Tony Blair wanted to save Longbridge with a £120?million Government loan but was thwarted at the eleventh hour by then Chancellor Gordon Brown, claim the Phoenix Four.
The allegation that Brown “pulled the plug” on the Birmingham car firm in spring 2005 is one of a series of criticisms levelled at the Government and the Department of Trade and Industry in the MG Rover Dossier.
The Dossier, issued by PR advisers Media House International, points the finger of blame for the closure of Longbridge, with the loss of more than 6,000 jobs, directly at Gordon Brown.
The document says: “The directors firmly believe one vital fact – Prime Minister Tony Blair wanted to save MG Rover. It was then Chancellor Gordon Brown who pulled the plug on advice from his special adviser Shriti (now Baroness) Vadera.”
It continues: “Having made the offer of a £120 million bridging loan, subject to PVH [Phoenix Venture Holdings] directors’ agreed contribution of £10 million, the offer was suddenly and mysteriously withdrawn.”
“MG Rover closed in April 2005. Four years later the workforce and the public deserve to be given the full reasons for its demise,” the report says.
“Various Government departments have refused all requests for information and are treating FOI with contempt. The inquiry has cost the taxpayer more than £16 million.
“PVH provided five years of high quality jobs for 6,000 people, not to mention between 20,000 and 30,000 supply chain jobs. Unlike the recent banking bail-outs, the Phoenix directors pledged substantial personal sums in support of the offered and then withdrawn short-term government loan.
“The DTI not only failed to support MG Rover but they poured millions into rival foreign manufacturers such as Ford, Nissan, BMW, Vauxhall and Peugeot.
“The DTI’s dealing with China was amateurish at best and malicious at worst. The Nanjing Automobile Corporation was appalled by the behaviour of the DTI under the then Secretary of State, Alan Johnson.”
The report says former Longbridge workers “still deserve to be given the full story behind the closure of the last independent volume car maker in Britain.
“All they have is an unfathomable referral to the Serious Fraud Office and yet more delay and obfuscation.
“The Department for Business, Enterprise and Regulatory Reform (BERR) gave several reasons as to why the inquiry into the closure took such an interminable time.
“These reasons included: ‘the inquiry is extremely detailed and needs proper time to draw the right conclusions’ or ‘the directors are having their legal advisors hamper the progress.’ Neither of these reasons were justifiable or true and the directors said so for some considerable time.
“The inquiry was led by Mr Gervase McGregor of accountants BDO Stoy Hayward and barrister Guy Newey, QC. The total cost attributable to the inspectors is over £16 million.
“However, this figure is only the tip of the iceberg. In fact the collapse of MG Rover has cost the British taxpayer hundreds of millions. Certainly the taxpayer could have avoided a further £150 million if the original joint venture with SAIC was still in place at Longbridge.
“It is not too difficult to quantify the above losses to the taxpayer. However what remains a major difficulty is why the 6,000 former MG Rover employees have been kept in the dark over the final days of their company.
“The four directors of Phoenix Venture Holdings – John Towers, Nick Stephenson, Peter Beale and John Edwards – are in a not dissimilar position, and still have no idea of what they are supposed to be accused.
“The dying days of the company were painful and the negotiations tortuous and the dealings with the Labour Government were characterised by leaks, lies, disinformation and double dealing.
“Since then the directors suffered a torrent of media abuse fuelled by the No.10 spin machine and designed to distance the closure of MG Rover as far away as possible from the door of Brown and Vadera.”
The report says that following MG Rover’s collapse, then Trade and Industry Secretary Patricia Hewitt asked the regulatory Financial Reporting Council (FRC) to conduct a review of the accounts of MG Rover and its associated companies for the past five years.
“The FRC report has never been made public after being suppressed by the Government. Lawyers acting for Phoenix Venture Holdings and Media House associates submitted more than 30 separate questions to various Government departments under the Freedom of Information Act.
“However, all requests for information that could shed light on Government thinking and decision-making during the crucial period before the £120 million short-term loan to save the company was suddenly abandoned have been denied.
“Yet none of the information requested could be judged to be commercially sensitive since MG Rover is now extinct.”
The report claims the Phoenix Consortium saved MG Rover from closure “at the eleventh hour.
“When the deal was signed, BMW’s liquidation team from Munich was already on the Lufthansa flight heading for Birmingham.
“In its five-year tenure the Consortium invested £1.3 billion in the company, raised from negotiated sources.
“Phoenix significantly reduced the huge losses being made by the company under BMW ownership. Losses in excess of £700 million under BMW stewardship were reduced to below £100?million under Phoenix. In its negotiations with SAIC/Nanjing, Phoenix negotiated a value for the company of £400 million.
“Phoenix was in the process of developing electric hybrid versions of the Rover 25, the Rover 75 and the MGTF. When the government precipitated MG Rover’s collapse, this vital technology, and the opportunity for a lead on electric vehicles, was lost to the UK.”
The report concludes: “It is clear that since the demise of MG Rover, there was a concerted campaign to lay the blame at the door of the directors of Phoenix Venture Holdings.
“Despite Gordon Brown and Shriti Vadera’s lack of conviction about the ultimate Joint Venture process that the £120 million loan was meant to facilitate, the essential elements of that JV have now been put in place, independently by the now merged Nanjing and SAIC, but at an enormous and unnecessary cost in terms of jobs and taxpayers’ money.
“The conclusion that we have reached is that the Government is doing and will do anything to disguise the role played by senior political figures in the closure of MG Rover.
“And, as in the recent revelations over MPs’ expenses, it is clear that adherence to Freedom of Information means nothing to this Government.”