Cable fends off criticism on City Link
ViNCe Cable was forced to defend his lack of action over the collapse of courier firm City link last night after political opponents rounded on the business secretary.
Cable, pictured, faced criticism from labour’s shadow Business Secretary Chuka Umunna MP when it was revealed City link owner – private equity firm Better Capital – told Cable’s department about its dire situation two days before it went in to administration.
Umunna wrote to Cable on Monday demanding to know why an attempt to broker a rescue deal had not been made given that taxpayers’ money will be used to pay the redundancy bill.
But last night Cable, speaking to the Daily Mail, said: ‘There is not a great deal the government can do. i have done all that i could have done in the circumstances.’
He confirmed Better Capital informed the depart- ment on December 22 of the situation but said: “They informed us but they did not ask for help. We were willing to engage.’
Better Capital founder Jon Moulton said that nobody from the ministry had made any request to meet the company when they informed it of the situation. Umunna also questioned why Cable had not previously met the company or employee representatives. The RMT union had called for government to rescue the business and accused City link’s owners of a “horrific catalogue of mismanagement”. But Cable said he held a ‘ constructive telephone conversation’ with RMT union general secretary Mick Cash on Monday,
Cable said that he was awaiting an assessment from the administrators who are ‘ actively exploring all options to secure the best outcome given the circumstances’.
He said the he had ‘agreed to keep in regular contact’ with the union.
abd he added: ‘This is a deeply concerning time for the City link workers and their families. i’ve been ke e pi ng close to developments.’
More than 3,000 jobs are at risk and administrator eY said ‘ significant redundancies’ will take effect today. Workers at the firm, many of whom learned of the company’s collapse on Christmas Day, now expect more than 2,000 jobs to be lost.
Cable said he was in ‘constant touch’ with his department. asked if he was away skiing in europe, Cable said he was on a short break and away for ‘only a few days’, and said he will return after the new year.
Umunna also highlighted the collapse of electrical retailer Comet two years ago when Cable promised a wider review of the process of when businesses enter administration.
at the time Cable said: ‘The american chapter 11 system may well be better and i want to have a proper look at that. i also want to review more broadly whether we can adopt better practices across the piece.’
Better Capital bought the loss-making parcel delivery firm for £1 from pest control business Rentokil and tried to turn it around. it made a secured loan of £40m to the business, rather than invest its own money ‘to protect its interests’, and as a secured creditor it could still recover tens of millions of pounds despite City link’s demise.