Unite launches blueprint to tackle bandit capitalism
Unite today launches a blueprint to tackle bandit capitalism in the UK economy and stop future Carillion-style collapses.
The union says its publication is especially timely given the growing fears that outsourcing giant Interserve could suffer a Carillion-style collapse.
The document Ending bandit capitalism: Learning the lessons from Carillion’s collapse contains a package of measures designed to introduce better regulations and stricter rules to prevent companies being able to embellish their accounts and provide an entirely false trading position, which had disastrous consequences for Carillion and its workforce.
The comprehensive report for the first time details the sorry saga and circumstances of Carillion’s collapse and the role played by the directors, the government and its auditors, in the company’s demise. There are further chapters which examine the outsourcing of public sector contracts and how the construction industry is organised which were both major contributory factors in Carillion’s demise.
The document also studies the circumstances which resulted in Carillion’s pension fund being bailed out by the pension protection fund and the legal consequences as a result of the company entering compulsory liquidation, that has made it particularly challenging for the thousands of workers who lost their jobs to seek compensation.
The recommendations in the 36-page document include:
- requiring directors to focus on the long-term welfare of the company rather than short-term profits
- new rules which bar companies from prioritising dividends, bonuses and director’s pay over reducing pension deficits
- the government should not award contracts to companies in financial difficulties
- if a major company collapses government support for sub-contractors and its supply chain should be for the long-term
- the entire financial regulatory system requires radical reform with the number of regulators being reduced and those that remain being given real power and teeth
- the current outsourcing culture must be ended with contracts being brought back in house at the earliest opportunity
- a transformation of employment laws to ensure unions have access to workforces to organise workers and prevent exploitation
- the number of legal hurdles that must be cleared before cases taken for workers, who were employed by a company in compulsory liquidation can go forward, must be reduced.
Since Carillion’s collapse Unite has led the way in calling for action to be taken to bring those responsible for the company’s collapse to justice. Unite has called for a public inquiry into Carillion’s collapse and an immediate criminal investigation into those responsible.
Unite assistant general secretary Gail Cartmail said: “This document is designed to set out the many factors that led to Carillion’s collapse and to ensure that the bandits are chased out of UK plc.
“What is too often forgotten when company’s collapse is that thousands of workers both directly employed by the company and in their supply chain lose their jobs, through absolutely no fault of their own. The untold human misery of being dumped out of work without warning must be tackled once and for all.
“The reforms that Unite has set out provide a clear blueprint of what is needed to begin tackling the worst excesses of the financial and corporate culture which currently exists.
“With the revelations that Interserve which has a very similar structure to Carillion, is also in severe financial difficulties these reforms cannot be introduced a minute too soon.
“It is a damning indictment that nearly a year after Carillion’s collapse no one has been charged with doing anything wrong, yet thousands of workers lost their jobs and millions of pounds of taxpayers’ money has been spent on clearing up the mess.
“Perhaps the most worrying factor concerning Carillion’s collapse is that the government is still acting as though it is business as normal, which is potentially exposing thousands more workers to a Carillion style meltdown.”
- Like this story? Please support our work here.