Ministers will face pressure to explain PPE Medpro contract decision | Michelle Monet

Ministers will come under intense pressure this week to explain how they judged a personal protective equipment (PPE) company linked to Conservative peer Michelle Mone was fit to receive government contracts worth more than £200m during the pandemic.

Angela Rayner, Labour’s deputy leader, has drawn up a list of parliamentary questions regarding the Department of Health and Social Care’s (DHSC) decision to award major government contracts to the firm and whether it took into account the tax record.

The Guardian reported last week that Mone and her children secretly received £29m from the profits of the company, PPE Medpro, which was later transferred to a secret offshore trust.

The firm was awarded major government contracts after the Tory peer, an underwear entrepreneur, helped it secure a place in a “VIP lane” the government used to prioritize companies with political connections.

Oliver Dowden, the cabinet minister, will be asked by Labor whether PPE Medpro was assessed against the grounds for excluding bidders from public procurement procedures.

Rayner will ask what provisions were included in the company’s contracts to terminate the agreement if it later emerged that any of these exclusion criteria were breached.

In addition, she will ask the Treasury to reveal how much tax was paid by PPE Medpro in the 2020-21 tax year, and what steps officials are taking to track profits from suppliers through public procurement that end up in offshore trusts.

The government spent more than £13bn on PPE during the Covid pandemic and has been accused of failing to carry out sufficient due diligence when awarding contracts, with billions wasted on fraud and unused equipment. The ministers claim they were under pressure to buy PPE where they could due to global shortages.

The High Court ruled earlier this year that the government had acted unlawfully by operating a special VIP lane for suppliers of PPE who had links to politicians, stating that the operation was “in breach of the obligation of equal treatment”.

In a statement, Rayner said: “The latest revelations about Baroness Mone and PPE Medpro show a total failure of due diligence and serious conflicts of interest at the heart of public procurement.

“Ministers must account for the checks carried out on PPE Medpro’s financial and fiscal affairs prior to the award of £203 million in public sector contracts, as well as the steps they took to fulfill their duties to include termination clauses in those contracts.

“The government’s new procurement law shows that far from learning the lessons of this scandal, they are setting up taxpayers to ensure a repeat performance.”

When asked by The Guardian last year why Mone did not include PPE Medpro in the House of Lords register of financial interests, her lawyer replied: “Baroness Mone declared no interest as she had no financial benefit and was not connected to PPE Medpro in any capacity.”

The leaked documents, produced by HSBC, appear to contradict that that statement. They state that Mone’s husband, Isle of Man-based financier Douglas Barrowman, was paid at least £65m in profits from PPE Medpro, then distributed the funds through a number of offshore accounts, trusts and companies.

The ultimate beneficiaries of the funds, the documents show, include the Isle of Man trust set up for the benefit of Mone, who was Barrowman’s fiancee at the time, and her children. In October 2020, the documents add, Barrowman transferred to the trust £28.8m derived from PPE Medpro profits.

It was just five months after Mone helped PPE Medpro secure contracts to supply masks and sterile gowns for use in the NHS. The company has refused to say how it would repay millions of pounds of public money for unused equipment if it was ordered to do so after a dispute with authorities.

DHSC said it could not comment on the details of the PPE Medpro contract because it was in a mediation process with the government. “Due diligence was carried out on all companies referred to the department,” it said.

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