Vince Cable: Inquiry into collapse of City Link could take place

The Business Secretary said the decision to proceed with an investigation will depend on the findings from the administrator.

Labour pressed Mr Cable to commit to a 'proper and full' inquiry.

Shadow business secretary Chuka Umunna criticised the 'utterly appalling' situation which left City Link workers discovering they were at risk of losing their jobs when watching television on Christmas Day.

It included more than 100 workers based at both the Wednesbury and Stone sites, as well as staff based in Birmingham, Shrewsbury and Coventry.

He insisted many questions remain unanswered for employees and contractors of the firm.

Labour's Geoffrey Robinson (Coventry North West) also hit out at the 'cynical, disgraceful behaviour' of City Link's owners, telling MPs: "No behaviour like that can be justified in the 21st century. It belongs in the 19th century, if it belongs anywhere at all."

The administrators at EY announced 2,356 redundancies on New Year's Eve, saying that an offer made for the company had not been acceptable.

Speaking in the Commons, Mr Umunna asked Mr Cable: "Do you agree with me that to hear your job has been at risk of redundancy not from your employer but while watching the TV news with your family on Christmas Day, as was the case with the City Link workers, is an utterly appalling way to be treated?"

Mr Cable replied: "I certainly agree for the 2,300 workers involved this was a very, very sad and dispiriting event.

"I think the company itself can answer for its own behaviour. The fact is, it was no longer viable and it was put into administration."

Mr Umunna then said to the Liberal Democrat Cabinet minister: "But with so many unanswered questions for employees and contractors of City Link, this entire affair stinks.

"Why, for example, if the firm was technically insolvent on December 22, as has been reported, were they planning to trade until the 26th?

"Is it true that contractors were told rumours of it going into administration were false?

"Why was a new subsidiary set up on December 9?"

While recognising the administrators will do their work, Mr Umunna added to Mr Cable: "Given the numbers involved and the public interest in this administration, will you commit to conducting a full and proper inquiry into this matter - as you did with Comet?

"Those who have lost their jobs and contractors who are owed money deserve nothing less."