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Monday, 15 January 2018

Carillion - Tories In Deep Shit

While the more downmarket end of our free and fearless press has been binging on Sleb cheapies, out there in the real world what Sailor Heath once called “The unacceptable face of capitalism” has been manifesting itself as construction and service company Carillion has been forced into liquidation by lenders who had lost patience and concluded that, no matter how long they waited, they were not going to get their money back.
Or maybe not

The effect was immediate: train cleaners, who get around their patch using vans supplied by Carillion, found their fuel cards had been cancelled. They have to either pay for filling up out of their own pockets or the trains don’t get cleaned. The company’s pension fund has a deficit of around £580 million. And the value of what can be liquidated is so little as to mean most shareholders will see very little of their money.

However, and here we encounter a significantly sized however, despite a financial situation  that has been parlous for some time now, Carillion kept on paying shareholder dividends, so those not seeing their share capital returned have at least had their regular divi. Those were not the only dividends being paid: directors’ bonuses kept on being doled out, and the “clawback provisions” for these were relaxed in 2016.
That means Carillion’s directors got their extra wedge, safe in the knowledge that no-one could come and tell them to put the dosh back in the kitty. Even the Institute of Directors has cavilled at that move, frothing “It does no good to the reputation of UK business when top managers appear to benefit in spite of the collapse of the organisations that they are responsible for”. The tens of thousands facing the dole might not be impressed, either.

It is suspected that Carillion submitted unrealistically low bids for Government contracts to keep the workload up, but the combination of bidding too low and failure to keep control of costs meant that this practice just made matters worse. And there was more.
George bricking it big time

Despite the profits warnings, the Government just kept on awarding the firm work. And it is that which put the Tories on the spot. As they have been in office, either in coalition or alone, for more than seven and a half years, they have no credible way of blaming anyone else for the current mess. They slavishly followed the false god of “Private Good, Public Bad”, only to see it come back and bite them. This is their can to carry.
Quite

And there is no avoiding complicity: attracting deserved ridicule today has been the why-oh-why editorial from the Evening Standard, which has demandedWhy has the state found itself so dependent on a few very large outsourcing firms? Why was Carillion awarded huge contracts by the civil service, with whom rather than ministers almost all procurement decisions lie after they knew it was struggling last year?
THE PROSECUTION RESTS

The Standard’s editor, the Rt Hon Gideon George Oliver Osborne, heir to the seventeenth Baronet, can answer those himself. As Chancellor of the Exchequer for six recent years, he was a full participant in the Carillion mess. This is also his can to carry.

When it came to Carillion, the Tories were absent elsewhere. That’s not good enough.

8 comments:

Anonymous said...

Of course the tories are just being tories. That is, accessories before, during and after the fact of looting the nation's wealth via PFI hoods like Carillion.

But lest we forget: Blair/Brown and the New Labour gang intensified the PFI scam even after Paul Foot exposed it for the legalised robbery it is. If some tories and their civil service hoppos face a long spell in the slammer, so should Blair/Brown and their cabal of right wing cringing gobshites.

What's the betting Carillion thieves have looted the pension scheme too?

Pavi said...

That brick Giddy Gideon is trying to lay is as pissed as Stained Fawkes.

Jonathan said...

The list of incompetence and deceit by the Tories within a fortnight of the New Year is breathtaking even by their levels of uselessness.

Grayling bails out Brandon/Souter, Maybot brings back Darth !cVey to finish off Grayling/IDS' dirty work and falls to sack Hunt.

Come the local elections what else will the Tories have screwed up?

Jonathan Wilson said...

Well turns out that David Lidington did indeed try to blame the previous Labour government... because they had awarded 1/3rd of the contracts that it had; reducing the culpability of the current tory gov, and the previous tory led Lib dem coalition, that had awarded 2/3 of the contracts while nicely forgetting that the tory gov had awarded the current set of contracts knowing the company was up the shit creek.

Anonymous said...

And the Carillion CEO walks off with millions.

How very Tory.

Anonymous said...

Steve Topple‏Verified account @MrTopple

Just having a little dig into exactly *who* has been selling short on #Carillion, of late... One name that keeps springing up is Mr John C Armitage, of Panama Papers and Tory Party/Remain Campaign donor fame... 🤔

SteveB said...

Not actually arguing with anyone above, but it's all very stable door. A question was raised yesterday that has not been touched on here - the concept of companies that are too big to fail and what governments should do about it because it's too late if they do fail.

I'll float an example for you to mull over. There is no sign that they are in trouble or likely to fail but just think for a moment and ask yourselves what would happen if they did get into problems.

Eddie Stobart

They distribute a huge proportion of food within UK, especially if it is processed or sold at Tesco. If they went down it wouldn't be pensions or job losses we'd be talking about, we'd have food riots within a week.

So instead of the political classes arguing about how Carillion got into trouble and who was in charge when they did, can we have someone who is (nominally) in charge now to review which companies are so big and vital (not just Stobart, there may be medical suppliers etc..) and to set up on office that monitors them and has contingency plans ready. There is a precedent - they already do it with Train Operating Companies.

Anonymous said...

SteveB,

Great idea.

But entirely impractical from a tory point of view.

Why would they want to expose their thieving scam, anymore than they want to expose the actual cause of the 2008 Great Depression?

So expect nothing but lies and deliberate confusion from them and their media mouthpieces. It's what they do.