Press Report : Ministers face MG Rover payout fury
Jonathan Walker, Birmingham Post, 7th July, 2009
Former MG Rover workers will have to wait until the end of a fresh inquiry into the fate of the Birmingham carmaker before a long-awaited £16 million compensation fund can be released, Ministers have said. They issued the blunt statement to 6,000 people who lost their jobs when the Longbridge factory closed, as MPs warned there was growing “fury” at yet another delay.
The Government confirmed yesterday that a report into the collapse of Rover, which took four years to complete and cost £16 million, had been referred to the Serious Fraud Office. Ministers said they had no idea how long it would take before the report was published, because the Serious Fraud Office was an independent organisation.
However, the Conservatives claimed the decision was a deliberate attempt to delay publication until after the next election. Ken Clarke, the Shadow Business Secretary, said the Rover staff were “innocent victims” of the Government’s decision, because it meant they were still waiting for money from the £16 million Rover Trust Fund.
The fund was set up by MG Rover chairman John Towers and the Directors of Phoenix Venture Holdings, MG Rover’s parent company, in 2005. It stores cash raised from the Phoenix’s assets, and could lead to payouts of more than £2,600 per worker but the money cannot be released while Phoenix’s management of the business is under investigation.
I am very well aware of the position of those employees and former employees of the MG Rover Group and of the trust fund. I’m afraid that it is quite appropriate for these matters to be referred to the Serious Fraud Office. Until that inquiry and that investigation by the Serious Fraud Office is resolved, I regret that no further steps can be taken with regard to the trust fund.” Ian Lucas MP, Business Minister
That meant former Rover staff had to wait until an inquiry under the Companies Act, ordered by the Government four years ago, was completed. Inspectors finally presented their findings to Lord Mandelson, the Business Secretary, last week but he has referred them to the Serious Fraud Office, which means yet another delay.
Business Minister Ian Lucas insisted the Government could do nothing to speed up the process, as he faced a grilling by MPs. He said: “I am very well aware of the position of those employees and former employees of the MG Rover Group and of the trust fund. I’m afraid that it is quite appropriate for these matters to be referred to the Serious Fraud Office. Until that inquiry and that investigation by the Serious Fraud Office is resolved, I regret that no further steps can be taken with regard to the trust fund.”
However, Mr Lucas faced scathing criticism from Mr Clarke, who said: “Isn’t it obvious, the whole point is to continue to avoid publication, and to avoid answering questions about the Government’s own role in this embarrassing affair.”
Liberal Democrat MP John Hemming (Lib Dem Yardley) said the Phoenix Directors should be asked to donate more money into the trust fund. Labour MP Gisela Stuart (Edgbaston) said: “After four years the most important thing in this affair must be the workers, and I do think they have a right to look to us to resolve this as soon as possible.”
A spokesman for the former MG Rover Directors said: “At no stage during the last four years of the Government inspectors’ investigation has there been any suggestion of fraud.”
[Source: Birmingham Post]