Carillion workers get wages lifeline
WORKERS on most private sector contracts held by failed construction company Carillion will continue to be paid, while bonus payments to directors and former executives have been stopped.
The developments came as the Government urged banks to deal “swiftly and sympathetically” with small firms caught up in the crisis.
Unions reported cases of workers being laid off across the country as a number of construction projects were stopped, with no certainty over when work would restart.
The Insolvency Service said 90% of Carillion’s private customers have indicated they want it to carry on providing services until new suppliers can be found and will provide funding to keep employees on.
The Service also revealed that payments, including those included in severance packages for former executives, had been halted after the firm went into liquidation on Monday.
A spokesman said: “Any bonus payment to directors, beyond liquidation date, have been stopped and this includes severance payments which were being paid to some senior executives who left the company.”
At Prime Minister’s Questions, Labour leader Jeremy Corbyn lashed out at the “excessive” bonuses paid to directors.
The company’s interim chief executive revealed that Carillion had just £29 million in cash by the time it went bust, at a time when it was struggling under £900 million of debt and a £587 million pension deficit.
Mr Corbyn said the large salaries and bonuses paid to Carillion executives while the future of its 20,000 employees were put at risk showed there was “one rule for the super-rich, another for everybody else”.
In fiery exchanges, Mr Corbyn called on the Prime Minister to end the “costly racket” of contracting out public services to private businesses.
“These corporations need to be shown the door,” he said.
Mrs May retorted: “We’re making sure in this case that public services continue to be provided, that public service workers are supported and taxpayers are protected.
“But what Labour oppose isn’t just a role for private companies in public services, it’s the private sector as a whole.”
The Official Receiver has powers to recover “unlawful or unjustified” payments made to Carillion executives, she said.
A spokesman for the Insolvency Service said all of these companies had been contacted over the past 48 hours, adding: “Over 90% of these customers have indicated that they want Carillion to continue providing services in the interim until new suppliers can be found and will provide funding which enables the Official Receiver to retain the employees.
Business Secretary Greg Clark met high street banks to urge support for small businesses.
Unite leader Len McCluskey said the Government had a “moral duty” to provide direct financial assistance to sub-contractors and suppliers.