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Thomas Cook Customers

Part of the debate – in the House of Commons at 1:24 pm on 5th November 2019.

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Photo of Andrea Leadsom Andrea Leadsom The Secretary of State for Business, Energy and Industrial Strategy 1:24 pm, 5th November 2019

I am glad that the hon. Gentleman recognises the Government’s efforts, particularly on the repatriation of customers stranded overseas and, of course, in the work, which I know through chairing the Government taskforce, to try to ensure that we get the best possible arrangements for Thomas Cook staff. He asks why the Government did not bail out Thomas Cook. He will be aware that, according to court reports, there was about £1.9 billion of debt on Thomas Cook’s balance sheet. It did approach Government looking for a loan facility of up to £250 million, but it is clear that, had the Government put that significant sum of taxpayers’ money into Thomas Cook, we would have ended up in the same position as we are in today. We would have had to repatriate those customers. We would have to have done exactly as we have done, but the taxpayer would have been £250 million worse off, so it was not an appropriate use of taxpayers’ money. It is very sad that Thomas Cook went bust, but it is not right that Government should just bail out every business. Businesses need to stand on their own two feet.

The hon. Gentleman made some very important points about regulation. I can tell him that I wrote to the Financial Reporting Council asking it to prioritise as a matter of urgency consideration of an investigation into the audit of Thomas Cook’s 2018 accounts, as well as the conduct of its directors. He asked why the Government did not foresee this.

It was never envisaged that a UK tour operator would fail to insure itself fully to cover claims for personal accident or fail to ensure that it had ring fenced the funds to meet those liabilities so that they were safe if the company got into difficulty. The company has a legal obligation to cover personal injury claims arising from package holidays abroad, and that is why I have asked the official receiver to investigate, in particular, this aspect of the conduct of Thomas Cook’s directors.