Newspaper article The Evening Standard (London, England)
Tell Us the Truth about MG Rover
Endless summer THE GOVERNMENT cannot possibly defend suppressing the Financial Reporting Council's probe into the collapse of Britain's last volume carmaker, MG Rover. It beggars belief that the new Industry Secretary, Alan Johnson, can even consider hushing up a corporate disaster in which around 6,000 people lost their jobs, a reported [pounds sterling]427 million black hole appeared in company accounts and four businessmen benefited to the tune of [pounds sterling]40m thanks to bungled government intervention by Mr Johnson's predecessor but one, Stephen Byers. If Mr Byers had chosen Alchemy to take Rover on when BMW sold it in 2000, instead of the Towers partnership, at least some jobs might have been preserved. Instead the entire workforce now faces unemployment, and in many cases, uncertainty over their pensions. Patricia Hewitt, meanwhile, who took over from Mr Byers, has been rewarded with a new job in return for shutting down the Rover affair during the election campaign. Her successor seems to be taking an approach which is no less cynical. This is simply not good enough.
No one is suggesting that Rover, once a proud part of Britain's motoring heritage but latterly a small player in an oversupplied market, could have been saved simply by writing a cheque (though Ms Hewitt tried that, too, in the final days). But the reasons why government intervention in Rover's sad decline made matters worse need to be brought into the open, so that the same mistakes can be avoided in future. Tony Blair and Gordon Brown may believe they can bank on the City's support. But against a backdrop of weakening economic confidence, the Government that appalled investors with its handling of Railtrack's administration needs to show it can learn the lessons of its failures when intervening in corporate matters. …