Question

To ask Her Majesty’s Government whether they will examine the financial support undertakings given to City Link by its owner; and whether they have estimated the cost to the taxpayer of the withdrawal of the committed support.

The Insolvency Service will consider the conduct of the directors of City Link in connection with the management of the company. This would include any issues associated with financial support offered by its owner or by third parties.

It is not uncommon that an insolvent company has insufficient money to pay their creditors in full - including employees - and that is why there are special arrangements for employees who are made redundant on the insolvency of their employer. These provisions ensure employees receive a basic minimum of the debts owed by the employer from the National Insurance Fund.

It is too early to provide an estimate of the cost of the payments to former employees of City Link. However, I can confirm that there are statutory limits on these payments, such as the £464 cap on a week’s pay.