Taxpayer lands £60m bill for redundancies

Taxpayers will have to stump up £60 million to fund unpaid wages, holiday pay and redundancy costs for Thomas Cook’s 9,500 staff following the travel firm’s collapse, according to early estimates.

The cost is in addition to the UK Government’s own £100m estimates for the biggest repatriation in living memory of 150,000 holidaymakers when the business went bust last month.

Thomas Cook had approached the government prior to the collapse, asking for a £200m loan to make up a shortfall in funding to avoid going bust, but ministers declined – concerned that it would set an unhealthy precedent.

Bosses then claimed they had found the funding on the proviso that the government would act as a guarantor.

Again, ministers said no, although the German government did fund Thomas Cook’s business in Germany.

Around £18m has already been paid to staff, according to the Transport Salaried Staffs Association union, by the Insolvency Service from taxpayer funds.

But Thomas Cook workers are concerned they could be waiting several months to receive the full amount they are owed.

Manuel Cortes, general secretary of the Transport Salaried Staffs Association, said he had been told by the liquidators that they have now processed 99% of the 5,000 claims they have received for redundancy payments.

British Airline Pilots Association (Balpa) general secretary Brian Strutton told PA: “Staff at Thomas Cook have been left high and dry by the directors.

“It is they who ran down cash so far that there isn’t even any left to pay wages owed, but did find the cash to keep the German airline, Condor, open for several days until the German government stepped in with some financing.”