FacebookTwitterGoogle+RedditEmail

The Collapse of Carillion: Another Free Market Failure

by

Carillion PLC, the British construction and facilities management services company has collapsed into liquidation. This is a failure of the ‘free’ market and capitalist dogma: Carillion workers will suffer, as will those who use the services Carillion was given to run.

The ground moved from under Carillion’s feet from the beginning of the year as the government called crisis meetings to try and assist in re-financing for Carillion. Crisis meetings with the creditor banks – Barclays, HSBC and Santander – came to nought. The inevitable result was that liquidators were appointed on 15 January.

Carillion’s stunning collapse is sending huge tremors through the government. The share price fell by over 90 per cent since July 2017. Its market value of £61 million dropped daily and in the end evaporated. The group had debts of over £1.5 billion, a pension deficit of £587 million and even the £300 million it required to keep going in January would most probably not have saved it in the long run.

The government cares nothing for the potential 20,000 British jobs
at risk or the 25,000 Carillion jobs overseas or the threat to the pension scheme or pensioners. What the government cares about is its ideological commitment to the so-called free market and its ‘principle’ of non-interference in bail-outs of failing companies. It is also firmly in the straitjacket of EU financial rules which prevent state assistance.

In the government’s own ideological mind-set, it should let Carillion go to the wall. In reality the government cannot contemplate the possible collapse of the £1.34 billion HS2 rail contract recently awarded to Carillion, intended to prop it up. Instead the government act to safeguard HS2 and avoid shock waves which would rip through their industrial strategy and British manufacturing.

Carillion’s public sector contracts are widespread – including hospitals, schools, prisons, railway maintenance, and armed forces services. All are at risk.

The government is caught between the failures of its free market philosophy, the failure of its decades-long outsourcing strategy and the subsequent chaos about to be let loose in the public sector areas that depend on these outsourced services.

More articles by:

Will Podmore is a librarian and writer living in London. He is the author of The EU Bad for Britain – a Trade Union View, British Foreign Policy Since 1870 and The War Against the Working Class.

Weekend Edition
February 16, 2018
Friday - Sunday
Jeffrey St. Clair
American Carnage
Paul Street
Michael Wolff, Class Rule, and the Madness of King Don
Andrew Levine
Had Hillary Won: What Now?
David Rosen
Donald Trump’s Pathetic Sex Life
Susan Roberts
Are Modern Cities Sustainable?
Joyce Nelson
Canada vs. Venezuela: Have the Koch Brothers Captured Canada’s Left?
Geoff Dutton
America Loves Islamic Terrorists (Abroad): ISIS as Proxy US Mercenaries
Mike Whitney
The Obnoxious Pence Shows Why Korea Must End US Occupation
Joseph Natoli
In the Post-Truth Classroom
John Eskow
One More Slaughter, One More Piece of Evidence: Racism is a Terminal Mental Disease
John W. Whitehead
War Spending Will Bankrupt America
Dave Lindorff
Trump’s Latest Insulting Proposal: Converting SNAP into a Canned Goods Distribution Program
Robert Fantina
Guns, Violence and the United States
Robert Hunziker
Global Warming Zaps Oxygen
John Laforge
$1.74 Trillion for H-bomb Profiteers and “Fake” Cleanups
CJ Hopkins
The War on Dissent: the Specter of Divisiveness
Peter A. Coclanis
Chipotle Bell
Anders Sandström – Joona-Hermanni Mäkinen
Ways Forward for the Left
Wilfred Burchett
Vietnam Will Win: Winning Hearts and Minds
Tommy Raskin
Syrian Quicksand
Martha Rosenberg
Big Pharma Still Tries to Push Dangerous Drug Class
Jill Richardson
The Attorney General Thinks Aspirin Helps Severe Pain – He’s Wrong
Mike Miller
Herb March: a Legend Deserved
Ann Garrison
If the Democrats Were Decent
Renee Parsons
The Times, They are a-Changing
Howard Gregory
The Democrats Must Campaign to End Trickle-Down Economics
Sean Keller
Agriculture and Autonomy in the Middle East
Ron Jacobs
Re-Visiting Gonzo
Eileen Appelbaum
Rapid Job Growth, More Education Fail to Translate into Higher Wages for Health Care Workers
Ralph Nader
Shernoff, Bidart, and Echeverria—Wide-Ranging Lawyers for the People
Chris Zinda
The Meaning of Virginia Park
Robert Koehler
War and Poverty: A Compromise with Hell
Mike Bader – Mike Garrity
Senator Tester Must Stop Playing Politics With Public Lands
Kenneth Culton
No Time for Olympic Inspired Nationalism
Graham Peebles
Ethiopia: Final Days of the Regime
Irene Tung – Teófilo Reyes
Tips are for Servers Not CEOs
Randy Shields
Yahoomans in Paradise – This is L.A. to Me
Thomas Knapp
No Huawei! US Spy Chiefs Reverse Course on Phone Spying
Mel Gurtov
Was There Really a Breakthrough in US-North Korea Relations?
David Swanson
Witness Out of Palestine
Binoy Kampmark
George Brandis, the Rule of Law and Populism
Dean Baker
The Washington Post’s Long-Running Attack on Unions
Andrew Stewart
Providence Public School Teachers Fight Back at City Hall
Stephen Cooper
Majestic Meditations with Jesse Royal: the Interview
David Yearsley
Olympic Music
FacebookTwitterGoogle+RedditEmail