‘Government must help’
MPS across the North East urged the government to protect jobs, pensions and major construction projects following the collapse of Carillion, writes JONATHAN WALKER.
Ministers also faced questions about the decision to continue giving contracts to Carillion, one of the UK’s largest construction companies, after it issued a warning in July 2017 that profits would be lower than expected.
Newcastle upon Tyne East MP Nick Brown said the government should ensure the redevelopment can go ahead. He said: “There is a need for government support for Sunderland local authority, to step in to the Carillion Sunderland city partnership on the Vaux Brewery site. Sunderland council should be given central government support to carry forward the Vaux Brewery joint project.”
A spokesperson for Sunderland City Council said: “The council has been notified by Carillion’s liquidator that building work on Vaux Phase One has ceased with immediate effect. The council is in discussions with Carillion and liquidators PricewaterhouseCoopers regarding next steps and to ensure that work is resumed and the Phase One building is delivered as soon as possible.”
Mr Brown also called for an inquiry to discover why the government signed new contracts with Carillion worth £2billion after the company issued a profits warning.
The government has confirmed that eight contracts were signed after the July 2017 warning.
Newcastle Central MP Chi Onwurah urged the Government to protect jobs and said Eaga had been a successful business before Carillion acquired it.
She said: “Eaga was a Newcastle-based, profitmaking company – partly owned by its employees – until Carillion took it over and started to run it down. The government urgently needs to act to safeguard jobs in Newcastle and elsewhere.”
North West Durham MP Laura Pidcock said: “We must protect jobs, terms and conditions and pensions as a priority. Also need certainty from Government over how long jobs will be secured and funded.”
Cabinet Office Minister David Lidington said it would be wrong for the government to spend taxpayers’ money.
He said: “It is regrettable that Carillion has not been able to find suitable financing options with its lenders and I am disappointed that the company has become insolvent as a result. It is however the failure of a private sector company and it is the company’s shareholders and its lenders who will bear the brunt of the losses: taxpayers should not and will not bail out a private sector company for private sector losses or allow rewards for failure.”