Cook collapse: ‘Poorly run companies cannot survive’ - Shapps

Shapps was fielding criticism from MPs surrounding Cook’s collapse during a parliamentary debate yesterday (24 October).

He dismissed a claim by Scottish National Party MP Peter Grant that “if the government had engaged sooner with Thomas Cook, they could have mitigated the impact of this failure” as “simply not correct”.

Shapps revealed he had met with Peter Fankhauser on 9 September – a fortnight before the company’s failure – but was told by Cook’s ex-chief executive “there is nothing that can be done at this time”.

“[Fankhauser] later, on 18 September, wrote to the government asking for not the £200 million that has been reported, but up to £250 million,” continued Shapps.

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

“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.”

Labour shadow transport minister Karl Turner later accused the government of letting down Thomas Cook staff who “lost their livelihoods while the gaffers got rich off their bonuses”.

“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 retorted: “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.”

He told MPs that the “reality” of the situation was the rescue of former Cook staff’s jobs by Hays Travel “because well-run companies survive. Poorly run companies cannot survive.”

Shapps ended by confirming that now the repatriation of Cook customers is complete, his focus was on “next steps”, including the announcement in the Queen’s Speech that the airline insolvency review will be turned into an Act of Parliament.