Theresa May faces grilling over Government's handling of Carillion collapse

GETTYLabour MPs have warned of a centrist exodus

GETTYLabour MPs have warned of a centrist exodus

Theresa May and Jeremy Corbyn at PMQs.

The Labour leader criticised the Government's use of private companies in the public sector after the failure of multinational construction company Carillion.

"It looks like the Government was handing Carillion public contracts either to keep the company afloat, which clearly hasn't worked, or it was just deeply negligent of the crisis that was coming down the line".

Jeremy Corbyn accused Theresa May's government of being "deeply negligent" in a heated exchange over the collapse of Carillion in this week's Prime Minister's Questions.

Corbyn criticised the resulting gleeful cheers from May's side of the house: "Tory MPs might shout, but the reality is, today, over 20,000 Carillion workers are very anxious about their future, and for many of them the only recourse is to phone a DWP hotline".

"Why did the position of crown representative to Carillion remain vacant during the crucial period of August to November, when the profit warnings were being issued, the share price was in freefall and many people were very anxious?" "Why did the government do that?" The firm racked up £1.5bn of debts and liabilities. "As the ruins of Carillion lie around her, will the prime minister act to end this costly racket of the relationship between government and some of these companies?"

Mrs May said that the Government had protected taxpayers from "an unacceptable bailout of a private company".

She then took aim for Labour-controlled regional authorities that she claimed also awarded new contracts to Carillion after the company issued profit warnings.

The PM said government was a "customer not a manager" and had put safeguards in place to protect public contracts.

The issue dominated Prime Minister's Questions, with Mr Corbyn accusing Theresa May and other ministers of "negligence" by continuing to award Carillion contracts in the second half of 2017 despite the firm issuing a series of profit warnings.

"Was that the Government?"

Labour's Wolverhampton South West MP Ms Smith was accused of letting the city down after admitting she had not raised the firm's troubles in Parliament through fear she would cause "a state of panic".

Corbyn replied that: "Leeds have not signed a contract with Carillion".

"Under this government, Virgin and Stagecoach can spectacularly mismanage the East Coast mainline and be let off a £2bn payment".

The Labour leader told MPs that the failed firm and other private sector suppliers offered poor value for money and should be "shown the door". These corporations need to be shown the door - we need our public services provided by public employees with a public service ethos and a strong public oversight.