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MG Rover

: I am sorry, but I cannot give way; I have many questions to answer, and I fear that I will not get through them all if I do. In the end SAIC made it clear that it was not confident of the future solvency of MG Rover, so there was no reasonable prospect of a deal. The Government stood ready to issue bridging finance of more than £100 million, but without a deal there was no possibility of a bridging loan, and SAIC indicated that such financing would not have resolved its concerns. It is not correct to say that the period for the loan changed from six months to two. The collapse of the deal led to MG Rover and Powertrain going into administration on 8 April. At that point it was clear that the Chinese would not proceed with the deal as contemplated. It was also clear that the Government would be unable to advance a substantial bridging loan, so the directors of MG Rover were obliged to put the business into administration. On 7 April the then Secretary of State spoke several times to John Towers—who made it clear that the directors had no option but to put the companies into administration—and she made the statement that evening. The administrators were called in on the morning of 8 April. That was inevitable, and would have happened whether the Secretary of State had made that statement or not. However, the development, unwelcome as it was, presented new possibilities for the sale of the company without the historical liabilities that had been among the key stumbling blocks in the way of the proposed SAIC deal. Over the weekend of 9 and 10 April, the Government decided to make a loan of £6.5 million to the administrators. That allowed options for the sale of the company as a going concern with an available work force to be pursued for a further week. It was a justified and proportionate decision, taken in the light of the information available at the time about potential purchaser appetite. Sadly, it became clear during that week that a quick deal with certain liabilities excluded would not be forthcoming, and the administrators were forced to make most of the employees redundant. The fate of the assets is still in the hands of the administrators, and it is not for me to speculate how and to whom those assets will now be sold. The Government will be supportive of any proposal presenting a viable economic future for parts of the MG Rover business. As soon as the fact of administration was known, the Government put into place a contingency plan that we had been developing over the course of several months in case the deal was not done. Some of this was announced by the then Secretary of State on 8 April and some the following week, on 15 April, once it became clear that SAIC would not immediately buy the business as a going concern. In total, the Government allocated £150 million to that support package. The former Secretary of State also set up the MG Rover taskforce led by Advantage West Midlands. That brought together stakeholders from across the region, including my hon. Friends the Members for Birmingham, Northfield and for West Bromwich, West (Mr. Bailey) and, until he became a DTI Minister, my hon. Friend the Member for Dudley, South (Ian Pearson), as well as the hon. Member for Bromsgrove (Miss Kirkbride), to advise Government and local agencies on how best to respond and deliver the emergency package. The response was rapid: on Monday 11 April a range of measures was in place. They included the MG Rover Jobcentre Plus hotline; a planned emergency package of support to help workers to find new jobs and develop new skills; a website giving advice and contact details; a package of tailored support for companies in MG Rover's supply chain; a telephone hotline for companies; a meeting at Birmingham chamber of commerce to help with proposals; and a helpline established by Birmingham city council. That work has continued over the succeeding weeks, delivering what the employees are entitled to with great efficiency. For example, the redundancy payments service paid each claim an average of 3.2 days ahead of its target of six weeks. The way in which the Rover taskforce, Advantage West Midlands, Business Link and so many others responded was nothing short of magnificent. In the first month alone, £1.5 million was paid out to safeguard more than 2,000 jobs in the supply chain, nearly 10,000 calls were taken by the Jobcentre Plus hotline and nearly 5,000 new job vacancy opportunities were offered through the employer hotline. As of 10 June some 5,500 individuals from MG Rover and its suppliers have contacted Jobcentre Plus. Some 649 of those individuals have been placed in jobs by Jobcentre Plus, and others may have found work independently. Some 2,510 have training plans, and 2,219 of those have been booked on courses. Some 461 have started training. In response to the question asked by the hon. Member for Bromsgrove, I should say that up to £50 million is available for training for workers made redundant at MG Rover and its suppliers. Money is not an issue with training places, although I understand that there is some difficulty about the availability of training staff, which needs to be followed through. For training, some £5 million, drawn from forecast underspend in 2005–06, has come from the DTI, £5 million has come from the Department for Work and Pensions, £10 million has come from the European Social Fund, and priority access to the existing £25 million has come from the employer training pilots in the west midlands and nationally. I hope that that goes some way towards answering the question asked by the hon. Member for Wealden (Charles Hendry). HM Revenue and Customs has spoken to more than 400 companies to discuss deferring VAT, national insurance and PAYE. Almost 50 deferrals have been agreed, amounting to more than £4.7 million, and more than 2,900 employees from 154 supply chain companies have benefited from the wage replacement fund. A transition loan fund has been set up and is operating. The fund is for companies that have been damaged significantly by the collapse of MG Rover, but have a viable business plan that needs additional finance in the short to medium term to enable them to respond to the traumatic event. My hon. Friend the Member for Birmingham, Northfield asked about tracking the impact of training. I agree that it is vital to track that impact, which is why we have asked the MG Rover taskforce to report after six months on the lessons learnt and make recommendations to the Government. I listened to the proposal advanced by my hon. Friend the Member for Birmingham, Hall Green (Steve McCabe), and am sure that the DTI will consider the issue further. My hon. Friend the Member for Birmingham, Northfield expressed several concerns today, the first of which related to benefits and the 16-hour rule as a disincentive to train. He will know that this is an issue primarily for the Department for Work and Pensions, but I can tell him that financial support is available, through the allowance payment system, to jobseekers who need to access specific training provision to help them to return to work. Allowance payments can be made to people accessing work-focused provision through Jobcentre Plus and its partner organisations. Former MG Rover workers who have been referred to work-focused provision are currently being supported in that way. Our preliminary analysis of redundancy pay in lieu of notice in insolvency cases is that very few workers will receive less than the statutory £280 a week as payment in lieu of notice, despite the statutory need to mitigate damages. The Pension Protection Fund will protect members of defined benefit schemes by paying compensation if their employer becomes insolvent and the pension scheme is underfunded. We are very aware that this is a worrying time for Rover workers, but pensioners are currently receiving their pensions in full, and we believe that it remains a question of when, not whether, a PPF assessment period will start. That is the start of the PPF's formal involvement in the scheme. At the moment, the Rover scheme has not yet entered an assessment period because one of the participating employers is still solvent. In the final minute available to me, I shall discuss the issues of the investigation. On 31 May 2005, the current Secretary of State for Trade and Industry appointed inspectors to investigate and report on the affairs of the MG Rover group, including Phoenix Venture Holdings and MGR Capital Ltd. The public interest requires that the issues raised by the financial reporting review panel and by developments after 2003 when the last accounts were published be investigated by independent inspectors. The Secretary of State has asked that the inspectors report as quickly as possible, in a form that will enable the report to be made public. The inspectors will decide what is relevant to investigate, and the DTI will co-operate fully with the inspectors.