Brown hints at inquiry over 'Rover bosses' millions'

British Chancellor Gordon Brown today indicated that claims MG Rover bosses made millions may be part of a future investigation into the ailing car group.

British Chancellor Gordon Brown today indicated that claims MG Rover bosses made millions may be part of a future investigation into the ailing car group.

He also said the British government was prepared to put more money into a package to help firms hit by the Rover crisis.

Asked if it was right that top Rover directors have benefited by millions of pounds, Mr Brown said that while the possibility remained of saving jobs, it was time for everybody to pull together.

“I think we can look at all the consequences of what has happened in the past at a later date,” he said.

“But at the moment we have to look at what we can do to help the existing jobs, the existing manufacturing work, and the existing skills.”

He went on: “There will obviously be inquiries into what has happened in Rover since the deal with BMW.”

Mr Brown was speaking on the General Election campaign trail, which today took him to Edinburgh where he spoke at Alistair Darling’s adoption meeting as Labour candidate for Edinburgh South West.

The Chancellor’s comments came as Trade and Industry Secretary Patricia Hewitt sent a team of her officials and advisers to Longbridge to meet the administrators as efforts continued to revive a rescue attempt.

Mrs Hewitt yesterday unveiled a £40m support package for firms supplying the Longbridge plant, to give them a breathing space and head off supply chain job losses.

Mr Brown said today: “We will continue to do everything in our power to help Rover, Longbridge and supply companies for the Rover factory.

“It is the job of government to be on the side of people as they face difficult situations.

“We have already made some money available to help the supply companies and we will announce more in the next few days if it becomes necessary.”

Mr Brown said he had written to China’s finance minister and had spoken to him in recent days.

“I have been in China myself and raised these issues,” he said.

“Patricia Hewitt has put £40m in yesterday to help the supply companies and we are prepared to do more.

“This is the time to concentrate on helping the jobs and the skills at Rover.

“At a later stage we’ll review what has actually happened.”

Mr Brown said that when he was in China, the Shanghai Automotive Industry Corporation (SAIC) was examining the long-term financial condition of Rover and its ancillaries.

“That was the process that was at work a few weeks ago and clearly, as the Shanghai company has said, the joint venture that was being proposed did not look as good to them when they looked into the detail of the figures,” said the Chancellor.

“That is clearly what’s being said publicly by the Shanghai company.

“That is the issue they raised with Rover, they made a public statement about it, but there are many other ways that parts of the company could be looked at in future, and the administrator will be looking for expressions of interest.”

Mr Brown went to to pledge: “We will do what we can to help fight for manufacturing and skills in the area.

“When changes are taking place, you need a government that is on your side prepared to help people with their jobs, skills and livelihoods and help the communities in the area.”

He said the problem with the loan the Government had been prepared to offer was that it was a bridge to nowhere – “you have to have a bridging loan that bridges to something.”

“The Shanghai company have made it clear that at that stage, they were not going ahead with the deal, but we are obviously prepared to look at other arrangements if they are proposed in the next few days.”

Mrs Hewitt has also written to the Chinese Government and to the Shanghai Automotive Industry Corporation as part of the Government’s efforts to secure some form of car manufacturing at Longbridge.

Conservative MP Julie Kirkbride said that the Government’s interference in BMW’s sale of MG Rover five years ago had paved the way to this week’s events.

Ms Kirkbride, a member of the Rover Taskforce, whose Bromsgrove constituency includes part of the Longbridge plant, told the Press Association: “Five years ago, Alchemy offered a realistic future for MG sports car production at Longbridge, employing some 2,000 people.

“But Labour’s interference forced a sale to Phoenix Venture Holdings instead, with the unedifying prospect that we will now have no jobs, no car production and a clique of millionaire directors who take the assets of the business and the Labour Government for a ride.”

Sir Michael Edwardes, who was chairman of British Leyland in the late 1970s, said that hopes for British-owned volume car production in the UK were now a “pipe dream”.

It would take a “miracle” to save Longbridge, which would need investment of more than £1bn.

There had been under-investment in the mid-range car sector since before his time, and the Rover business had been doomed for at least 10 years, he said.

Sir Michael told BBC Radio 4’s Today programme: “The mid-car range has never had the investment, in my day, before my day or after.

“Longbridge has real difficulties. I think it will be a miracle if the mid-car range can be saved.

“The Chinese, of course, will want to manufacture in China. Maybe a deal can be done. I would be very doubtful about Longbridge surviving.

“I don’t think the mid-car business had a future even 10 years ago. Indigenous volume car manufacturing in Britain is probably a pipe dream.”

Later a Government official reacted to Ms Kirkbride’s comments by saying: “There is increasing impatience and irritation among the workforce and unions over politicians picking over the bones of what happened five years ago instead of concentrating on what needs to be done today and tomorrow and in the coming weeks.”

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