Jeremy Corbyn calls on Carillion directors to hand back their bonuses

Jeremy Corbyn has called on the directors of failed construction firm Carillion to give back their multi-million pound bonuses.

The company, which handled hundreds of public sector contracts, went into liquidation on Monday after racking up £1.5bn of debts and liabilities.

As the firm collapsed, it emerged that, in 2016, the directors had made it harder for investors to claw back executives’ bonuses if the business encountered difficulties.

Carillion’s directors took home £4m in bonuses last year despite the company being in bad health.

Mr Corbyn said they should give back the handouts immediately.

“The bonuses should come back,” he said. “When there are people who are sub-contractors or small firms that are contracted into Carillion that are not getting paid, workers being made redundant at 48 hours’ notice, and less in some cases, the directors, for all the bonuses they have had, should pay them back.

The Labour leader also said Carillion’s directors should stop being paid a salary.

“They should not be paid anything at the present time because they have run the company in such a way that all these jobs are at risk,” he said.

“So many of our public services are at risk - school meals services, hospital cleaning services, maintenance contracts, army housing, are all at risk because of the way this company has been run.”

Greg Clark, the Business Secretary, has said the Official Receiver will carry out an investigation into Carillion directors’ behaviour, including the changes they made to the rules on bonuses.

“It is important we quickly get the full picture of the events which caused Carillion to enter liquidation,” he said.

“Any evidence of misconduct will be taken very seriously.”

Cabinet Office Minister David Lidington told the Commons it would be wrong to try to pre-empt the inquiry but added: “I can say ... that the Official Receiver has not only the power to investigate, he has the power to impose severe penalties.

The firm’s former chief executive, Richard Howson, stepped down in July after a profit warning. His pay package last year totalled £1.5m and he is due to continue to receive a salary until October 2018.

Carillion is the second biggest construction firm in the UK, employing 20,000 people across the country and managing 450 government contracts.

There are fears that a number of projects the company was overseeing could now be postponed, meaning delays in the construction of hospitals and roads.

There are also 30,000 smaller firms working on Carillion contracts that could now face a damaging loss of business.