A UNION has reiterated calls for a Parliamentary inquiry into the “absolute scandal”

of a cable maker’s collapse.

GMB says a full investigation must be launched into Ducab’s AEI Cables’ operation, based in Birtley, near Chester-le-Street.

It added the company’s decision to enter into a Company Voluntary Arrangement (CVA), meaning staff will have to apply to the Government for statutory redundancy pay, was a “disgraceful practice”.

However, an AEI spokesman last night refuted the claims, saying Ducab, which rescued AEI in 2014, is doing all it can in the face of difficult trading conditions.

The GMB has accused AEI of using the CVA as a “ruse” to avoid redundancy payments for hundreds of staff, saying it believes the firm’s order book stretches into the multimillion pound bracket.

Tom Allison, senior organiser, said: “It is an absolute disgrace that Ducab/AEI are leaving the taxpayer to foot the bill. It is an absolute scandal.

“We are now calling on a full Parliamentary Committee Inquiry, as well as Parliament to debate this horrendous situation.”

However, the AEI spokesman denied the claims, saying the business, which plans to replace manufacturing at Birtley with a sales-only business at a yet to be announced base, is trying its best to resolve the situation.

He added: “The CVA will enable work to continue, while paying creditors, and preserves the jobs of the AEI sales and commercial team.

"The intention was to bring the business back to profitability but unfortunately cables can no longer be profitably manufactured on the site.”