THE taxpayer got a good deal out of the collapse of parcel firm City Link, according to the company's boss.

 

John Moulton, of Better Capital the company's owner said the amount of tax paid to the government was much greater than the amount the state will have to pay in redundancy.

City Link staff will be due around £4m in statutory redundancy, which will not be paid from the firm's assets.

While the staff get nothing, Better Capital gets back £20m, half of what it invested, out of the assets worth around £35m, Mr Moulton told MPs when he was giving evidence to the Scottish Affairs Committee at Westminster.

Mr Moulton also said staff overtime and wages will be paid as preferred creditor before the firm gets its £20m.

He said however that any money due as notice of redundancy would not be paid as there is no money left for that.

Mr Moulton was asked by Committee chairman Ian Davidson, Glasgow MP, if it was right that the tax payer picked up the bill for redundancy.

Mr Moulton said: "They (workers) will be reliant on the state paying out. About £4m I think.

"Around £75m has been paid into government in PAYE and taxes from City Link. It's a good deal for the taxpayer."

Mr Davidson said that money was paid by the workers in tax.

Mr Moulton agreed, but he added: "It is still £75m the government got it wouldn't have got."

Mr Moulton was told by another committee member he was walking away in a far better position that the workers and self employed contractors who trusted him.

He added: "I am aware of that. But we have lost £20m. We killed ourselves trying to save this company but failed."

He agreed with the suggestion it was "bad judgement" to have invested in the firm in the first place.

He said "With hindsight you are entirely right."

During a heated exchange between MPs and the firm's owner in the House of Commons Mr Moulton rejected suggesting the firm could have been trading insolvent.