The TUC say the government must protect jobs, transfer workers to new providers, bring contracts back in house, and urgently check the health of the rest of the sector.
Lloyds: We'll make £50m available. RBS: Make it £75m from us. HSBC: We'll do £100m. Santander: We're in but won't say how much. Barclays: We'll "look at" helping on a "case by case basis".
This includes providing payment holidays and assistance with their overdraft, for customers whose cashflows have been wrecked by Carillion’s liquidation.
The bank (majority owned by the taxpayer) says:
We have over £75m available to support impacted small businesses and will make more finance available if required to top up this fund. We will also support our Commercial customers on a case-by-case basis with their individual requirements.
We have a proactive, principles-based approach that allows us to assist our customers when there are unexpected external circumstances. This support is available to customers banking with NatWest, Royal Bank of Scotland and Ulster Bank in Northern Ireland.
Les Matheson, CEO for Personal and Business Banking at RBS, is encouraging customers to get in touch if they need help.
The UK government is being pressed to explain why a funding shortfall at Carillion’s pension scheme was allowed to widen before the construction group’s collapse.
Opposition politicians have written to the government and to the UK Pensions Regulator asking a series of questions about the shortfall, which nearly doubled from £317m in 2015 to £587m at the end of 2016.
About 28,000 members of Carillion’s 13 pension schemes face cuts to their retirement benefits, as payment of their pensions is taken over by the Pension Protection Fund, the industry fund that supports members of collapsed company schemes.
Accountancy firm Blick Rothenberg say the UK tax authorities could help small businesses hurt by Carillion’s collapse.
The UK tax rules allow companies to claim VAT relief on unpaid bills -- but only six months after the money was due. Carillion made some suppliers wait 120 days for payment, so in a worst-case scenario a supplier might face a 10 month wait before they can reclaim VAT from the government.
Daphne Hemingway, VAT Partner at Blick Rothenberg, says the
“In this instance, perhaps HMRC should also look at reducing the wait time for obtaining a VAT refund, especially as the government is trying to get large corporations to deal more fairly with small and medium sized businesses when it comes to the payment of bills.
Labour MP Pat McFadden is trying to get to the bottom of how Carillion lurched into liquidation on Monday morning.
He’s asked business secretary Greg Clark to answer 10 questions -- including how much the crisis will cost the taxpayer, and what discussions went on behind the scenes in recent weeks as Carillion tried to stay afloat.
McFadden says:
“We know that Carillion sought financial help from Government as it sought to put together a rescue package in recent weeks.
It is essential that we know what exactly the company was asking for and how the cost of that compares to the potential costs facing the taxpayer from liquidation.
Here’s the full list of questions:
Press reports indicate that the court statement lodged by Carillion CEO Keith Cochrane says that the company made at least one if approach if not more to the Government seeking financial help. (a) How many approaches did the company make in recent months? (b) When did they take place and what sums of money were discussed?
How much was Carillion seeking from its lenders in the discussions which took place before liquidation?
Was there any discussion between the Government and Carillion’s banks about what would be needed from Government to avoid liquidation? If so, what was the sum of money being requested from Government?
Was there an estimate made of the cost to the public purse of unwinding the business, the impact of liquidation on Carillion’s thousands of sub-contractors, sorting out and re-tendering or selling the existing contracts and all the other associated costs which will now have to be paid? Again, if there was an estimate of these costs given to Ministers before the company went into liquidation, what was the figure involved?
Did the Government make a comparison between the cost to the public purse of any financial help the company may have been seeking and the cost to the public purse which would arise from liquidation?
Why was liquidation chosen as the path for wind up rather than administration? Did the Government make a cost comparison of these two options? If so, what were the estimates of the costs involved that the Government had before them?
When will the official receiver report on their investigation into corporate governance, including changes to the company’s renumeration scheme in 2016?
Did Ministers or officials meet with the company’s management and trade unions in the run up to liquidation? If so when and what was discussed?
Did the Government appoint financial advisors to help it make decisions about this matter? If so, who were they?
What process does the Government have in place for dealing with Carillion’s thousands of sub-contractors, given the potential of a domino effect from the company’s collapse?
Now the government, along with union leaders and business chiefs, must protect Carillion’s workers, maintain public services outsourced to the group, and provide a helping hand to small firms who are suffering losses.
The TUC says it will bring five demands to this afternoon’s task force meeting:
1) the transfer of private sector contracts to alternative providers with jobs, pay and pensions protected;
2) a comprehensive support package for at-risk workers, apprentices and small firms;
3) protection for agency and zero-hours workers on Carillion contracts to ensure they can recover unpaid wages;
4) bringing Carillion’s public-service contracts back in-house to ensure consistent delivery and certainty for workers;
5) an urgent risk assessment on other large outsourcing firms to avoid another crisis, and a moratorium on future outsourcing.
Fresh questions were raised about Royal Bank of Scotland’s conduct yesterday, when an internal memo showed how staff at its Global Restructuring Group had been encouraged to put customers under pressure.
Called “Just Hit Budget!”, the memo described struggling firms as “basket cases” and urged staff to give customers enough rope to “hang themselves”.
Conservative MP Stephen Kerr says RBS showed a “contempt for small firms”.
Kerr actually joined RBS as a 16-year old, and he’s disappointed that the bank’s reputation has fallen so low since.
He also blasts RBS’s current CEO, Ross McEwan, for blaming a “junior” manager for the Just Hit Budget! memo.
Kerr says:
Frankly, a junior bank manager would not have written this kind of document without understanding that it conformed to the culture of the business that they were operating in.
I”m afraid that the chief executive is condemned by his own justification, which frankly does not wash.
Comments (…)
Sign in or create your Guardian account to join the discussion