Transport secretary defends government over Thomas Cook collapse

Transport secretary Grant Shapps has defended the government amid claims that it failed to act ahead of the collapse of Thomas Cook.

He was responding to criticism from opposition MPs during a debate in Parliament yesterday (Thursday).

Scottish National Party MP Peter Grant asked: “Will he now accept that if the government had engaged sooner with Thomas Cook, they could have mitigated the impact of this failure, fewer people would have lost their jobs, the cost to the taxpayer would have been less and fewer people would have seen their holidays ruined?”

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Shapps said that assertion was “simply not correct” and revealed that he met Thomas Cook chief executive Peter Fankhauser on September 9 – two weeks before the travel group folded.

“My closing words to that company and to the chief executive were: ‘If there is anything that Her Majesty’s government could do then please get in touch’. The response was: ‘There is nothing that can be done at this time’.

“Later, on 18 September, he wrote to the government asking for not the £200 million that has been reported, but up to £250 million.

“That decision would have required accounting officer sign-off for a company with debt of perhaps £1.7 billion or, we now hear, perhaps even £3 billion,” Shapps said.

“It simply would not have stacked up. We would have spent all the money that has been spent on repatriation in any case, as well as money to bail out a company that had enormous debts.”

Shapps said: “Now that the repatriation of those Thomas Cook passengers is complete, my focus is on the next steps, including the announcement in the Queen’s Speech that the airline insolvency review will be turned into an Act of Parliament.”

But Labour shadow transport minister Karl Turner attacked the government for letting down Thomas Cook staff.

“They lost their livelihoods while the gaffers got rich off their bonuses,” he said.

“The subsidiaries Condor in Germany, Thomas Cook in Spain and Thomas Cook in Sweden are still flying. The government have stood by and let the business in the UK fail. When the secretary of state gets to his feet, will he just say sorry for letting down all those hard-working staff and the British taxpayer?”

Shapps responded: “If there was any possible way to ensure the survival of a company whose directors were allegedly being paid millions of pounds – it is interesting to hear that the Opposition want us to have backed those millions of pounds of bonuses with yet more money from the public purse – we would have done it but, as I said, it would have required accounting officer direction, because it simply did not stack up.

“The reality is that Hays Travel has come in and rescued many of those jobs, because well-run companies survive. Poorly run companies cannot survive.”

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Government accused of ‘inertia’ ahead of Thomas Cook collapse

He told MPs that Thomas Cook’s Atol coverage will cover a “large proportion of the cost” of the repatriation of Thomas Cook holidaymakers in the two weeks after the company’s collapse last month – estimated at £100 million.

“However, the company was an airline as well as a travel company and airlines are not currently covered under Atol – that is part of the review. In any case, we will ensure that laws are in place to make sure that the fleet can be used regardless,” Shapps added.

Following the debate, United assistant general secretary Diana Holland accused Shapps and the Department for Transport as being “directly responsible for failing to ensure that Thomas Cook’s profit making airline was supported and could continue to fly”.

She said: “It is clear there were multiple government failures in reacting to the problems at Thomas Cook, but in particular Shapps did not understand his brief on airline insolvency and keeping the airline flying when the company was allowed to collapse and he is still in denial of the facts.

“The workers in the airline, who were absolutely dedicated to providing a first class service to customers, deserved and should have expected to be treated far better than this.

“It is absolutely essential that Grant Shapps is held fully to account for the governmental failures which allowed a company to collapse and thousands of workers to needlessly lose their jobs in the shocking way that it happened in the early hours of 23 September.”

Holland had previously attacked ministers of “inertia and inaction” ahead of the company’s failure.  


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