Rebecca Long-Bailey says she doesn’t regret working on hospital PFIs

Defence comes as leadership contender warns Labour will be turned into centrist party ‘akin to the Liberal Democrats’ if she loses

Rebecca Long-Bailey says she has no regrets about working on PFI contracts before she became an MP, after criticism that she helped “privatise the NHS”.

The Labour leadership contender defended her previous involvement as a solicitor, saying: “It’s one of the things that pushed me into becoming an MP.”

Ms Long-Bailey denied helping to construct private finance initiative (PFI) agreements, blamed for loading hospitals with huge debts, explaining: “I wasn’t drawing up the PFI deals, I didn’t work for the PFI companies.

“It was a fact that if you were working within the NHS – if you had to grant a lease to a pharmacy or a GP – you were operating within a structure that was going to exist for 30 years in many cases,” she said.

The defence came as she accused a leadership rival of planning to turn Labour into a centrist party “akin to the Liberal Democrats”, although she did not name either Keir Starmer or Lisa Nandy.

In separate interviews, Ms Long-Bailey – the left-wing candidate, backed by Jeremy Corbyn – was asked about her PFI work, despite her stance as a defender of a publicly run NHS.

She did not dispute that it had involved being “part of a legal team that handed over ownership of £190m of NHS assets to a Luxembourg investment vehicle”.

But she argued it was “the fault of a Conservative government and previous Labour governments” that working on local authority contracts involved her in PFI contracts.

Gordon Brown argued PFI – a mortgage-style arrangement, under which the private sector built schools and hospitals and charged the public sector huge repayment sums – quickly rebuilt battered public services.

However, it has been widely criticised for burdening them with massive debts that make it harder to run day-to-day services decades later.

Speaking to BBC Radio 4’s Today programme, Ms Long-Bailey said her work made her realise PFI was “economically nonsensical”, adding: “I was very angry at the way I saw our NHS being privatised.”

Later, she explained her plans to rewrite and expand Labour’s totemic Clause IV to commit the party to expanding public ownership.

“We have always been a democratic socialist party and it is important for it to be in the rule book, to state very clearly that’s what we are,” she said.

And referring to the US Democrats, she claimed: “There is an ongoing argument within the party as to whether we are a socialist party, or whether we are veering towards a more ‘Democratic’ style of party, which is akin to the Liberal Democrats here in the United Kingdom.

“That’s never what the Labour party was intended to be.”

Sir Keir has faced criticism that he wants to return Labour to a more moderate position – and says he is relaxed about being called a Blairite – but has also pledged to retain most of the Corbynite inheritance.