Thomas Cook chiefs urged to hand back bonuses to fund workers' pension

  • Video report by ITV News Economics Editor Joel Hills

Thomas Cook's "high-paid executives" should give their bonuses to the collapsed firm's pension fund, a senior MP has said.

Frank Field, chairman of the Commons Work and Pensions Committee, said ex-employees now face a "long wait" to find out how much of their savings may have been lost.

His comments come as Thomas Cook's chief executive, Peter Fankhauser, told MPs on Tuesday that no UK minister contacted the firm in the six days leading up to the firms collapse - while government ministers from Germany, Spain, Bulgaria, Turkey and Greece all personally reached out to him.

Former Thomas Cook employees arrive at Portcullis House in Westminster for the Business, Energy and Industrial Strategy Committee inquiry into the collapse of the British travel operator. Credit: PA

The House of Commons committee said recent calculation mean workers will not be "enough to secure their earned retirement benefits in full".

The retirement scheme is expected to have enough assets to provide workers with more money than if the scheme was forced into the Pension Protection Fund, but the full amount to pay pensions in full was still not secure.

Mr Field said: “Thomas Cook workers now face a long wait to find out exactly how much they’ve lost from their life savings, and, while their former bosses might argue that this isn’t another BHS, Carillion or British Steel, they will have a hard time justifying the millions they pocketed while the company collapsed around them.

Former CEO of Thomas Cook Peter Fankhauser speaking to the House of Commons Business, Energy and Industrial Strategy Committee at Portcullis House in Westminster, during the inquiry into Thomas Cook. Credit: PA

“If they’ve had a chance to check how their own pensions are affected, perhaps the high-paid executives responsible would like to bolster the retirement of some of the workers they left behind, and give some of it back?”

It is likely some Thomas Cook members will not receive their full pension entitlement, the committee said.

Trustees indicated to the committee that, despite the relatively healthy level of funding in the scheme, the accounts “overplayed its position”, it said.

The Pension Protection Fund said last month that it would assess the funding levels of the Thomas Cook pension scheme.

Workers face an anxious wait to find out how their pensions have been affected. Credit: PA

Former cabin crew employee Ian Lilley has been keeping a video diary showing what life is like for workers coping with life after Thomas Cook.

He detailed some of the questions he wanted answering ahead of the hearing.

Former Thomas Cook chief executive 'deeply sorry'

Ex-chief executive Peter Fanhauser told MPs at the Business, Energy and Industrial Strategy Committee he regretted the firm's collapse.

Several former Thomas Cook employees attended the hearing to hear what Mr Fankhauser and four senior company had to say.

In his opening remarks, he said: "You heard me probably say it already, but I really want to repeat it in front of the members of the select committee, how deeply sorry we are that we couldn't save this iconic brand and this company who has a long, long standing history in this part of the UK industry.

"I'm deeply sorry about this failure and I'm deeply sorry for the distress we caused to millions of customers who booked holidays with us and who were on holidays with us.

Former Thomas Cook employees arrive at Portculis House to hear former senior figures give evidence to MPs. Credit: PA

"I'm deeply sorry for our suppliers who were long-standing partners and who were loyal to us throughout this time.

"I'm especially sorry for all my colleagues who worked extremely hard and tirelessly to make Thomas Cook a better company."

But MPs were quick to call into question some of the accounting policies including the decision to include a £2.5 billion "goodwill" value on the business in 2018.

They also asked the bosses why they based bonuses on profits that excluded one-off payments to pay for the restructuring. A total of £1.8 billion was written as "exceptional" costs over eight years.