Boris Johnson says Thomas Cook bosses should be personally held to account for leaving holidaymakers stranded
THOMAS Cook’s bosses should be personally held to account for leaving holidaymakers stranded, Boris Johnson has insisted.
The PM spoke out as the travel giant collapsed, leaving 160,000 Brits stranded abroad.
He said he was “confident” that the “huge” Government airlift now underway will bring them all home.
Speaking in New York while at a UN summit, Mr Johnson said ministers’ “thoughts are very much with the customers who may now face difficulties getting home”.
But he also turned his fire on the failed travel firm’s directors, questioning why they should be allowed to pay themselves “large sums of money” as their business goes “down the tubes”.
Boris said: “I think it is a bit bewildering that you can have 160,000 people stranded.
“It’s not possible for me to know exactly what happened with the directors of the board of Thomas Cook and how it came about when they paid themselves x, y or z.
“But we’ve got to have a system in the future whereby we make sure that tour operators are in some way prevented from simply going belly up and then requiring the taxpayer to bring everybody home.”
Mr Johnson also suggested law changes that would force tour operators to properly insure themselves against a business disaster.
The PM added: “I think the questions we’ve got to ask ourselves now: how can this thing be stopped from happening in the future?
“How can we make sure that tour operators take proper precautions with their business models where you don’t end up with a situation where the taxpayer, the state, is having to step in and bring people home?”
TOUGHEN UP THE LAW
Ministers are already reviewing whether to toughen up the law after the airline Monarch entered administration in 2017, leaving nearly 100,000 passengers and holidaymakers stranded.
Boris added: “One way or the other, the state will have to step in to help stranded holidaymakers.
“One’s driven to reflect on whether the directors of these companies are properly incentivised to sort such matters out.”
Boris also told why ministers refused to bail out the disaster-hit firm.
He explained: “It is perfectly true that a request was made to the Government for a subvention for around £150m.
“Clearly that is a lot of taxpayers’ money and sets up a moral hazard in the case of future commercial difficulties that companies face.”
Meanwhile, Labour shadow chancellor John McDonnell accused the Government of sitting by and allowing Thomas Cook to collapse for “ideological” reasons.
And he claimed the holiday giant would never have gone bust if it was still in public ownership – as it was between 1948 and 1972.
He separately tore into the company’s bosses and said they should “absolutely” be forced to hand back bonuses.
Swiss chief Peter Fankhauser has pocketed £8.3 million since taking the helm in 2014.
Mr McDonnell said: “The Government’s intervention could have enabled us just to stabilise the situation, give a breathing space so that there could be proper consultation with the workforce in particular about how to go forward.
“To just stand to one side, and watch this number of jobs go and so many holidaymakers have their holiday ruined, I just don’t think that’s wise Government.”
The Sun Says
OUR hearts go out to those stranded by Thomas Cook and the staff now out of work.
We are repulsed by the greed of the bosses who made terrible decisions for years, lurching from crisis to crisis.
They must be held accountable.
Rewards for failure are damaging capitalism’s image faster than anything.
But it is bonkers to argue this company should have been bailed out with public money.
It has catastrophic debt and no business model in the web era.
Times change. Some firms fail.
That’s neither the Government’s fault nor its responsibility.
'FAST-TRACK' PROBE INTO DIRECTORS
Bosses pocketed nearly £21million in the years before its collapse.
The five-year bonanza included £8.4million for chief executive Dr Peter Fankhauser and £6.8million for former finance chief Michael Healey.
Non-executive directors on the firm’s board were paid nearly £4million from 2014 to 2018.
And former CEO Harriet Green was awarded a share bonus worth a staggering £5.6million in 2015 – with a third donated to charity.
Dr Fankhauser, who is married with three children, saw his pay fall to just over £1million last year – compared with £1.8million in 2017.
The 58-year-old’s most recent package included a £725,000 salary, £82,000 in benefits and £217,000 in pension contributions. About one third of the company’s investors voted against a controversial bonus scheme in 2017.
Business Secretary Andrea Leadsom yesterday called for an immediate investigation into Thomas Cook chiefs and how the firm came to be liquidated.
Mrs Leadsom said she would write to the Insolvency Service asking for a “fast-track”’ probe into directors like Dr Fankhauser.
It follows accusations that Thomas Cook bosses failed to “future-proof” a firm that “operated in brochures while the world had moved onto barcodes”.
She said: “Andrea Leadsom said: ‘This will be a hugely worrying time for employees of Thomas Cook, as well as their customers. Government will do all it can to support them.
“I will be setting up a cross-government taskforce to monitor local impacts, will write to insurance companies to ask them to process claims quickly, and stand ready to provide assistance and advice.
“I will also be writing to the Insolvency Service to ask them to prioritise and fast-track their investigation into the circumstances surrounding Thomas Cook going into liquidation.”
A huge effort is under way now as you know to bring them all home. We are confident we can do that
Boris Johnson
Boris Johnson also questioned whether directors should pay themselves “large sums of money” as their businesses go “down the tubes”.
In an interview at the residence of the British consulate general in New York, the PM said: “I think the first thing, obviously, is that our thoughts are very much with the travellers of Thomas Cook, the customers, holidaymakers, who have been stranded by this collapse.
“A huge effort is under way now as you know to bring them all home. We are confident we can do that.
“I think the questions we’ve got to ask ourselves now: How can this thing be stopped from happening in the future? How can we make sure that tour operators take proper precautions with their business models where you don’t end up with a situation where the taxpayer, the state, is having to step in and bring people home?
“I have questions for one about whether it’s right that the directors, or whoever, the board, should pay themselves large sums when businesses can go down the tubes like that.”
The Sun yesterday revealed Ministers had scrambled to charter more than 40 jumbos to lead the biggest peacetime repatriation. The air rescue is expected to cost more than £75 million.
Unions had demanded £200 million to “tide over” Thomas Cook – claiming the costs of the business going bust would be as much as £600 million.
MOST READ IN POLITICS
Transport Secretary Grant Shapps yesterday reiterated the holiday giant wasn’t a “strategic” interest as he defended the decision not to pump in money.
He said Thomas Cook had asked for £150 million to £250 million from taxpayers but also required a further £900 million from investors.
But he said that with debts of £1.7 billion the business wasn’t “sustainable”.
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