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Version 17 Version 18
Carillion liquidation: Private sector contracts could be terminated in 48 hours - live Carillion liquidation: Private sector contracts could be terminated in 48 hours - live
(35 minutes later)
Labour’s Kate Green asks if Carillion has been hit with penalties over its poor management of the prison service contract? (all those broken windows at Wandsworth....)
Lidington says he’ll ask the Justice department.
Labour’s Stephen Kinnock says Carillion is a ‘sorry tale of the privatisation of profit and the nationalisation of risk’.
Q: Isn’t the case for a windfall tax on these companies now unanswerable?
David Lidington denies this; Carillion isn’t being bailed out, and the risk remains with the private sector.
Conservative MP Robert Coutts asks the government to guarantee that Oxford’s John Radcliffe hospital* won’t be hurt by Carillion’s collapse [Carillion has provided services at the JR since 2005]
Lidington says there is not sign that the JR has been affected by Carillion’s problems.
Lidington denies that he is just providing a helpline - we are also guaranteeing that public sector contracts will continue.
Lidington denies that Carillion’s demise reflects badly on the UK, saying that “there are few countries where companies don’t fail”.
Carillion’s collapse is a welcome reminder that “Capitalism without bankruptcy is like Christianity without hell,” says Conservative MP Andrew Bridgen.
“Without it - there’s nothing to keep us on the straight and narrow.”
Lidington won’t be lured into a theological debate, but agrees that the work contracted to Carillion should continue.
Does the government’s protection of Carillion’s public sector contracts include new commitments, or might early-stage projects be ditched, asks Labour’s Louise Haigh.
Lidington says the Official Receiver, and government departments, must examine each contract to see how to take them best forward.
Kevan Jones MP asks about Carillion’s habit of not paying suppliers for several weeks (120 days in some cases, apparently)
Q: What will the government do to help them?
Lidington says suppliers who have not been paid now become official creditors. And he suggests that the government will not bail out these companies -- taxpayers’ money should be used to protect public services.
How many profit warnings does a company have to issue before this government decides not to hand it any more business, asks Liberal Democrat MP Stephen Lloyd.
Lidington replies that profit warnings happen from time to time; shunning a company on this basis would only push it into deeper problems.
Conservative MP Kevin Foster asks what protections are being provided for Carillion pensioners.
Cabinet Office minister David Lidington says the Official Receiver must examine 12 separate pension funds. But the bottom line is that all existing pensioners will be protected.
Labour’s Liz McInnes asks if the Carillion crisis will exacerbate the NHS’s winter crisis.
Lidington says (again) that contingency plans are in place to protect health services.
Conservative MP Bob Neill asks how Carillion’s prison contracts will keep operating.
Lidington says the government has contingency plans - a new government company could be created to take over this work.
Sam Coates of The Times is stuck by the government’s warning that Carillion’s private sector contracts could be terminated on Wednesday, unless customers commit to keep paying up.
Carillion: Sub contractors involved in the firm’s public service worn will also be protected; those involved in private sector will not
Carillion - public sector employees’ wages will continue to be paid. Private sector employees will see fate decided in next 48 hours - Lidington
Former infrastructure tsar Lord Adonis isn’t impressed by Lidington’s comments:
NOT A GOOD LINE TO TAKE, MINISTERDavid Lidington accuses Labour of 'scaremongering' and 'political point scoring' over the collapse of Carillion - with 20,000 UK jobs and £ billions in state contracts on the line!
This is from The Sun’s Steve Hawkes:
Catching up with Carillion debate, but David Lidington completely side-stepped question of whether the ex-ceo should continue to get £660,000 'salary' this year (that's right, even tho he's already left)
Another Labour MP, Pat McFadden, asks about the new ‘jobcentre plus’ helpline which the government has set up today.Another Labour MP, Pat McFadden, asks about the new ‘jobcentre plus’ helpline which the government has set up today.
Q: Doesn’t that undermine his promise that they will keep being paid if they turn up to work?Q: Doesn’t that undermine his promise that they will keep being paid if they turn up to work?
Lidington says that all Carillion workers are protected for the next 48 hours, even those employed on contracts with the private sector [which is three-fifths of Carillion’s business].Lidington says that all Carillion workers are protected for the next 48 hours, even those employed on contracts with the private sector [which is three-fifths of Carillion’s business].
But after 48 hours, either the private sector counter-party must agree to fund future provision including the fees of the Official Receiver, or those private sector contracts of Carillion will be terminated.But after 48 hours, either the private sector counter-party must agree to fund future provision including the fees of the Official Receiver, or those private sector contracts of Carillion will be terminated.
The new Jobcentre Plus helpline is meant to help those people in particular, Lidington adds.The new Jobcentre Plus helpline is meant to help those people in particular, Lidington adds.
[Reminder: workers on public sector contracts have greater protection; the Receiver will keep operating those contracts][Reminder: workers on public sector contracts have greater protection; the Receiver will keep operating those contracts]
Labour’s Stella Creasy says Carillion has made nearly £1bn profit on PFI contracts over the last four years.
Will the government now bring in a windfall tax on PFI profits?
Cabinet Office minister David Lidington replies that PFI has provided £60bn of capital to improve public services.
PFI is not an ‘easy ticket for riches’ for contractors, he insists. In this case, the shareholders and creditors of Carillion are suffering very significant losses.
Extraordinary to hear Government ministers calling for review of procurement and suggesting a tighter grip on companies used - this government supposedly reviewed and fixed PFI problems in 2012 and created PF2. Which carillion contracts are… #pfiddle
Labour’s Hilary Benn asks David Lidington to confirm that all payments made to Carillion under PFI contracts from councils will not cease, and that the Official Receiver will not be allowed to sell these contracts on.
Lidington says he isn’t aware of any PFI contracts facing an immediate crisis; but the future of all Carillion contracts depends on finding fresh suppliers to take them on.
Conservative MP Sir Desmond Swayne asks whether government officials are capable of spotting when a company is pitching its services too cheaply.
Lidington says there should be a ‘fresh look’ into how the government handles such issues.
Labour’s Rachel Reeves points out that Carillion kept paying dividends to shareholders, even as it ran up £900m of debts and a £580m pensions black hole.
And it is still paying £600,000 to its ex-CEO (Richard Howson)
Q: Can you confirm that those payments to Carillion’s CEO end today?
Lidington repeats that the Official Receiver will examine whether directors have acted properly (which I think means that Howson’s payments continue for the moment...)
Echoing Bill Cash’s comments, Conservative MP Dame Cheryl Gillan says that Carillion’s demise is a great opportunity to cancel HS2.
Lidington reiterates that Carillion’s liquidation doesn’t affect the construction of HS2.
Labour MP Emma Reynolds asks Lidington about the revelation that Carillion changed its bonus rules, to make it harder to claw money back from bosses.
Lidington says he mustn’t pre-empt the Official Receiver’s probe into the conduct of past and present directors. But he emphasises that the Receiver can impose ‘severe’ penalties if there has been misconduct.
Tory MP Bill Cash asks about the impact on High-Speed Two .
Does Carillion’s collapse affect the viability of the project?
Lidington says HS2 will continue as planned, as the two other private sector parties will take over Carillion’s responsibilities (that’s Kier, and French civil engineering group Eiffage).
Bill Cash, whose constituency is "carved up" by #HS2, asks about impact on his consituents. @DLidington reconfirms that other JV partners are bound to continue project, for same price #Carillion
Labour MP Eleanor Smith says the liquidation of Carillion hit workers like a bomb today (the company’s HQ is in her Wolverhampton constituency).
What support will the government provide? What future can ministers provide?
Lidington agrees to meet with her to discuss what support can be provided to the company’s staff.
Wolverhampton South West MP Eleanor Smith asking for a meeting with govt, sounds genuinely moved by it all #Carillion. @DLidington says happy to meet.
Conservative MP Iain Duncan-Smith congratulates David Lidington on his ‘swift action’ over Carillion.
He says Labour drove the move towards outsourcing public services (during the Blair-Brown years).
Lidington replies that his immediate priority is focusing on the continuity of public services, but eventually ministers should look at the wider issue of outsourcing.
The SNP’s Tommy Sheppard asks what will happen to Carillion’s contracts in Scotland.
He also asks what due diligence was carried out by the government, given it handed Carillion £2bn of contracts in recent months.
Q: Was it incompetence or ideology that led to ministers signing off multi-million pound contracts to a company that was going bust?
David Lidington assures Sheppard that the government will continue to pay the salaries and bills owed by Carillion in Scotland, as in the rest of the UK.
Some contracts will be transferred to other suppliers, he suggests, while others could be taken in-house by the government.