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Govt refused to risk 'throwing good money after bad'

On Cook, Shapps rejected criticism of the government for failing to bail out Thomas Cook at a cost of “up to £250 million”.


“Given the perilous state of the business, including the company’s £1.5 billion half-year loss reported in May, there was no guarantee the [cash] injection would have secured the future of the country,” said Shapps.

 

“Our concern is we would have put in £250 million and risked throwing away good money after bad. And then still have to pay for the repatriation.


“It is quite clear in the last several years, the company ran into a number of different problems trying to expand itself out and invested more in the high street rather than less while the entire market was moving in the opposite direction.


“The loss, nonetheless, of an iconic British with a 178-year history, one of the oldest travel companies in the world, is an extremely sad moment.”


Shapps added the failure of Cook “should not be seen as a reflection on the general health of the UK aviation industry”. “The truth is the way people book their holidays has changed an enormous amount,” he told MPs.


The transport secretary also praised Thomas Cook employees for working “above and beyond” during what is a “distressing situation” for them. He said the government would do everything in its power to help them back into work.

'Unprecedented response to an unprecedented situation'

He also praised the CAA for its preparation for Cook’s failure, with its repatriation effort – Operation Matterhorn – set to bring home more than 150,000 Cook passengers over the next two weeks.


“This has been an unprecedented response to an unprecedented situation, and I’m grateful to all parties who have stepped in to support these efforts,” said Shapps.


Shapps echoed calls from his ministerial counterparts for a thorough investigation into the failure of Cook.

 

He told members the government would prioritise “as a matter of urgency” an investigation into both the causes of the company’s failure, and the conduct of its directors and auditors.

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