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Carillion crisis: Theresa May rules out bailout - live updates Carillion crisis: Theresa May rules out bailout - live updates
(35 minutes later)
The shockwaves from Carillion’s liquidation has reached Canada, where the company employs 6,000 people.
Canadian unions say the crisis shows the folly of handing key public services to private companies. They are pushing Ontario’s provincial government to stop the privatization of hospital service contracts.
Reuters has the details:
The call for the Canadian government to step in came from Unifor and the Ontario Council of Hospital Unions (OCHU/CUPE), which represents employees at the William Osler Health System, The Royal Ottawa Hospital, Halton Healthcare and the Sault Area Hospital.
The hospitals have service contracts with Carillion, the unions said, adding the workers are among the 6,000 Canadian workers affected by the Carillion liquidation.
“It is also time for these projects to be brought back into the public sector. The folly of private ownership of the hospitals is exposed fully by this bankruptcy,” OCHU president Michael Hurley said in a statement.
Liberal Democrat leader Sir Vince Cable has welcomed the government’s decision to fast-track the investigation of Carillion’s current and former directors.
But, like John McDonnell earlier, he also wants ministers to answer questions about their actions.
“We also need a National Audit Office probe, followed by parliamentary scrutiny by the Public Accounts Committee to fully understand what led to Carillion’s collapse.
“We need to know why the Government felt it was not wrong to feed Carillion lucrative public sector contracts when they knew the company was in severe trouble because of its profit warnings.”
ITV’s Joel Hills has more details of the Carillion witness statement, and it’s very bad news for creditors:ITV’s Joel Hills has more details of the Carillion witness statement, and it’s very bad news for creditors:
Witness statement filed at High Court by Carillion CEO is doing the rounds. It’s fascinating. Reveals that expected recovery for creditors in liquidation is 0.8p - 6.6p in the £. Ouch.Witness statement filed at High Court by Carillion CEO is doing the rounds. It’s fascinating. Reveals that expected recovery for creditors in liquidation is 0.8p - 6.6p in the £. Ouch.
Those creditors will include big banks, and also small firms who were contracted by Carillion such as Flora-tec which is already sacking staff.Those creditors will include big banks, and also small firms who were contracted by Carillion such as Flora-tec which is already sacking staff.
Nationwide Building Society has agreed to pay around 250 Carillion employees who work its data centres and head office until the end of this month.Nationwide Building Society has agreed to pay around 250 Carillion employees who work its data centres and head office until the end of this month.
However, the future of up to 1,500 workers who clean its national branch network hangs in the balance, as the government is only protecting private-sector contract workers until Wednesday.However, the future of up to 1,500 workers who clean its national branch network hangs in the balance, as the government is only protecting private-sector contract workers until Wednesday.
Tim Poil, general secretary of the Nationwide Group Staff Union, which directly represents 250 Carillion employees, said:Tim Poil, general secretary of the Nationwide Group Staff Union, which directly represents 250 Carillion employees, said:
“We have been negotiating with Nationwide since the end of last week.“We have been negotiating with Nationwide since the end of last week.
Nationwide has said to the Carillion employees on the Nationwide contract - about 250 in total - that they will ensure they will be paid to the end of the month.”Nationwide has said to the Carillion employees on the Nationwide contract - about 250 in total - that they will ensure they will be paid to the end of the month.”
The 250 staff are understood to be maintenance engineers in the data centres, who were transferred from Nationwide to Carillion in 2008, plus reception and security staff at the society’s Swindon headquarters.The 250 staff are understood to be maintenance engineers in the data centres, who were transferred from Nationwide to Carillion in 2008, plus reception and security staff at the society’s Swindon headquarters.
Carillion is also responsible for the cleaning of Nationwide’s 650 branches around the country - but had itself outsourced the work to other companies. The number of cleaners could be as high as 1,200 to 1,500, said Poil.Carillion is also responsible for the cleaning of Nationwide’s 650 branches around the country - but had itself outsourced the work to other companies. The number of cleaners could be as high as 1,200 to 1,500, said Poil.
“My understanding is that Nationwide has been in touch with the company to ensure the branches do get cleaned,” said Poil, but their future contractual arrangements remain very unclear.“My understanding is that Nationwide has been in touch with the company to ensure the branches do get cleaned,” said Poil, but their future contractual arrangements remain very unclear.
A major problem for private sector employers that outsourced to Carillion, said Poil, is that the company is officially neither in adminstration or insolvency. If Pricewaterhouse Coopers sells the service contracts to another outsourcing company, then the unions expect employees to be transferred (or Tupe’d) over to the new employer with existing terms and conditions.A major problem for private sector employers that outsourced to Carillion, said Poil, is that the company is officially neither in adminstration or insolvency. If Pricewaterhouse Coopers sells the service contracts to another outsourcing company, then the unions expect employees to be transferred (or Tupe’d) over to the new employer with existing terms and conditions.
But if Carillion is declared insolvent, then employers will have to decide whether to take employees back in house or hurriedly obtain a new outsourcing company to do the work.But if Carillion is declared insolvent, then employers will have to decide whether to take employees back in house or hurriedly obtain a new outsourcing company to do the work.
Poil says:Poil says:
“My question to Nationwide is, should you really be outsourcing these sorts of services? It might have looked good at first, but it has fallen apart. If they say to us again they want to outsource some work currently done in house, we’ll be saying, Carillion? Are you sure?”“My question to Nationwide is, should you really be outsourcing these sorts of services? It might have looked good at first, but it has fallen apart. If they say to us again they want to outsource some work currently done in house, we’ll be saying, Carillion? Are you sure?”
An official spokesperson for Nationwide said the society hopes to issue a formal statement later today.An official spokesperson for Nationwide said the society hopes to issue a formal statement later today.
The FT reports that Carillion had reached a perilous financial position by the time it fell into liquidation on Monday morning.The FT reports that Carillion had reached a perilous financial position by the time it fell into liquidation on Monday morning.
Their reporter, Gill Plimmer, explains writes:Their reporter, Gill Plimmer, explains writes:
Carillion was left with just £29m in cash when it collapsed, according to a document that reveals the extent of the construction company’s financial black hole.Carillion was left with just £29m in cash when it collapsed, according to a document that reveals the extent of the construction company’s financial black hole.
Papers seen by the Financial Times show the insolvent construction company owed £1.29bn to its banks, including a £790m revolving credit facility and £349m in private placement notes.Papers seen by the Financial Times show the insolvent construction company owed £1.29bn to its banks, including a £790m revolving credit facility and £349m in private placement notes.
The papers also show that two firms were unwilling to become administrators, as they feared they might not get paid.....The papers also show that two firms were unwilling to become administrators, as they feared they might not get paid.....
So @gillplimmer1 has obtained papers showing:-Carillion had just £29m in cash when it collapsed-Owed £1.29bn to its banks (higher than previous guidance of £900m)-PwC and EY rejected requests to be administrators amid concerns they would not be paidhttps://t.co/JnDTGwsHAlSo @gillplimmer1 has obtained papers showing:-Carillion had just £29m in cash when it collapsed-Owed £1.29bn to its banks (higher than previous guidance of £900m)-PwC and EY rejected requests to be administrators amid concerns they would not be paidhttps://t.co/JnDTGwsHAl
Newsflash: America’s stock market has hit a new alltime high, as the bull market continues.Newsflash: America’s stock market has hit a new alltime high, as the bull market continues.
The Dow Jones index jumped by 0.86%, or 223 points, to 26,027. This is the first time it has ever burst over the 26k mark. The S&P 500 and the Nasdaw are also at new peaks.The Dow Jones index jumped by 0.86%, or 223 points, to 26,027. This is the first time it has ever burst over the 26k mark. The S&P 500 and the Nasdaw are also at new peaks.
Dow Jones index opens above 26,000 points pic.twitter.com/JJxLf8fPBpDow Jones index opens above 26,000 points pic.twitter.com/JJxLf8fPBp
Now, the Dow isn’t a great measure of the US economy (or even the wider stock market, really). And this is just an arbitrary number. But, the speed at which shares are rising is remarkable - it’s less than two weeks since the Dow burst through 25,000.Now, the Dow isn’t a great measure of the US economy (or even the wider stock market, really). And this is just an arbitrary number. But, the speed at which shares are rising is remarkable - it’s less than two weeks since the Dow burst through 25,000.
Sky News is reporting that Carillion’s interim chief executive, Keith Cochrane, has accused Royal Bank of Scotland of undermining efforts to keep it afloat.Sky News is reporting that Carillion’s interim chief executive, Keith Cochrane, has accused Royal Bank of Scotland of undermining efforts to keep it afloat.
Cochrane apparently criticised banks, including RBS, in a witness statement filed at the High CourtCochrane apparently criticised banks, including RBS, in a witness statement filed at the High Court
Sky’s Mark Kleinman reports:Sky’s Mark Kleinman reports:
According to Mr Cochrane’s witness statement, RBS informed Carillion last Thursday that it wanted the company to pre-fund supplier payments made through the bank, which meant it would need to make those payments two days earlier than cashflow forecasts had assumed.According to Mr Cochrane’s witness statement, RBS informed Carillion last Thursday that it wanted the company to pre-fund supplier payments made through the bank, which meant it would need to make those payments two days earlier than cashflow forecasts had assumed.
He said this negatively impacted Carillion’s liquidity by between £2m and £20m.He said this negatively impacted Carillion’s liquidity by between £2m and £20m.
RBS, he added, insisted that this revised arrangement “would be in place until support from [the Government] had been agreed and that the terms of this support would determine whether other uncommitted facilities with RBS would be withdrawn”.RBS, he added, insisted that this revised arrangement “would be in place until support from [the Government] had been agreed and that the terms of this support would determine whether other uncommitted facilities with RBS would be withdrawn”.
Having been bailed out in 2008, RBS is still majority-owned by the taxpayer -- who of course is now on the hook for potential costs at Carillion.Having been bailed out in 2008, RBS is still majority-owned by the taxpayer -- who of course is now on the hook for potential costs at Carillion.
The UK division of Spanish bank Santanter has also been blamed, for making changes to Carillion’s ‘Early Payment Facility’ - used to make payments to suppliers.The UK division of Spanish bank Santanter has also been blamed, for making changes to Carillion’s ‘Early Payment Facility’ - used to make payments to suppliers.
Cochrane says:Cochrane says:
“The company relied upon that EPF in order to assist it making payments to its suppliers.“The company relied upon that EPF in order to assist it making payments to its suppliers.
“Santander informed the group’s suppliers that arrangements to automatically prepay invoices submitted by the supplier would be terminated and it sent a separate email to certain of its suppliers that ‘all payments with Carillion are stopped’.“Santander informed the group’s suppliers that arrangements to automatically prepay invoices submitted by the supplier would be terminated and it sent a separate email to certain of its suppliers that ‘all payments with Carillion are stopped’.
Theresa May told her cabinet that the “taxpayer could not be expected to bail out a private company” following the collapse of Carillion, according to her official spokesman.Theresa May told her cabinet that the “taxpayer could not be expected to bail out a private company” following the collapse of Carillion, according to her official spokesman.
He said the prime minister addressed the issue at the start of this morning’s meeting of her top team of ministers, arguing that a lot of work had gone into trying to find suitable financing options but that had not proved possible.He said the prime minister addressed the issue at the start of this morning’s meeting of her top team of ministers, arguing that a lot of work had gone into trying to find suitable financing options but that had not proved possible.
The spokesman made clear that in the short term the government would ensure that public services carried out operating, but that was simply replicating money that would have gone to the company - rather than pushing up the bill for taxpayers.The spokesman made clear that in the short term the government would ensure that public services carried out operating, but that was simply replicating money that would have gone to the company - rather than pushing up the bill for taxpayers.
Number 10: “There is no taxpayer money to bail out the company”... says money going to Receiver to pay for cost of insolvency, but other money for public services would have been paid to CarillionNumber 10: “There is no taxpayer money to bail out the company”... says money going to Receiver to pay for cost of insolvency, but other money for public services would have been paid to Carillion
They admitted that public money would have to go to paying the receiver. However, a Whitehall source denied the suggestion that the money could run into the hundreds of millions, saying “it will be nowhere near that”.They admitted that public money would have to go to paying the receiver. However, a Whitehall source denied the suggestion that the money could run into the hundreds of millions, saying “it will be nowhere near that”.
The official spokesman said May thanked David Lidington and other departments for making contingency arrangements. “The PM said that public services had continued to be provided but there would be no complacency,” he added.The official spokesman said May thanked David Lidington and other departments for making contingency arrangements. “The PM said that public services had continued to be provided but there would be no complacency,” he added.
“She said Government would be vigilant in monitoring for any emerging issues in public services and in providing support for employees of companies with private sector Carillion contracts.”“She said Government would be vigilant in monitoring for any emerging issues in public services and in providing support for employees of companies with private sector Carillion contracts.”
Business secretary, Greg Clark, also briefed the cabinet about his call for a fast-track investigation into the conduct of Carillion’s directors.Business secretary, Greg Clark, also briefed the cabinet about his call for a fast-track investigation into the conduct of Carillion’s directors.
The spokesman said:The spokesman said:
“This means the Official Receiver’s investigation will consider whether those who are, or were previously directors of the company may have caused detriment to those owed money, including workers and businesses affected.”“This means the Official Receiver’s investigation will consider whether those who are, or were previously directors of the company may have caused detriment to those owed money, including workers and businesses affected.”
At Cabinet, Business Secretary Clark explained letter to Insolvency Service asking for statutory investigation into the conduct of Carillion directors to be extended to include previous directors and for it to be fast-trackedAt Cabinet, Business Secretary Clark explained letter to Insolvency Service asking for statutory investigation into the conduct of Carillion directors to be extended to include previous directors and for it to be fast-tracked
Labour’s shadow chancellor, John McDonnell, has accused the UK government of colluding to support Carillion by ‘drip-feeding’ it with contracts.Labour’s shadow chancellor, John McDonnell, has accused the UK government of colluding to support Carillion by ‘drip-feeding’ it with contracts.
Speaking on Sky News, McDonnell said ministers erred by keeping handing Carillion contracts in recent months, after July’s profit warning.Speaking on Sky News, McDonnell said ministers erred by keeping handing Carillion contracts in recent months, after July’s profit warning.
McDonnell is urging openness and transparency:McDonnell is urging openness and transparency:
We need a full public inquiry, immediately, to find out exactly what happened.We need a full public inquiry, immediately, to find out exactly what happened.
We want to know what the government’s involvement in all this is.We want to know what the government’s involvement in all this is.
McDonnell says the government needs to reveal how much the taxpayer could lose, now that the Official Receiver has taken control of Carillion.McDonnell says the government needs to reveal how much the taxpayer could lose, now that the Official Receiver has taken control of Carillion.
This could be a bottomless pit if we’re not careful.This could be a bottomless pit if we’re not careful.
Greg Clark’s call for a ‘fast-track’ investigation comes “so late” in the day, McDonnell continues, suggesting that the government has serious questions to answer:Greg Clark’s call for a ‘fast-track’ investigation comes “so late” in the day, McDonnell continues, suggesting that the government has serious questions to answer:
Government ministers seem to have colluded in a strategy where, even when they know the company was in trouble, when the company’s share price was collapsing and there were profit warnings and resignation [they] still drip-fed this company with public contracts.Government ministers seem to have colluded in a strategy where, even when they know the company was in trouble, when the company’s share price was collapsing and there were profit warnings and resignation [they] still drip-fed this company with public contracts.
It was just a strategy that was bound to fail, and put pressure on workers and unfortunately now taxpayer as well.It was just a strategy that was bound to fail, and put pressure on workers and unfortunately now taxpayer as well.
The Carillion collapse has raised real suspicions that the government was too close to this company and too wedded to its privatisation roleThe Carillion collapse has raised real suspicions that the government was too close to this company and too wedded to its privatisation role
City AM’s Cat Neilan has tweeted Greg Clark’s letters, which ratchet up the pressure on Carillion’s management, and its auditors at KPMG.City AM’s Cat Neilan has tweeted Greg Clark’s letters, which ratchet up the pressure on Carillion’s management, and its auditors at KPMG.
... and Clark's #Carillion letter to #FRC pic.twitter.com/OYgv7Q8G3X... and Clark's #Carillion letter to #FRC pic.twitter.com/OYgv7Q8G3X
Here's the letter in which @GregClarkMP asks the investigation "consider the extent to which the conduct of the directors of #Carillion led to it's insolvency". pic.twitter.com/BP5N1tS7mpHere's the letter in which @GregClarkMP asks the investigation "consider the extent to which the conduct of the directors of #Carillion led to it's insolvency". pic.twitter.com/BP5N1tS7mp
Newsflash: The UK’s Department for Business is pushing for a “fast-track” investigation into Carillion’s directors.Newsflash: The UK’s Department for Business is pushing for a “fast-track” investigation into Carillion’s directors.
Business secretary Greg Clark has written to the Insolvency Service and the Official Receiver, asking for the statutory investigation into the conduct of Carillion’s directors to be fast-tracked and extended in scopeBusiness secretary Greg Clark has written to the Insolvency Service and the Official Receiver, asking for the statutory investigation into the conduct of Carillion’s directors to be fast-tracked and extended in scope
The probe will examine whether any Carillion directors, past or present, committed any misconduct or harmed creditors, workers and other businesses.The probe will examine whether any Carillion directors, past or present, committed any misconduct or harmed creditors, workers and other businesses.
NEW Business Secretary has asked the Official Receiver to speed up and broaden their investigation into Carillion Directors (to include former Directors) and whether they ‘caused detriment’ to workers and businesses who are owed money.NEW Business Secretary has asked the Official Receiver to speed up and broaden their investigation into Carillion Directors (to include former Directors) and whether they ‘caused detriment’ to workers and businesses who are owed money.
Clark has also asked the Financial Reporting Council to examine how Carillion’s accounts were prepared, and the actions of its auditors -- KPMG.Clark has also asked the Financial Reporting Council to examine how Carillion’s accounts were prepared, and the actions of its auditors -- KPMG.
Clark says:Clark says:
It is important we quickly get the full picture of the events which caused Carillion to enter liquidation, which is why I have asked the Insolvency Service to fast-track and broaden the scope of the Official Receiver’s investigation.It is important we quickly get the full picture of the events which caused Carillion to enter liquidation, which is why I have asked the Insolvency Service to fast-track and broaden the scope of the Official Receiver’s investigation.
In particular, I have asked that the investigation looks not only at the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors. Any evidence of misconduct will be taken very seriously.In particular, I have asked that the investigation looks not only at the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors. Any evidence of misconduct will be taken very seriously.
Clark is also due to meet with the heads of the TUC and Unite union, Frances O’Grady and Len McCluskey, later today.Clark is also due to meet with the heads of the TUC and Unite union, Frances O’Grady and Len McCluskey, later today.
Yesterday, Carillion’s management were heavily criticised for changing their bonus rules, making it harder to claw back payments. The Institute of Directors called the move “highly inappropriate”Yesterday, Carillion’s management were heavily criticised for changing their bonus rules, making it harder to claw back payments. The Institute of Directors called the move “highly inappropriate”
Nicky Morgan MP asks Philip Hammond how the government will help small firms who are struggling to pay wages and their tax liabilities.Nicky Morgan MP asks Philip Hammond how the government will help small firms who are struggling to pay wages and their tax liabilities.
Hammond says HMRC already has a scheme to help firms who have problems pay their tax bills. Ministers have agreed that HMRC should ‘signpost it’ on the government’s Carillion information websites.Hammond says HMRC already has a scheme to help firms who have problems pay their tax bills. Ministers have agreed that HMRC should ‘signpost it’ on the government’s Carillion information websites.
Shadow chancellor John McDonell warns the government that thousands of Carillion employees will turn up to work tomorrow, not knowing if they have a job.Shadow chancellor John McDonell warns the government that thousands of Carillion employees will turn up to work tomorrow, not knowing if they have a job.
Workers in the supply chain also face an uncertain future, McDonell adds.Workers in the supply chain also face an uncertain future, McDonell adds.
He asks how many PFI contracts were signed off by the Treasury under Philip Hammond, and what will happen to the people who work on them.He asks how many PFI contracts were signed off by the Treasury under Philip Hammond, and what will happen to the people who work on them.
And why did ministers “collude in the strategy of drip-feeding more contracts” to “buoy up an obviously failing company”?And why did ministers “collude in the strategy of drip-feeding more contracts” to “buoy up an obviously failing company”?
Chief secretary to the Treasury, Liz Truss, says the government’s priority is to keep supplying public services and support Carillion’s workers. But it would be wrong to prop up a private company that got itself into difficulties.Chief secretary to the Treasury, Liz Truss, says the government’s priority is to keep supplying public services and support Carillion’s workers. But it would be wrong to prop up a private company that got itself into difficulties.
Over in parliament, chancellor Philip Hammond has been quizzed about the Carillion crisis.Over in parliament, chancellor Philip Hammond has been quizzed about the Carillion crisis.
Labour MP Helen Goodman asks about what protection is being provided to the Official Receiver, which took control of Carillion’s operations after it fell into liquidation yesterday.Labour MP Helen Goodman asks about what protection is being provided to the Official Receiver, which took control of Carillion’s operations after it fell into liquidation yesterday.
Hammond confirms that the government has given the Receiver an indemnity, to protect it from any losses. It also has a credit line to cover costs, which can be recovered from government departments in teh future.Hammond confirms that the government has given the Receiver an indemnity, to protect it from any losses. It also has a credit line to cover costs, which can be recovered from government departments in teh future.
Helen Goodman asks chancellor about the indemnity on the Carillion Receiver that I reported last night --Hammond: Treasury has provided a line of credit to official receiver [for provision of public services], recovering cost from Departments which would have paid for servicesHelen Goodman asks chancellor about the indemnity on the Carillion Receiver that I reported last night --Hammond: Treasury has provided a line of credit to official receiver [for provision of public services], recovering cost from Departments which would have paid for services
Q: What exposure does the government have to Carillion, though loans to the company or support for exports?Q: What exposure does the government have to Carillion, though loans to the company or support for exports?
Hammond says he isn’t aware of any direct exposure to Carillion, but will check.Hammond says he isn’t aware of any direct exposure to Carillion, but will check.
The TUC says its proposed Carillion taskforce would have five priorities:The TUC says its proposed Carillion taskforce would have five priorities:
involve unions to give Carillion workers certainty on their jobs, pay and pensions;involve unions to give Carillion workers certainty on their jobs, pay and pensions;
bring Carillion’s public-sector contracts back in-house to ensure consistent delivery;bring Carillion’s public-sector contracts back in-house to ensure consistent delivery;
support transfer of private sector contracts to alternative providers with jobs, pay and pensions protected;support transfer of private sector contracts to alternative providers with jobs, pay and pensions protected;
fund a training and financial support package for at-risk workers and apprentices; andfund a training and financial support package for at-risk workers and apprentices; and
perform a risk assessment on other large outsourcing firms to avoid another crisis.perform a risk assessment on other large outsourcing firms to avoid another crisis.
BREAKING: Britain’s trade unions are calling for a ‘national taskforce’ to be set up, to protect UK firms from the collapse of Carillion.BREAKING: Britain’s trade unions are calling for a ‘national taskforce’ to be set up, to protect UK firms from the collapse of Carillion.
The TUC, which represents many UK trades unions, says the government needs to take urgent action to protect workers at Carillion, and across the wider economy.The TUC, which represents many UK trades unions, says the government needs to take urgent action to protect workers at Carillion, and across the wider economy.
It also wants ministers to conduct ‘risk assessments’ of other large outsourcing firms, to see if they are facing similar problemsIt also wants ministers to conduct ‘risk assessments’ of other large outsourcing firms, to see if they are facing similar problems
Yesterday the West Midlands mayor, Andy Street, the former boss of John Lewis, said he had set up a taskforce to assist Carillion suppliers and subcontractors. The TUC are pushing for a much larger initiative, though.Yesterday the West Midlands mayor, Andy Street, the former boss of John Lewis, said he had set up a taskforce to assist Carillion suppliers and subcontractors. The TUC are pushing for a much larger initiative, though.
TUC General Secretary Frances O’Grady says:TUC General Secretary Frances O’Grady says:
“We urgently need a national taskforce involving unions to safeguard jobs, services, and pensions.“We urgently need a national taskforce involving unions to safeguard jobs, services, and pensions.
“Workers can’t be left at the back of the queue. Each and every worker at Carillion needs to know where they stand. They have bills and mortgages to pay, and deserve certainty on their future.“Workers can’t be left at the back of the queue. Each and every worker at Carillion needs to know where they stand. They have bills and mortgages to pay, and deserve certainty on their future.
“And we have to ensure that there aren’t more Carillions on the horizon. That means an immediate risk assessment of all large outsourcing firms with government contracts. Public services are already under pressure, and can’t take another hit like this.”“And we have to ensure that there aren’t more Carillions on the horizon. That means an immediate risk assessment of all large outsourcing firms with government contracts. Public services are already under pressure, and can’t take another hit like this.”
The Treasury have created a little video to show how they’re helping Britons cope with inflation:The Treasury have created a little video to show how they’re helping Britons cope with inflation:
Stats out today show #inflation was 3% in December. We’re helping families with the cost of living by ✂️ cutting taxes, ❄️ freezing fuel duty and 💷 increasing the National Living Wage ☟ pic.twitter.com/FFbGDgw70yStats out today show #inflation was 3% in December. We’re helping families with the cost of living by ✂️ cutting taxes, ❄️ freezing fuel duty and 💷 increasing the National Living Wage ☟ pic.twitter.com/FFbGDgw70y
No mention of the public sector pay cap, though, or the surge in import costs cause by the weak pound....No mention of the public sector pay cap, though, or the surge in import costs cause by the weak pound....
Getting back to Carillion....and the Bank of England has reassured MPs that Britain’s financial system won’t be shaken by the firm’s collapse.Getting back to Carillion....and the Bank of England has reassured MPs that Britain’s financial system won’t be shaken by the firm’s collapse.
Sam Woods, deputy governor for prudential regulation, told the Treasury committee that he has checked banks and insurance groups’ exposure to Carillion on Friday - as it tried (in vain) to reach a rescue deal with its creditors.Sam Woods, deputy governor for prudential regulation, told the Treasury committee that he has checked banks and insurance groups’ exposure to Carillion on Friday - as it tried (in vain) to reach a rescue deal with its creditors.
Woods said:Woods said:
“The direct exposures are entirely manageable across all institutions.”“The direct exposures are entirely manageable across all institutions.”
It’s harder to tell what the full impact will be, though, as smaller firms (such as Flora-tec and Van Elle) count the cost.It’s harder to tell what the full impact will be, though, as smaller firms (such as Flora-tec and Van Elle) count the cost.
Woods saysWoods says
“Will there be a wider indirect issue with all the suppliers?... That is a more difficult one. I am not massively worried about it.”“Will there be a wider indirect issue with all the suppliers?... That is a more difficult one. I am not massively worried about it.”
Aberdeen Standard Investments chief economist Lucy O’Carroll warns that inflation will only fall slowly this year:Aberdeen Standard Investments chief economist Lucy O’Carroll warns that inflation will only fall slowly this year:
“Today’s headline number doesn’t amount to a hill of beans in isolation. But it’s more interesting in the context of what’s been happening with inflation lately. It appears to be steadying around 3%, and could stay close to this level for the next few months.“Today’s headline number doesn’t amount to a hill of beans in isolation. But it’s more interesting in the context of what’s been happening with inflation lately. It appears to be steadying around 3%, and could stay close to this level for the next few months.
Looking a little further into 2018, inflation is likely to drift down gradually as the rise in prices caused by the pound’s decline falls out of the numbers.Looking a little further into 2018, inflation is likely to drift down gradually as the rise in prices caused by the pound’s decline falls out of the numbers.