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Carillion crisis: Unions call for national taskforce as ministers demand 'fast-track' probe - live updates Carillion crisis: Unions call for national taskforce as directors face 'fast-track' probe - live updates
(35 minutes later)
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.
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 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”.
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.”
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:
“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-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.