MG Rover

Nick Boles Excerpts

Wednesday 18th March 2015 Westminster Hall

[The Minister for Skills and Equalities (Nick Boles)]

It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate the hon. Member for Birmingham, Northfield (Richard Burden) on securing a debate on a matter that is of such painful importance to so many of his constituents and the communities he represents.

It is perhaps rare but also important that we do not just talk about what is happening today and over the next six weeks—it is easy for us all to become caught up in that—but that we look back at the past and try to make sure that we are always learning lessons from things that went wrong to ensure that they do not happen again. It is obvious that the collapse of MG Rover and the closure of the Longbridge plant was a devastating blow to the community and to the many thousands of people and their families who depended on the jobs they had in that company.

It is a matter of great regret that the people who took over MG Rover when there was an earlier threat of collapse did so without, frankly, proper intentions to build the company and secure its long-term future. Instead, they acted in ways that led to their disqualification as directors or managers of limited companies. Their conduct as directors was found to have fallen well short of the standards of commercial probity and the general conduct befitting the director of a limited company. Frankly, I hope that their part in such a shameful episode that caused so much pain to so many people, and such loss to the community that the hon. Gentleman represents, is a matter of great personal shame to the individuals he has named. I also hope that he agrees that the disqualification penalties that those individuals suffered were appropriate, but he is right to point out that they have not suffered financially in the same way that many of his constituents have. I completely understand why he and many of his constituents feel an abiding sense of injustice at the distribution of the penalties for the failure of MG Rover between those who ran it and those who worked for it so loyally for so long.

The hon. Gentleman referred to the Financial Reporting Council investigation into the action taken by the company’s auditors, which led to a fine that the auditors then appealed. He is right to say that the appeal is ongoing and it is not yet clear what fine will be imposed. He suggested that, when that fine is finally levied, the Financial Reporting Council should consider making the proceeds available in some form to the local community. He will understand that the Financial Reporting Council is an independent body established by the accountancy profession, so it would not be proper for me as a Minister to issue any direction or even guidance, but I will say that he made a very strong argument with which many people with a sense of natural justice will have sympathised. I have no doubt that, when the fine has been determined and is about to be levied, the members of the Financial Reporting Council will have heard him and will no doubt want to respond directly with their thoughts on the matter. I can think of no better use for such a fine than the one he suggested.

The hon. Gentleman asked about the Pension Protection Fund. I agree that it was a fortuitous fact for which we should all be grateful that the fund was introduced in advance—just—of the failure of MG Rover, so that many people were at least able to benefit from that level of protection of the lifelong savings that they had worked so hard to put aside. He also asked about the indexation rates. I am afraid I am not an expert on that, but I will encourage officials in the relevant Department to respond to him directly on his concerns about the indexation rates that apply in that scheme.

The hon. Gentleman asked how, had they been in force at the time, the current rules on access to employment tribunals would have affected his constituents following the failure of MG Rover. That is another subject on which a different Department, in this case the Ministry of Justice, leads. Nevertheless, he will know—and it is important that the public know, so that they are not unnecessarily afraid of the circumstances, should they become victims of a company’s failure—that people can apply for an exemption from or reduction of employment tribunal fees. That way, people with limited means are not excluded from seeking redress. About a third of applications for fee remissions by people making a tribunal claim are successful. He made a reasonable point when he said that one consideration in assessing such applications could well be the circumstances that had led people to go to an employment tribunal, such as the failure of a company in the manner he described.

[Richard Burden]

I am grateful to the Minister for the spirit in which he is approaching the debate. I recognise that the matter does not fall under his portfolio, but my point is that although remission can be awarded, the problem is that it is all retrospective. People need confidence when they lose their jobs, not afterwards.

[Nick Boles]

I understand the hon. Gentleman’s point. He referred to the role of trade unions. Perhaps to the surprise of some members of the Labour party, I am generally a supporter of trade unions, because there are occasions—he has outlined one of them—when they have a very important role representing their members and bridging any difficulties that they have in accessing justice. The hon. Gentleman is aware that the Government have announced a review of tribunal fees. I would not want to prejudge that, but he has made a powerful argument about how they might operate in circumstances such as those at MG Rover.

What I am about to say will not necessarily come as much comfort to the individuals who lost their jobs at MG Rover, because although many—indeed, most—found other jobs, the pain and loss that they experienced will never be removed from their memories. Nevertheless, it is important that we reflect on the wider success of the automotive industry, including some at the Longbridge site, as well as of the communities that the hon. Gentleman represents and the wider west midlands. It has been a remarkable feat, almost entirely the work of the people he represents. They have managed to pick up the automotive industry from a pretty dismal place and turn it into one of the most successful automotive industries anywhere in the world. Would that it had happened within the form of MG Rover and without the traumatic experience that so many of his constituents had to undergo, but I am sure that he too would like to thank and pay tribute to those who have managed to rebuild British car manufacturing to its current position and to celebrate the rapid growth in manufacturing employment in his constituency and the broader west midlands region. Long may it continue.

[Mr John Spellar (Warley) (Lab)]

I know that time is tight for the Minister, but in acknowledging the role of the companies and the work force, will he also pay tribute to the constructive long-term work of the unions in bringing about that success?

[Nick Boles]

I am happy to do that. Revivals of this sort are never the work of one party or another; they are almost always the result of effective collaboration between far-sighted investors, hard-working and committed employees and trade unions that want to achieve success for everyone because that creates jobs and increasing wages. I am therefore happy to pay that tribute. We can all look forward to continued growth, more jobs, more exports and better wages for people working in the automotive sector and its supply chain in the west midlands.