The government faces fresh criticism over its handling of the Thomas Cook collapse as MPs prepare to question bosses today over their role in its demise.
The Commons business, energy and industrial strategy committee is due to question chief executive Peter Fankhauser and chairman Frank Meysman.
Chief financial officer Sten Daugaard and the chairs of the failed company’s audit and remuneration committees have also been called to appear in Westminster this morning.
The committee will sit against a backdrop of accusations that ministers had ample opportunity to save Thomas Cook but instead allowed the firm to go under.
ITV News revealed yesterday that “the decision to allow Thomas Cook to fail was ideological” – after disclosing a copy of the ‘commercial proposal’ the company’s executives submitted to government asking for help.
This requested up to £200 million of taxpayers’ money to recapitalise the firm. Thomas Cook bosses were clear this was not a bailout but a plan which would leave business debt free and solvent.
Thomas Cook argued that it was worth the government putting up to £200 million on the line to support the recapitalisation because its exposure to the company’s collapse was far greater.
“The maximum cost to HM Government that could arise under this proposal would likely be extremely modest,” when compared with the estimated cost to taxpayer of the repatriation of holidaymakers alone “to be in the region of several hundred million pounds”.
Thomas Cook argued that the support it was seeking did not qualify as a “bail out” because its shareholders had already suffered significant losses and its lenders were set to write off most of the money they were owed.
“The key beneficiaries” of financial help from government, the proposal signed by Fankhauser stated, “will be Thomas Cook’s customers, suppliers and employees,” according to ITV.
Transport and Salaried Staffs’ Association general secretary Manuel Cortes, who will also give evidence to the business committee, said: “It’s now clear that what I have been saying all along is true – the government could easily have intervened to save Thomas Cook but chose not to.
“They did nothing because they are mired in dogma, and we now have the proof. Their mad non-interventionist ideology – central to the way this Conservative government thinks – ignored the fact that this was not a bailout.
“Boris Johnson had the cheek to speak of Thomas Cook being a ‘moral hazard’ whilst knowing full-well that this was a reasonable request for help that would have saved at least 9,000 jobs and stopped the repatriation of over 150,000 holidaymakers.”
He added: “Let’s not forget that Fosun – a major private investor – was still happy to back Thomas Cook to the tune of £450 million. At the same time the British government allowed dogma to get in the way of common sense and good business sense.
“This left British taxpayers footing the bill for the Thomas Cook’s collapse – a total which is likely to be close to that which the company sought to keep it solvent for the long term-term.
“Losing Thomas Cook, one of the great British High Street brands, was an unnecessary act of self-harm conjured by the Government’s ideological blindness.”
Meanwhile, investment firm Triton Partners is in talks to buy Thomas Cook’s Nordic operations, raising hopes that more jobs can be saved, Sky News reported.
Thomas Cook’s Nordic arm trades under the Ving, Tjareborg and Spies brands, collectively employing about 20% of what was a 21,000-strong workforce across the group.
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