UK: car workers, crooks and the Phoenix Four

Interesting goings on over the ashes of Rover, what was left of Tony Benn’s British Leyland by the time reality had begun to creep up.

In 2000 BMW, which had bought the group, decided it was beyond saving (something any British taxpayer could have told them several millions earlier). BMW had received government support and knew it would have to leave decently (ie tossing some more cash in). There were two bids. One, from a private equity firm called Alchemy, said quite openly that the only part worth saving was the MG sports car group and gave its proposals: the rest would be abandoned and the workers laid off.

Alchemy’s proposal was too much (ie too honest) for the then DTI Secretary, Stephen Byers, who was brokering the deal using our money. He went for the only alternative, a bid by the ‘Phoenix Four’ led by John Towers who had previously run the group (not, you might have thought, a great thing to have on your CV). The Phoenix bid claimed to save mass production of cars in England. Anyway Byers, terrified of the response of the unions, and in the middle of an election campaign adopted the bid, seemingly without looking at it too closely. Of course taxpayers’ money went in - £6.5 million was the last instalment but there had been many more before that.

We knew three or four years ago that these people took out around £40 million in cash and pensions while the company went under. While we are on the subject of overpayment for work done or not done, it should be mentioned that we seem to be no further on now after a report which took four years to write and cost £16 million. Peter Mandelson delayed the publication of the report, again for party (or personal) poitical reasons.

The Government is not criticised by the report, due to its terms of reference (these people aren’t fools). What we need is a report (costing a fair bit less than £16 million) to determine whether Stephen Byers made the right decision (the workers would have been laid off 5 years earlier but would have got their full redundancy money and pensions which they didn’t in the end), whether he was negligent in not preventing asset stripping of the rump of the company for private gain (don't forget it was our money which went into this) and whether he made that decision in the interests of country / economy / workers or for narrow party political reasons.

Naturally no such report ill ever be commissioned. Labour Party politicians have saved their necks and the people who have suffered are the workers they claimed to represent.