Labour Calls For Inquiry Into Government Grants At Kaiam

26 December 2018, 07:59 | Updated: 26 December 2018, 08:02

Kaiam

Politicians have called for a inquiry into government grants given to companies behind a factory where hundreds of workers lost their jobs on Christmas Eve.

A total of 310 workers at Kaiam in Livingston, West Lothian, were told they were being made redundant immediately, at a meeting at the computer components plant on December 24.

Those who had been laid off have been told they will not be paid and will have to claim their last wages through the Insolvency Service.

Administrators told the staff the redundancies were due to declining work levels, high operational costs and lack of customer orders at the factory, which manufactures optical receivers.

The remaining 28 employees have been retained to help the joint administrators explore a sale of the business.

Scottish Labour has called for an inquiry into government grants to companies such as Kaiam Europe and Kaiam UK.

Kaiam announced in 2014 it had been given an £850,000 Scottish Enterprise grant to expand the Livingston site by moving production facilities there from China.

Labour's Neil Findlay has written to the convener of Holyrood's Economy, Energy and Fair Work committee, Gordon Lindhurst, calling for an inquiry into government support.

Mr Findlay wants the inquiry to examine how government grants, loans and other financial support are handed out, what conditions apply and whether or not this is a good use of public money.

He also wants the inquiry to discover how such money is recouped if the business awarded support fails to not fulfil its obligations relating to the initial award of the grant, and to look at how accountable companies and their directors are for the money given.

His letter says the actions of Kaiam are a "brutal blow to the individuals and families concerned and to the local economy".

He adds: "It is my understanding that Kaiam had been in receipt of Scottish Government financial support in recent years.

"Time and again we see companies being funded via grants or loans as part of a deal to get them to locate or stay in Scotland.

"This is of course an established and long-standing policy of many Governments across the world, past and present, however l think the time is right to examine these issues more closely and re-evaluate how effective it is."

Scottish Business Minister Jamie Hepburn said he is "very concerned" about Kaiam going into administration.

He said: "Scottish Enterprise has been working closely with Kaiam to explore all possible options to support the business and its staff.

"Unfortunately, a solution could not be found to turn the company's situation around.

"Scottish Enterprise will work with the administrators to understand the potential options for the business going forward and explore all possibilities to rescue the jobs.

"The individuals affected by this announcement are our immediate priority and we recognise the important role they play in our economy.

"We will do everything within our power to help those affected."

He said the Scottish Government's Partnership Action for Continuing Employment programme stands ready to help the workforce with skills development and employability support.