Carillion’s sub-contractors and suppliers need protection, not the banks

SIR – To minimise bankruptcies and the destruction of smaller businesses, the Government should instruct the administrators to pay Carillion’s sub-contractors and suppliers rather than seize all incoming cash to recompense banks for their ill-advised lending.

The financial collapse of 2008-9 was worsened by banks withdrawing support from viable businesses, demanding repayment when that could only mean destruction of a business. Often these were builders, where banks were financing a “land bank” – enterprises now desperately needed to build homes.

JG R Rix

Bordon, Hampshire

SIR – As the owner of a small company for 45 years, supplying fabric to textile manufacturers (an industry notorious for slow payment and bad debts), I have little sympathy with suppliers being prepared to allow Carillion up to 120 days credit terms.

It is not proper trading when suppliers are effectively providing cash-flow finance and working capital to their customers.

The two rules of business are: Rule 1 Make sure to be paid;

Rule 2 Remember Rule 1. Ian R White

Morecambe, Lancashire

SIR – A crippled company still has an estimated open market value, maybe low or zero. If Carillion is vital to national interests, the Government can forcibly buy it, ie bring about nationalisation.

It can be recapitalised, reorganised and if necessary re-floated later. Yet I have not heard nationalisation mentioned on television, when it is clearly an option. Why? Is it taboo? Nick O’gorman

Kingston upon Thames, Surrey

SIR – Quite correctly, the Government has let Carillion fail. Surely the NHS should be next. Graham Bellinger

Walton-on-thames, Surrey SIR – Trading when insolvent is a criminal offence. Why did the Government give huge contracts to Carillion after three profit warnings? Adam Westlake

Farnham, Surrey

SIR – The liquidation of Carillion is the perfect opportunity to review many public-sector infrastructure projects. Heading the list should be cancellation of the unnecessary HS2 project. David Peddy

Oxford

SIR – Outsourcing government building maintenance contracts to the private sector in the mid-nineties was a costly mistake, as was its partner PFI.

I look forward to the Government returning to the guaranteed, costeffective provision of in-house control and management that pertained in the former Ministry of Public Buildings and Works, and its successor the Property Services Agency. Ken Orme

Bootle, Lancashire