Unite call to help firms result

The business minister Greg Clark has pressured banks into extending credit to firms left at risk by Carillion’s collapse, following an intervention from Unite.

The union is also calling on the government to provide direct financial support for sub-contractors and Carillion’s supply chain.

Unite leader Len McCluskey asked Clark during a meeting last night to compel high street lenders into providing assistance to firms affected by the Carillion fallout.

In an interview with the BBC this morning (January 17), McCluskey said, “I spoke to Greg Clark last night and said he must get the banks to come out and indicate that they understand there’s an element of flexibility needed to support companies during this difficult period.”

During prime minister’s questions today Theresa May revealed that Clark had indeed just finished an emergency round table with the banks “to discuss credit lines”.

UK banks are now implementing measures to help small and medium businesses at risk from the Carillion fallout, according to the banking trade body UK Finance.

The body’s commercial finance director, Stephen Pegge, said, “UK banks and the government are working closely to make sure the impact of the Carillion liquidation on SMEs in the supply chain is understood and managed in a way that best supports those in need of assistance.

“Lenders are contacting customers and, where appropriate, are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers to ensure those facing short term issues can be helped to stay on track.”

Unite assistant general secretary Gail Cartmail said the move offers “welcome temporary relief” that will help create some stability.

‘One in every pound’

But she made clear that more needs to be done to financially assist firms “who face getting back just one penny in every pound they were owed by Carillion”.

Since Carillion was placed into liquidation on Monday it has emerged that the company owed in excess of ÂŁ1bn to 30,000 subcontractors but had just ÂŁ29m in its accounts.

Two investigations has been launched into the behaviour of the company, including into the actions of its current and former directors – who have now had their salaries and financial benefits stopped.

Cartmail said, “The government has a moral duty to provide direct financial assistance as well as other support in order to ensure that sub-contractors and suppliers don’t needlessly go to the wall, with thousands of workers potentially losing their jobs.”

Unite is also calling on construction clients to take action to minimise the damage suffered by sub-contractors, by ensuring that contracts are restarted as swiftly as possible and that sub-contractors previously employed on stalled sites are guaranteed work when construction projects are restarted.

Around 90 per cent of Carillion’s cleaning and maintenance clients in the private sector have told the Insolvency Service they will retain and pay staff contracted or employed by the firm while liquidation takes place.

Uncertainty for construction workers

There is less certainty for Carillion construction workers, however. Work on building sites has been “paused”, the Insolvency Service said, “pending decisions as to how and if they will be restarted”.

Cartmail said, “Construction clients were happy to accept the lowest bids tabled by Carillion and now have a moral imperative to ensure that the damage done to sub-contractors as a result of these actions, is minimised.

“If decisive action is not taken by the government and clients, then thousands of workers employed by sub-contractors and in its supply chain face losing their jobs, with vital skills and expertise being lost from the industry.”

Meanwhile, contracting firm Interserve and the government issued separate statements denying the firm was in financial difficulties – following reports it was being monitored by the Cabinet Office.