Carillion

Business, Energy and Industrial Strategy – in the House of Commons at 12:00 am on 13th March 2018.

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Photo of Gerald Jones Gerald Jones Shadow Minister (Defence) 12:00 am, 13th March 2018

Whether he is taking steps to safeguard the employment of people who were working under private sector Carillion contracts at the time of that company’s liquidation.

Photo of Alex Chalk Alex Chalk Conservative, Cheltenham

What steps he has taken to support and engage with businesses affected by the liquidation of Carillion.

Photo of Andrew Griffiths Andrew Griffiths Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The official receiver and special manager are working to ensure an orderly transition by facilitating the transfer of contracts. As of 12 March, 8,521 jobs have been safeguarded and 1,536 people have been made redundant, sadly, through the liquidation. My right hon. Friend the Business Secretary has set up a taskforce, bringing together trade associations, bankers and representatives of Government to ensure that we support the Carillion supply chain. The taskforce has delivered a range of supportive measures, including more than £900 million of support from UK lenders.

Photo of Gerald Jones Gerald Jones Shadow Minister (Defence)

Let me seek some further clarification. If there is any doubt that TUPE applies, can the Government confirm that they will instruct the official receiver to transfer employees on private sector contracts as if TUPE applied? Will the Government also ensure that trade union recognition is transferred with those staff?

Photo of Andrew Griffiths Andrew Griffiths Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I thank the hon. Gentleman for that question and refer him to the recent Westminster Hall debate, when we discussed at some length the legal responsibilities in relation to TUPE, which do not apply in many cases during a liquidation. Transferring employers may well decide to offer terms to transferring employees that recognise existing employment rights, terms and conditions. The Government are focused on ensuring that transferred employees are no worse off, and the official receiver is doing all he can to facilitate this wherever possible.

Photo of Alex Chalk Alex Chalk Conservative, Cheltenham

The Carillion collapse has exposed what can only be described as market abuse by lead contractors, with subcontractors in Cheltenham suffering as a result of the failure to adhere to best practice schemes such as the prompt payment code. What steps are the Government taking to ensure compliance with the schemes and more generally to stamp out market abuse?

Photo of Andrew Griffiths Andrew Griffiths Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My hon. Friend, who has met me on a number of occasions to defend the interests of businesses in his constituency, will know that the Government had two priorities: to protect the provision of vital public services and to do what we could to protect jobs in Carillion and jobs in the supply chain. We are clear that we must learn the lessons from the collapse of Carillion. This could be a catalyst for change for the good. We are concerned to ensure that we do all we can to learn the lessons on procurement, and we also want to do more to ensure that the supply chain is promptly paid and that small businesses are paid speedily. Looking at the prompt payment code is an important part of that.

Photo of Rachel Reeves Rachel Reeves Chair, Business, Energy and Industrial Strategy Committee

Following on from the question from Alex Chalk, when Carillion went bankrupt, many of the subcontractors had not been paid for 120 days. The money coming to Carillion was from the Government, so what are the Government doing to ensure that when they give contracts to big businesses, those businesses pay their subcontractors on time? Small businesses are the lifeblood of our economy and they have been destroyed by the collapse of Carillion.

Photo of Andrew Griffiths Andrew Griffiths Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I thank the hon. Lady for that question and particularly for the work that her Select Committee is doing in getting to the bottom of exactly what happened in Carillion. That is very important work. The Government are clear that with public sector contracts we pay in 30 days, and we expect tier 1 contractors to ensure that they pay their supply chain in 30 days too. We are determined to take action to ensure that this happens, and we are looking at what we can do to make sure not only that small businesses in the public sector supply chain get paid within 30 days, but that we do more to support private sector suppliers as well.

Photo of Henry Smith Henry Smith Conservative, Crawley

What support has been given to British nationals working abroad who were with Carillion?

Photo of Andrew Griffiths Andrew Griffiths Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The main priority for this Government has been to protect jobs here in the UK and the continuation of public sector contracts and services. The special manager, of course, has a responsibility to wind up the business to get the best value for creditors, but he is responsible for dealing with businesses overseas.

Photo of Eleanor Smith Eleanor Smith Labour, Wolverhampton South West

For the Carillion workers who were not transferred under TUPE, what was the degradation of their terms?

Photo of Andrew Griffiths Andrew Griffiths Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I have met the hon. Lady several times, and I know that she is working hard to ensure that her constituents employed by Carillion get all the protections possible. The Secretary of State has had conversations with the special manager to ensure that wherever possible when contracts are transferred employees get like conditions so that they are no worse off. As she will understand, this is a very complex and complicated business, and I do not at the moment have the specific statistics she requests.