I know there are a lot of former employees of Thomas Cook living in Hove and Portslade and I want to make sure they have a powerful voice despite having their jobs and livelihoods robbed by the poor decisions of those running the company.
So despite putting so much work into Brexit, I’ve also got myself onto the parliamentary inquiry into the collapse of Thomas Cook. We’ve had several hearings a week so far and I’ve learned a lot.
Overall Britain has an amazing private sector. From the City of London to the thousands of small family businesses right through to people working from home as self-employed, most are well-run, ethical, and governed in a way that looks out for employees and shareholders.
But there are some things that have gone badly wrong. I have sat on the inquiries into working conditions in Sports Direct, the collapse of Carillion, and potential fraud in Patisserie Valerie and Pizza Express. I’ve learned a massive amount from these experiences and themes emerge.
Our inquiry into Thomas Cook started with the chair, CEO, and other former board members. We’ve also had hearings that summonsed the auditors and accountants and two CEOs from their past. In the coming weeks we’re going to have other hearings from regulators, corporate partners, shareholders, and investors. It’s an exhaustive process but an important one and I always want to get these things right as I know that jobs and wrecked holidays and a lot more were the consequence of this failure. And this failure didn’t happen by accident, decisions made by people underpinned it.
When I sit on the committee and look at the witnesses in front of me, I also see the public gallery. This time I saw people in Thomas Cook uniforms and other insignia. I was very aware that many people had travelled from all over the UK to sit in the same room as the people who wrecked the company they worked for and loved and they wanted answers. It makes me very nervous in those situations because I desperately want to do good by them.
From the first hearing some issues shone through. The company’s business model was becoming out of date but the management didn’t have the skills to transform it. Rather than leaving and making way for people who did, they ploughed on by trying to find new investors or to borrow more money and they dug deeper into their hole.
They also used some pretty shady accounting practices to avoid people noticing the growing problems. They scattered the debt across the accounts. Over a billion pounds was categorised as ‘goodwill’. I saw the same thing in Carillion where over £3billion was declared as goodwill. Whereas in Carilion ‘aggressive accounting’ had become the the bedrock of its business model, in Thomas Cook it looks like it was used towards the end to hide the full extent of difficulties it was in from investors.
We heard from their accountants who thought it was OK to have £1.1bn of ‘goodwill’ on their accounts and then six months later, just before collapse, write it off entirely. We spoke to two former CEOs who had wildly differing views on the direction they wanted to take the company and in one case blew the lid on rows and potential sexism at the very top of the company.
We heard that the company were told by officials in the Department of Transport not to try and contact ministers in the Department for Business. Not a single business minister from our government contacted or or spoke to Thomas Cook in the weeks leading up to its failure. To illustrate just how awful this is, government ministers from five European countries contacted Thomas Cook executives in that same time to see what assistance could be offered, but none from our own despite it being a British company.
So there is a lot about this affair that should shock us all. I have now heard from and met people from our own community who have lost their livelihoods and income due to the rank incompetence of those running the company and decisions made by previous leaders of the company they put their trust in. One local resident I am in touch with is now having to move our of our community because he can’t afford to live here since suddenly losing his job. This is so distressing, I’m doing my very best to help him and others.
So you can see why I asked this question: the CEO earned £4 million in the years running up to the collapse of the company he was running, did he ever consider putting his hand into own pocket to help out some of those on low incomes that have just lost their job? No prizes for guessing the answer.
I’m very keep to seek justice for employees and customers who lost so much, so I’ve been out on the airwaves doing my bit to hold people to account and tell people what’s going on. Here’s a link to a TV interview I did on it too: https://news.sky.com/…/emerging-theme-in-major-corporate-fa…
We have some way to go in this inquiry, but I’ll be doing my best to get to the truth and make sure it’s acted upon.
To watch some of my questions to Thomas Cook directors, you can click here: http://bit.ly/2q26m8B