Press Report : No payouts from “cynical” MG Rover Trust Fund
Channel 4 News, 13th July, 2010
A trustee of the MG Rover Trust Fund, which had promised compensation for workers who lost their jobs with the collapse of MG Rover five years ago, has told Channel 4 News he has been left feeling “very cynical” over its failure to pay out any money.
6,500 workers received less than a week’s notice before losing their jobs in April 2005 when MG Rover went into insolvency with debts of £1.4 bn.
A trust fund to compensate former workers at its Longbridge plant in Birmingham has still to pay out any money.
The trustees have not met for four years, and Channel 4 News understands just £20,000 has been paid into the trust – to cover its administration costs.
Professor Carl Chinn, one of four members of the MG Rover Trust Fund along with the former bishop of Birmingham John Sentamu, told Channel 4 News he feared its creation may have been a ploy to head off criticism of MG Rover’s management.
“They may have set it up voluntarily, and it may have been out of the goodness of their hearts. But it may have been to get good publicity of the Rover crisis and the collapse,” he said.
“It’s made me feel very cynical for the last five years.”
The former worker: “It’s a moral issue”
Sid Blenkiron had worked for MG Rover, in its various forms, for 38 years. He remembers being told on the Friday that wouldn’t be required for work on the Monday. Since then, he has struggled to find full time work.
He wants to use his considerable skills and to provide for his family. His wife is in ill health and should have retired three years ago – but the family would struggle financially if she did.
“It’s just a moral issue,” he told Channel 4 News. “It’s the follow up, it’s the confirmation of a promise made five years ago to the former employees of this company and they have reneged on that promise.”
The former MG Rover management, known as the Phoenix Four, took an estimated £42m in pay and pensions from the troubled firm as the company collapsed.
Last year, a report for the Department for Business, Innovation and Skills described the payouts as “unreasonably” large.
The four businessmen – former MG Rover Chairman John Towers, Vice-Chairman Peter Beale, Nick Stephenson and John Edwards – bought MG Rover for a nominal £10 from owner BMW in 2000 described the report as a “witch hunt” and a “whitewash for the Government”.
Workers had been hoping for payments of up to £2,500 from the trust fund.
The company’s former management said they had £12m to put into the fund, but that payment had been delayed following a claim by HBOS, a company creditor.
Ramsey Smith, a spokesman for the Phoenix Four, denied the trust fund was designed to attract good publicity.
“The trust fund was established voluntarily initially by the Directors,” he said.
“The legal advice they were given at the time was, until the winding up process of the MG Rover Companies was complete, it would be illegal to pay out money from that trust fund.”
HBOS said it had a duty to recover money it was owed.
Vince Cable, the Business Secretary, has said it would be “inappropriate” to intervene in what his Department called as a commercial arrangement.
The poet: “Where has the Rover trust fund gone?”
Giovanni Esposito (known as Spoz) worked at Longbridge for 25 years, starting when he was just 16. His former work area has now been reduced to a pile of rubble.
He has now forged a new career as a poet – and says there is plenty in the behaviour of his old bosses to provide inspiration for his latest verse:
“Where have all the flowers gone, Joan Baez once sang.
And as the sentiment rang like tinnitus in my ears, a reality dawned on my hopes and fears.
Where has the Rover trust fund gone? Five years past and we’ve still had none.
The minion’s millions, or just a con.
Forgotten heroes every one.”
[Source: Channel 4 News]