Taxpayer faces £60m staff bill
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 £100 million estimates for the biggest repatriation in living memory of 150,000 holidaymakers when the firm went bust last month.
Prior to the collapse, Thomas Cook had asked the government for a £200 million loan, but ministers declined, concerned it would set an unhealthy precedent.
Bosses then claimed they had found the funding but on the proviso that the government would act as a guarantor against the loan. Again ministers declined. Around £18 million has already been paid to staff, according to the Transport Salaried Staffs Association union, by the Insolvency Service from taxpayer funds.
The £60 million figure was calculated by the PA news agency following conversations and analysis with industry insiders.
The statutory limit for redundancy payments is £525 a week. Insiders say the average payment for staff is eight weeks, meaning the amount is likely to be £40 million for the 9,500 workers.