A British parliamentary committee has said it would launch an inquiry into the government’s role in the ultimately unsuccessful battle to save MG Rover, the last British-owned volume carmaker, which collapsed into administration last year with the loss of 6,000 jobs.
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According to the Guardian newspaper, the trade and industry committee said it would focus on three main areas: the role of the then trade and industry secretary, Stephen Byers, during the sale of MG Rover and its subsidiaries by BMW in 2000; the efforts of his successor, Patricia Hewitt, to help secure an alliance between MG Rover and the Shanghai Automotive Industry Corporation in 2005; and the effectiveness of the support package introduced after MG Rover went into administration.
The committee reportedly has ruled out an investigation of MG Rover Group itself and Phoenix Venture Holdings’ purchase of it from BMW.
The paper noted that inspectors from the Department of Trade and Industry are already conducting an investigation under the Companies Act and the committee reportedly said: “That investigation concerns the actions of private companies, which fall outside the remit of the committee.”
According to the Guardian, Peter Luff, the chairman, said his committee had hoped to wait until completion of the DTI inspectors’ investigation, but it had become clear that the inquiry had been delayed and might take several more years. “We could not wait that long. Memories fade and issues become less relevant,” he reportedly said.
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By GlobalDataThe newspaper reported that the committee said its investigation would “explore whether the government should have done more to save Rover or whether it intervened too much, and whether there are any wider lessons to be drawn on how to help big manufacturing companies which get into difficulties in the future”.
Byers, whose role in events leading up to BMW’s decision to put MG Rover up for sale has already been scrutinised by the committee, told the Guardian that he welcomed the new inquiry, saying: “Far too many people have been trying to rewrite the history of what happened at Longbridge. This will provide an opportunity to demonstrate the government’s approach at the time [2000] was the right one. We were able to maintain thousands of jobs in the medium term without a penny of public money while providing support to the engineering sector, particularly in the West Midlands, to diversify.”
The DTI told the Guardian it looked forward to cooperating with the inquiry. Roger Maddison, national officer for the trade union Amicus, reportedly also welcomed the inquiry. He said the union was “pretty pleased” with the government’s role in efforts to save MG Rover and added: “We are disappointed the committee will not be investigating the role of the Phoenix Four [MG Rover’s four directors who were much enriched by their purchase of the automaker and retained most of their money – including a huge pension fund – despite the firm’s demise].”
