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Carillion liquidation: Jeremy Corbyn attacks ‘rip-off' privatisations as workers face uncertainty - as it happened

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Labour leader says Carillion crisis is a ‘watershed moment’ for UK public services, as government ministers discuss their next step

Earlier:

 Updated 
Mon 15 Jan 2018 18.23 ESTFirst published on Mon 15 Jan 2018 02.08 EST
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Jeremy Corbyn: Carillion is a watershed moment

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Finally, some 16 hours after Carillion went into liquidation, here are the other front pages:

Tomorrow’s @telebusiness front page: Counting the cost of Carillion’s collapse pic.twitter.com/yYeoKoADvV

— Ben Wright (@_BenWright_) January 15, 2018

Tuesday's i
"Taxpayers take the hit on Carillion"#tomorrowspaperstoday#bbcpapers
(via hendopolis) pic.twitter.com/BtF42zUI9S

— Melanie Carney (@MsMelanieCarney) January 15, 2018

INDEPENDENT DIGITAL: Carillion faces inquiry into bosses’ £4m bonuses #tomorrowspaperstoday pic.twitter.com/GDLFtdFB5Z

— Neil Henderson (@hendopolis) January 15, 2018

DAILY MIRROR: Yet again you pay #tomorrowspaperstoday pic.twitter.com/2N71bFUXJb

— Neil Henderson (@hendopolis) January 15, 2018

That’s all for tonight. Good night! GW

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Full story: Some Carillion face pay being stopped in 48 hours

Time for a recap.... so here’s our latest news story on Carillion, by Rob Davies and Dan Sabbagh:

Thousands of staff who worked for the collapsed construction firm Carillioninside private-sector companies will have their wages stopped on Wednesday unless their jobs are rescued by other firms, the government has said.

Experts also said up to 30,000 small firms are owed money by Carillion, which crashed into liquidation on Monday morning, with insolvency practitioners reporting an immediate spike in calls from worried business owners.

Ministers were holding an emergency meeting on Monday night in an effort to limit the damage caused by the collapse of the the sprawling construction and support services business.

As the fallout spread, the Cabinet Office minister, David Lidington, faced mounting pressure over the government’s oversight of the firm’s increasingly precarious finances in the months leading up to its failure.

Lidington told parliament the government would continue to pay those among Carillion’s 19,500 UK staff who work in public sector jobs, such as NHS cleaners and school catering.

But he admitted thousands of Carillion’s private sector workers – who perform jobs ranging from cleaning to catering, security and postroom services to organisations such as Nationwide building society and BT Openreach – would be cut loose after 48 hours.

“The position of private sector employees is that they will not be getting the same protection that we’re offering to public sector employees, beyond a 48-hour period of grace,” Lidington said.....

Carillion fallout deepens as workers face pay being stopped in 48 hours https://t.co/JIcP7XO48g

— Guardian Business (@BusinessDesk) January 15, 2018

I’ll try to pop back later when tomorrow’s front pages hit the digital newsstands.....

The Daily Mail is focused on the news the Official Receiver will probe Carillion’s bosses pay.

It has singled out several examples of ‘fat cat’ remunerations, including:

Richard Howson, who headed the company from 2012 until July 2017, pocketed £1.5 million in 2016 - including a £122,612 cash bonus and £231,000 in pension contributions.

As part of his departure deal, Carillion agreed to continue paying him a £660,000 salary and £28,000 in benefits until October - even though he left the company for good last autumn after a brief spell as an adviser.

Former finance chief Zafar Khan, who left Carillion in September, will receive £425,000 in base salary for 12 months.

And Interim chief executive Keith Cochrane will be paid his £750,000 salary until July, despite leaving the company in February. He was not at the company when the rules governing bonuses were relaxed.

More here.

The Daily Telegraph is reporting that Carillion owes around £1bn to around 30,000 UK firms, which would put “thousands of jobs and pensions at risk”. More here.

Jeremy Corbyn’s punchy attack on Public Finance Initiative contracts will intensify the pressure on government ministers to get a firm grip on the Carillion situation.

Especially as thousands of smaller companies are still grappling with the consequences of the biggest, and most disruptive, UK corporate failure in years.

The Financial Times says that recriminations are already flying, as experts predict serious repercussions:

“The fallout from this could be horrendous,” said Rudi Klein, chief executive of the Specialist Engineering Contractors’ Group.

“The domino reverberations as it travels down the supply chain could be unprecedented.”

There are alarming signs tonight that some Carillion contractors may already be cutting staff.

My colleague Simon Goodley explains:

A worker on the new Midland Metropolitan hospital building told the BBC: “Everyone on the site got told: ‘That’s it, go home’. My company said, ‘You’ve been laid off’.”

“They’ve literally locked the gate. They’ve told us we can get our personal tools off the site if they’re small, but that’s it.”

More here:

Corbyn: Carillion collapse is 'watershed moment' for PFI

Labour leader Jeremy Corbyn is calling for fundamental changes in the way public services are delivered in the UK, following the liquidation of Carillion.

In a video message, Corbyn vowed to end the “PFI rip-off”, end the dogma that “private-profit-is-best” and run Britain’s public services “for the benefit of the many, not the profits of the few”.

The Opposition leader says:

In the wake of the collapse of the contractor Carillion, it is time to put an end to the rip-off privatisation policies that have done serious damage to our public services and fleeced the public of billions of pounds.

This is a watershed moment.

Jeremy Corbyn on Carillion

In the two-minute statement, Corbyn cites the “£2bn public bailout of Richard Branson’s Virgin and Stagecoach for their own failure to run East Coast rail properly”, as further proof that outsourcing is a flawed model.

He continues:

“Staff and patients in our NHS are facing shocking conditions this winter. Tory underfunding has caused the crisis, but privatisation, outsourced contracts and profiteering has made it worse.

“Our public services – health, rail, prisons, even our Armed Forces’ housing – are struggling after years of austerity and private contractors siphoning off profits from the public purse.

“It’s time we took back control. We not only need to guarantee the public sector takes over the work Carillion was contracted to do – but go much further and end contracts where costs spiral, profits soar and services are hollowed out.

Jeremy Corbyn says the collapse of #Carillion is a “watershed moment”, adding: “it is time to put an end to the rip-off privatisation policies that have done serious damage to our public services and fleeced the public of billions of pounds."

— Andrew Gregory (@andrewgregory) January 15, 2018
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Lord Lawson in 2017
Lord Lawson in 2017 Photograph: Parliament TV

Over in the House of Lords, a former Conservative chancellor has backed calls for an inquiry into Private Finance Initiative (PFI) contracts in the aftermath of Carillion’s demise.

Lord Lawson told fellow peers he “refused to have anything to do with it [PFI]” when in office in the 1980s even though Treasury officials were keen on it.

PA has more details:

Subsequent chancellors, especially Labour’s Gordon Brown, were “enthusiastically in favour of it”, Lawson continued, because it enabled ministers in the short term to “dress up” considerable amounts of public expenditure off the public sector balance sheet.

He said this was not a good reason for something which did not give good value for money for the taxpayer and introduced “a degree of moral hazard which we see very much in the Carillion affair”.

Lord Lawson said it was important to “take stock and decide whether the whole PFI initiative should be proceeded with any further” because there was enough evidence to show it was not good value for money or sensible for the taxpayer.

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