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Cortes tells House of Commons Business Committee "British Government did nothing to save Thomas Cook"

22 October 2019

Speaking at the Business Committee of the House of Commons earlier today TSSA leader Manuel Cortes said "It's crystal clear the British government did nothing to try and save Thomas Cook, even though help was at hand from other countries such as Germany and Spain

"It's a total disgrace that Business Secretary, Andrea Leadsom failed to act because of dogma.

“The Prime Minister said that saving Thomas Cook would create a 'moral hazard'. Quoting a phrase from an undergraduate economics textbook is simply not good enough when 9000 people lost their jobs, over 150,000 needed to be repatriated and another 850,000 now need to book again their holidays. What was needed was plain common sense not Tory ideological purity.

"The cost of Thomas Cook's collapse is now running at over a billion euros. Our taxpayers will be footing over £160 million of this growing bill. To save this iconic British high-street brand, the government would have been able to assemble a coalition of the willing including the governments of Germany, Spain and Turkey. This would have reduced our taxpayers’ exposure in any rescue deal whose maximum total cost would have been around £200 million. Instead, we now have the economics of the mad house as at least a billion euros is being spent to deal with the Thomas Cook carcass.

"To cover their ineptitude, Transport Secretary, Grant Schapps claimed Thomas Cook was a dinosaur in a digital age. However, Mark Tanzer the Chief Executive of the Association of British Travel Agents has said that such a description 'really masks the true problem' as Thomas Cook last year sold £9.5 billion worth of holidays and had a million people either abroad or with future bookings when it went under. He blamed the collapse on a failure of corporate finance.

"I will go further and say it's also a failure of corporate governance, greed and government inaction. How is it that Thomas Cook was allowed to borrow so much money? Why did its Board and investors sanction such indebtedness and make such huge payments to its most senior staff? Why didn't the Business Secretary step in to help save the business given that a private investor, Fosun, was prepared to inject £450 million? Frankly, Business Secretary, Andrea Leadsom should resign or be sacked".

 

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