Britain’s banking sector has laid out emergency support measures for Carillion sub-contractors in the wake of the construction giant’s insolvency.
Representatives from a host of high street banks met with business secretary Greg Clarke to pledge support for affected customers, with overdraft extensions, payment holidays and fee waivers to soften any immediate financial impact and help firms stay afloat.
After Carillion went into liquidation on 15 January, the survival of thousands of small businesses in its supply chain was thrown into doubt. The UK’s second largest construction firm is believed to owe around £800m in retention payments to suppliers and sub-contractors.
The business secretary summoned representatives from Barclays, HSBC, Lloyds, Royal Bank of Scotland (RBS), Santander, Shawbrook and Aldermore to give business banking customers clarity regarding available support measures.
Commenting on the meeting, Clark said it was “essential” that small business owners exposed to the Carillion insolvency were given practical support and guidance by their bank.
“I chaired a meeting this morning of high street banks to ensure that they are in contact with customers impacted, that they have in place the advice and support needed and that any individual cases are escalated and dealt with sympathetically, swiftly and appropriately,” Clark said in a statement.
“I will continue to meet with them in the days and weeks ahead to ensure these commitments are being acted on.”
John Glen, economic secretary to the Treasury, praised the success of the talks.
“I am pleased to see that the UK banks are taking such a constructive approach, proactively contacting affected customers, and taking the required steps to help those facing short term issues as a result of Carillion going into liquidation,” he said.
Meanwhile, Stephen Pegge a director at UK Finance, a trade association representing the financial services sector, promised that close work would continue between banks and government to fully understand the threat facing Carillion sub-contractors.
“Lenders are contacting customers and, where appropriate, are putting in place emergency measures…to ensure those facing short term issues can be helped to stay on track,” Pegge said.
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