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Live Reporting

By Chris Johnston

All times stated are UK

  1. Post update

    That's all for the first livepage of the week. We usually finish with a look at Wall Street's closing prices. But markets are closed for a US public holiday - Martin Luther King day.

    Join us again tomorrow from 6am.

  2. Were 'abnormally low' bids to blame?

    Peter Kitson, Partner at law firm Russell-Cooke, says the procurement rules that govern public sector procurement are the key to understanding what has gone wrong at Carillion.

    Quote Message: Almost all Carillion contracts have been competitively tendered under those procurement rules. The rules require public sector clients to investigate and possibly to exclude any tenderer whose bid is 'abnormally low'. One contributory factor here may be that Carillion has tendered at very low margins, possibly unsustainably low, in order to win these huge volumes of work. If such bids have succeeded, that can only mean either than the regulations themselves are ineffective or that public sector clients lack the confidence or the expertise properly to enforce those rules.
  3. Carillion: what happens now?

    Video content

    Video caption: The Carillion collapse - what happens now?

    What does the company's demise mean for the projects it worked on, and the schools and hospitals it serviced?

  4. Cobra meeting ends

    David Lidington

    Ministers have now ended the Cobra meeting on the demise of Carillion.

    Cabinet Office minister David Lidington (pictured) says day one had gone "pretty well" as "people were turning up to work, we have not had any reports of serious interruption to service delivery."

    He says PWC, which is working with the official receivers, took ministers through the advice it is giving to employees and contractors at the meeting.

    It was also an "opportunity for ministers to test what sort of concerns are being expressed and decide how we should best address them and provide the reassurance that people want", Mr Lidington adds.

  5. Elliott reveals GKN stake

    GKN workers

    Spot of other corporate news for a moment. The engineering giant GKN, already under pressure to begin takeover talks with Melrose, is facing another threat.

    It has emerged that US activist investor Elliott has a 1.7% stake in the company, which last week rejected a £7bn bid from Melrose.

    Elliott, a hedge fund with a track record of intervening in takeovers, said it held the stake in GKN through contracts-for-difference (CfDs).

    A person familiar with the situation said that while Elliott believed the current offer from Melrose was too low, GKN should open discussions to "find the right price and the right structure".

  6. Go to work...

    Cabinet Office minister Oliver Dowden has been talking to Jon Snow on Channel 4 News tonight in the wake of Carillion's collapse this morning, as C4 comms director Hayley Barlow tweets:

    View more on twitter
  7. Public vs private

    David Lidington

    The government will pay Carillion workers on private sector contracts for 48 hours after the company's collapse, but will not offer them the same protection as those in the public sector, Cabinet Office minister David Lidington said.

    While the government is paying the salaries of Carillion's workers, he said those private companies employing Carillion would have just two days of government support.

    "The position of private sector employees is that they will not be getting the same protection that we're offering to public sector employees, beyond a 48-hour period of grace," Mr Lidington told MPs.

    "I think that is a reasonable gesture towards private sector employees," he added.

  8. Cobra meeting underway

    Chancellor Philip Hammond and ministers including Nick Gibb, Stephen Barclay, Michael Ellis, Tobias Elwood and Jake Berry have arrived in Whitehall for a meeting of the government's emergency Cobra committee on the collapse of Carillion.

  9. BreakingCorbyn: 'Watershed moment'

    Jeremy Corbyn

    The collapse of Carillion is a “watershed moment”, says Labour leader Jeremy Corbyn.

    "Across the public sector, the outsource-first dogma has wreaked havoc. Often it is the same companies that have gone from service to service, creaming off profits and failing to deliver the quality of service our people deserve.

    "Labour will end the PFI rip-off, put an end the private-profit-is-best dogma and run our public services for the benefit of the many, not the profits of the few.”

  10. 'A disaster'

    Mick Lynch, assistant general secretary of the RMT union, calls the Carillion collapse a disaster.

    "There are thousands of sub-contractors, agency labour, there are suppliers who won't get paid. We're already being told that people aren't being paid," he says.

    "The thing is collapsing around us and the government seems to have this laissez-faire attitude and they've got to take steps that assure people of their futures."

  11. Calling the shots

    Times deputy political editor Sam Coates has been reading the leaders in today's edition of the Evening Standard, which is edited, of course, by one George Osborne.

    View more on twitter
  12. Lawson calls for PFI probe

    Lord Lawson

    Former chancellor Lord Lawson has called for an independent inquiry into the private finance initiative (PFI) process following the Carillion collapse. He told the House of Lords he "refused to have anything to do with it" when in office in the 1980s even though Treasury officials were keen on it.

    Subsequent chancellors, especially Gordon Brown, were "enthusiastically in favour" because it enabled ministers to "dress up" considerable amounts of public spending off the public sector balance sheet.

    He said this was not a good reason for something which did not give good value for money for the taxpayer and introduced "a degree of moral hazard which we see very much in the Carillion affair".

    Lord Lawson said it was important to "take stock and decide whether the whole PFI initiative should be proceeded with any further" because there was enough evidence to show it was not good value for money or sensible for taxpayers.

  13. Carillion bosses may face penalties

    House of Commons

    Parliament

    Rachel Reeves

    Rachel Reeves, Labour chair of the Business Committee, Rachel says that despite its financial outlook Carillion was "year after year paying dividends to shareholders", while its former chief executive was being paid £600,000 until October last year.

    She asks for a change to the rules so that "companies cannot siphon off money to the detriment of suppliers, workers and ultimately the taxpayer".

    Cabinet Office minister David Lidington says the official receiver will consider the potential detriment to those receiving pensions as well as employers and may impose penalties on individuals "if there is evidence they have abused their responsibilities".

  14. Morgan's SME plea

    House of Commons

    Parliament

    Nicky Morgan

    Conservative chair of the Treasury Committee, Nicky Morgan, highlights the role of small and medium-sized businesses in the supply chain.

    She says they are "concerned about meeting liabilities" and asks what can be done so they do not feel "pressure to keep paying the taxman".

    Cabinet Office Minister David Lidington assures her the official receiver is making provision to assist suppliers and subcontractors, and points out a helpline is available through which MPs can raise queries on behalf of constituents.

  15. Sterling hits $1.38

    cash

    Very quick update on the London market: the FTSE 100 ended the day down about 10 points at 7,769.

    But more interestingly, sterling has hit $1.38 against the US dollar.

    Neil Wilson at ETX Capital says the pound has now made up more than 60% of its losses since the Brexit referendum vote, when the currency fell below $1.20.

    "Ultimately this is a dollar story as much as anything else, and the greenback – while rocking - looks oversold and may be poised to bounce back, which could prevent sterling from breaking out just yet," he adds.

  16. Too late for the brakes

    Carillion workers

    Frank Field, chair of the Work and Pensions select committee, comments:

    “Carillion took on mega borrowings while its pension deficit ballooned. We called over a year ago for the Pensions Regulator to have mandatory clearance powers for corporate activities like these that put pension schemes at risk, and powers to impose truly deterrent fines that would focus boardroom minds.

    “If government had acted then, the brakes might have been put on Carillion’s massive ramping-up of debt and it never would have fallen into this sorry crisis."