Tag Archives: carillon

How to prevent a repeat of the Carillion catastrophe

Whenever a rather technical public policy question pokes its nose out into the wide world of mass public interest a vacuum is created, a vacuum quickly filled with a gamut on nonsense and conspiracy theory.
 
The collapse of the Carillion has prompted just such fits of hysteria, but while I don’t particularly care that a private company has gone out of business, the issue of the pension fund liabilities is one that will recur many more times for policy makers in the UK as a direct consequence of economic policies pursued since 2007.
Posted in Op-eds | Also tagged | 40 Comments

Vince Cable on Carillion: Shareholders are going to have to take a hit

Vince has been speaking about the Carillion crisis. The FT reports:

The Lib Dem leader’s intervention suggests the crisis at Carillion is about to become highly political; Sir Vince claimed last November that the government was “feeding” contracts to the company to try to keep it alive.

On Friday lenders to Carillion dismissed the company’s rescue plan and urged Downing Street to intervene.

But ministers will face fierce political criticism if they have to bailout a company which continued to receive major public contracts — including on the HS2 high speed rail line — after it issued a profit warning last July.

The government would also have to comply with EU state aid rules, but Sir Vince said that in the first instance the private sector should take a hit.

“The shareholders of the company are going to have to take a loss,” he told the BBC. “The creditors, the big banks who hold most of this debt, will have to write off some of it, perhaps replace some of it with shares.” 

You can watch his BBC interview here.

He’d earlier said on Twitter:

Posted in News | Also tagged and | 26 Comments
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