Morning:
6°c
Government role in MG Rover collapse set to be revealed at last
Paul Waugh, Deputy Political Editor11 Aug 2009
Labour's doomed attempt to prop up MG Rover was set to be laid bare today with the publication of a long-awaited report into the car firm's collapse.
Lord Mandelson faced potential embarrassment amid speculation that the Serious Fraud Office would not launch a full-scale probe into the company's demise.
The SFO's decision would free the Government finally to publish a report into the affair that has taken four years and cost £16million to produce.
The Business Secretary was accused of attempting a cover-up last month when he called in the SFO to examine the firm's collapse.
Critics described the move as a cynical attempt to delay publication of the report until after the next general election. The independent investigators' findings are expected to be deeply embarrassing for the Government.
Insiders say the report will show how Labour wasted £6million of taxpayers money to prop up Rover to protect key Labour seats in Birmingham in the run-up to the 2005 general election. MG Rover collapsed in April 2005, leading to more than 6,000 employees losing their jobs.
The four executives in charge of MG Rover were reported last month to have taken out an estimated £30million from the firm in the five years they controlled it. Their company, Phoenix Venture Holdings, bought MG Rover from BMW for £10 in 2000.
They became known as the Phoenix Four and have said in their own account that Gordon Brown and his close adviser Shriti Vadera "pulled the plug" on MG Rover. Baroness Vadera is now one of Lord Mandelson's junior ministers.
Insiders said it was still possible that police could investigate the case, but the SFO's stance is seen as a major setback to Lord Mandelson's hopes of shunting the affair into the long grass.
A source close to Lord Mandelson confirmed that if, as expected, the SFO announces it will take no further action, the Business Secretary is likely to publish the report as early as today.
Richard Burden, Labour MP for Birmingham Northfields, home of the doomed Longbridge plant, said publication of the report would help former MG Rover workers achieve "closure on the closure" and put pressure on the Phoenix Four to pay compensation to those who lost their jobs.
"The closure of MG Rover has been like a giant collective bereavement here," he said. "People want to know what happened but they also want to move on."
A spokesman for the Phoenix Four -John Towers, John Edwards, Peter Beale and Nick Stephenson - said: "The directors have at all times willingly accounted for their actions.
"There have been numerous investigations into this matter and none has ever alluded to impropriety."
Reader views (3)
Hey leave us out of this!! Wasn't he compared to a crab anyway
- Lea Valley Toad, London, 11/08/2009 14:23
Report abuse
Perhaps Blair & Brown would like to repay the illegal "loan" they made to Rover during the course of the last election out of their own pockets.
- Roger, Winchester, England, 11/08/2009 13:23
Report abuse
Don't you just know that if Meddlesum's sticky paw marks are all over that "report" it will be a devious concoction of spin and waffle, smoke and mirrors.
The UNELECTED parasite has less credibility than a demented toad.
- Reuben Camara, Republic of Morecambe, UK, 11/08/2009 10:57
Report abuse
