Government disarray over Thomas Cook collapse exposed
- Wednesday 29 January 2020
A series of freedom of information (FOI) requests made by Unite, the UK and Ireland’s largest union, has exposed the disarray and the failure of two government departments to even examine alternative solutions prior to the collapse of Thomas Cook in September last year. As a result Unite is now calling for action to ensure greater openness and that lessons are learned.
Unite asked the same FOI questions of both the Department of Business Energy & Industrial Strategy (BEIS) and the Department for Transport (DfT) and received different and conflicting answers.
The responses to the FOI requests in particular highlights the government’s entirely inadequate response to support the highly profitable Thomas Cook airline which due to lack of government action was forced into liquidation with the rest of the company, with the loss of 4,000 jobs.
When asked when BEIS became aware of financial problems at Thomas Cook the department said: “As the lead department for Thomas Cook, DfT officially notified BEIS about financial problems at Thomas Cook on 11 September 2019. At the point DfT made us aware of the imminent collapse of Thomas Cook in September, BEIS became part of the cross-government handling of the issue.”
In response to further questions about when BEIS began to examine measures to help support the company and a question about when it began to take measures to deal with the collapse of the company and repatriate passengers it said: “BEIS participated in discussions with DfT and other government departments about ways to respond to the potential insolvency of Thomas Cook from 11 September 2019.”
However the responses from the Department of Transport was markedly different. The DfT said it became aware of problems at Thomas Cook “ahead of the publication of its year-end financial results in November 2018.”
When asked when did the DfT begin examining measures to help support the company, it replied: “Thomas Cook’s Directors wrote to the government on 18 September 2019 to request financial assistance of up to £250m. Given the financial issues the group faced, this would have been poor use of taxpayer’s money and would not have guaranteed that the group would have remained solvent.”
The DfT’s answer to the question of when it began examining measures to deal with the collapse of the company and the repatriation of its customers, was telling. It said: “The Department began examining contingency planning options for the eventual collapse of Thomas Cook in April 2019. An initial meeting was convened on 5 April 2019 which was attended by representatives from the CAA, the Department for Business Energy & Industrial Strategy (BEIS), Her Majesty’s Treasury (HMT) and UK Government Investments (UKGI).”
Therefore, the only measure that then transport secretary Chris Grayling MP took was to plan for the company’s collapse, with no effort made to disengage the profitable airline and keep it flying. While, the department of business was so disengaged they failed to even register when they first became involved in the matter.
The failure to assist the Thomas Cook airline is why Unite is calling for the government to implement the Airline Insolvency Review and the Insolvency and Corporate Governance Review at the earliest possible opportunity.
By implementing these measures which were first highlighted following the collapse of Monarch in 2017, airlines which went into administration could continue to fly, creating the opportunity of a rescue bid.
Similar rules already operate on the continent and were a major factor in ensuring that the Thomas Cook subsidiaries Condor (in Germany), Thomas Cook Scandinavia and Thomas Cook Balearics continued to fly following the parent company’s collapse.
Unite assistant general secretary Diana Holland: “Given such an inadequate, muddled and confused response it is little surprise that the government was unable or unwilling to prevent Thomas Cook collapsing into liquidation. The left hand literally didn’t know what the right hand was doing.
"That is why Unite is calling for greater transparency and the right for workers’ and trade unions to be informed and have a voice at the table.
“The one thing that is crystal clear is that so-called ‘failing’ Grayling has struck again. Even after leaving office his actions were still proving disastrous for the UK transport sector and resulted in a profitable airline being driven to the wall.
“The fact that the DfT allowed a profitable airline to collapse without any effort to keep it flying and preserve jobs demonstrates why we need new laws to prevent further needless airline collapses as soon as is humanly possible.
“The real victims of the government’s incompetence are the dedicated staff who lost their jobs and the hundreds of thousands of people who had their hard earned holidays ruined, delayed or disrupted.
“The BEIS select committee began examining the collapse of Thomas Cook prior to the general election and that good work must be continued and extended to the transport select committee, so the full truth behind this sorry mess is not only exposed, but action taken to prevent it ever happening again.”
Notes to editors:
- Grant Shapps refuses to apologise to Thomas Cook workers and remains in denial about government failures
For more information please contact Unite senior communications officer Barckley Sumner on 020 3371 2067 or 07802 329235. Email: email@example.com
- Unite is Britain and Ireland’s largest union with members working across all sectors of the economy. The general secretary is Len McCluskey.