Labour leader accuses government of negligence but PM says refusing to work with ailing firms would ensure their collapse

Theresa May has defended her actions over Carillion, telling the Commons during prime minister’s questions that the government was merely “a customer” of the collapsed public services provider, as Jeremy Corbyn criticised her over the issue.

PMQs verdict: Corbyn crushes May over Carillion Read more

May said that halting any new contracts with Carillion when it began issuing profit warnings last year would only have initiated the company’s demise, and insisted the government had been prudent in its dealing with the firm.

In response, the Labour leader accused May and her ministers of negligence, and lambasted the wider system of providing public services through companies such as Carillion, Virgin, G4S and Capita.

May was placed under heavy pressure over Carillion from the start of the session, with Labour MP Catherine McKinnell beginning by highlighting the plight of 1,400 apprentices who, she said, now did not know if they would be able to complete their training.

The prime minister responded: “I recognise that of course this has been a difficult time for a number of people, concerned about their jobs, about public services, and about pensions.”



Reiterating that all Carillion employees on public service contracts would still be paid, May said: “But of course the government is not running Carillion, the government is actually a customer of Carillion, and our focus has been on ensuring that we are providing the public services, that they are continuing to be provided uninterrupted, to reassure workers on those public services that they’ll get paid, to reassure the pensioners and make sure the support is there for them.”

On the apprentices, the government was “looking very carefully” at what action could be taken, May said.

Corbyn began by asking why the government had signed £2bn-worth of contracts with the firm in the last six months, “even after the share price was in freefall and the company had issued profit warnings”.

May responded by saying that to refuse to do any more business with firms after they released a profit warning “would be the best way to ensure that companies failed and jobs were lost”.

In a section that brought frenzied shouting from MPs on both sides of the Commons, Corbyn followed this up with a comment not phrased as a question, to which May declined to respond.

“It looks like the government was handing Carillion public contracts either to keep the company afloat, which clearly hasn’t worked, or it was just deeply negligent of the crisis that was coming down the line,” Corbyn said.



The prime minister responded: “I’m very happy to answer questions when the right honourable gentleman asks one. He didn’t.”

Corbyn criticised the resulting gleeful cheers from May’s side of the house: “Tory MPs might shout, but the reality is, today, over 20,000 Carillion workers are very worried about their future, and for many of them the only recourse is to phone a DWP hotline.”

He went on to condemn the continued payments and high bonuses to Carillion’s management, with May saying the official receiver would look into the issue, although she did not condemn the payments.

The Labour leader concluded with his now-standard summation of the issue debated, arguing that the government needed to take over outsourced public services.

“This isn’t one isolated case of government negligence and corporate failure. It’s a broken system,” he said.



“Under this government, Virgin and Stagecoach can spectacularly mismanage the East Coast mainline and be let off a £2bn payment. Capita and Atos can continue to wreck lives through damaging disability assessments of many people with disability and win more government-funded contracts.

“G4S promised to provide security at the Olympics, failed to do so, and the army had to step in and save the day. These corporations need to be shown the door.

“We need our public services provided by public employees with a public service ethos, and a strong public oversight. As the ruins of Carillion lie around her, will the prime minister act to end this costly racket of the relationship between government and some of these companies?”

May responded by saying that a third of such contracts had been signed under a Labour government, and condemned Corbyn’s general economic policies.

She said: “This is a Labour party that has turned its back on investment, on growth, on jobs, a Labour party that will always put politics before people.”