really just puts the fear of God into people to behave properly if they can’t behave properly in any other way so looking back to BHS, we proposed two to three times the deficit could be the fines. So Sir Philip Green would have faced a fine of a billion pounds. Now I would have thought that given that these fines would be levied on the individuals not on the companies, with the aim of actually stripping out people’s personal wealth, people who have gained so much and behaved so poorly in the stewardship of their country (sic), this would help to concentrate minds wonderfully. Also of course we propose that the Pensions Regulator, one that is really proactive and watching the market, which doesn’t seem to have actually happened here, would be able to veto any transfer of company.

NP: Well we are getting used to an awful lot more cross-pollination of ideas between the parties in the House of Commons these days so we’ll see if any of those are taken forward. I wonder if we might turn to Brexit. As I mentioned in the introduction to you, you were one of the more leading figures on the Leave side, are you happy, are you content with the progress that is being made? It certainly seems that things might be coming to a juddering halt just as soon as this process reaches the House of Lords.

FRANK FIELD: Well I’m obviously pleased the Bill is through. If you look at those who voted for the single market and the customs union, you can see on both sides of the House of Commons those who are committed not to carry out the decision of the people in the referendum. Now during the passing of this Bill it seemed extraordinary to some of us that the government hadn’t got a Plan B, so if the negotiations go phut – and we hope they are a success – but if we have to crash out what are the preparations for that crashing out? It was then turned into a mega-story, the government thinks it’s going to fail in its negotiations. I’m hoping now the government will plan or have a Plan B already in place if those Lords who talk openly about thwarting the will of the people – the House of Commons at least is elected, the Lords are not elected – are wrecking the Referendum Bill so accompanying the entry of the Bill into the House of Lords, the Prime Minister also introduces the reform and the abolition of the House of Lords as we know it.

NP: So the Sword of Damocles hanging over their head is if you oppose Brexit you will no longer have a job.

FRANK FIELD: Well one of the fall outs from Brexit will be that we’ll have some mega-changes and I think really important beneficial changes. One would be surely at long last a reform of the House of Lords. Why not actually see these two things running together so that we have a much smaller House of Lords that is elected, not in the way by the party system as we have now but it will represent the main interests of the country, whether it’s within arts, within culture, within the professions, within medicine, within trade unions, within businesses, that would be a small working House of Lords which would have the right to reject proposals but only once, therefore they would be doing both the their job of advising but also revising. That would give us, again the government would be on the front foot in saying to the Lords that we are quite prepared if this totally unelected House of Lords thwarts the will of the people, we will get on with the business as well as reforming you.

NP: Still, the House of Lords never tends to react well when it’s threatened. Whilst we have you here I just wanted to ask you something, you mentioned the Wirral there and back in the 80s you were very strong against Militant Tendency, I wonder what you think currently about the way in which Momentum has clear influence over the direction of the party now having a majority on the NEC?

FRANK FIELD: Well it might have some advantage but I can only see the disadvantages of that but if Labour members are threatened, the people that will decide whether I’m the Member of Parliament for Birkenhead will not be Momentum but will be the electorate. I’ve always made that plain when they decided they would deselect me, I don't know how many times they deselected me in the early 80s but this decision will not be decided by them but will be decided by the electorate and I would hope that we won’t actually let anybody swing along. Those who reject picking off people, not because they’re not really good MPs – and I’m all in favour of lazy MPs being sacked and all the rest of it because that was the whole basis, the reason for deselection, it wasn’t ideological purity – that we actually stand together on this.

NP: Mr Field, many thanks for joining us.

FRANK FIELD: A pleasure.