FEARS FOR 43,000 JOBS AT GIANT FIRM Fight for house of cards’ Carillion
THERESA May is believed to be resisting a taxpayer bailout for HS2 building giant Carillion – which faces collapse with the loss of 43,000 jobs.
Unions want her to underwrite the crisis-hit firm’s £1billion debts to avoid a “house of cards” fiasco which could hit firms contracted to Carillon, risking thousands more jobs.
The government contractor also manages 50,000 homes for the Ministry of Defence, provides school and hospital meals, cleans prisons and runs Department of Transport and Network Rail road and rail contracts.
Manuel Cortes of the TSSA rail union said: “Our nation’s vital infrastructure projects cannot be allowed to collapse with Carillion.
“The Government must step in to ensure that jobs and skills are protected.”
A Unite spokesman: “This is mammoth and the Government really needs to be on the ball and take contracts in house because it would be like a whole house of cards going down if the worse comes to the worse.
“We can’t have subcontractors left out of pocket, which would lead to lay offs.”
Lenders are believed to have rejected a rescue plan for Carillion, the UK’s second biggest construction firm, employing 43,000 globally, including 19,000 in the UK. Its share value fell nearly 30 per cent on Friday.
Plans
Ministers have already made plans to take over prison contracts worth £200million.
The Government said it was “monitoring the situation closely”. A spokesman said: “We are committed to a healthy supplier market and work closely with key suppliers.”
But LibDem leader Sir Vince Cable warned against bailing out the company. He said: “They’ve got to force the shareholders and indeed the creditors, the big banks, to take losses, and then the Government can take responsibility for taking the contracts forward and making sure they are delivered.”
And Mrs May is believed to be against a taxpayer handout for the company.
Administrator firms PwC and EY are believed to have been put on standby.
Ministers have faced criticism that Carillion has continued to win government contracts despite its woes. Only in July the firm bagged a £1.34billion HS2 railway contract.
Shadow Cabinet Office minister Jon Trickett said: “It has been clear for months Carillion has been in difficulty but the Government has continued to hand over contracts, even after profits warnings.
“Labour urges the Government to bring public-sector contracts back in-house to protect employees, pensions and taxpayers.”
The firm – which also has a £587million pension deficit – said talks with lenders about a new financing deal were continuing.