Carcraft

Simon Danczuk Excerpts

Wednesday 10th June 2015 Westminster Hall

[Simon Danczuk (Rochdale) (Lab)]

I congratulate my hon. Friend the Member for Heywood and Middleton (Liz McInnes) on not only securing this important debate but championing this issue locally and nationally. For those who are not aware, the constituencies of Rochdale and Heywood and Middleton are coterminous with Rochdale borough and, as she pointed out, Carcraft has existed in our constituencies since the 1950s, which is one reason for my speaking this afternoon. I declare an interest, because my wife worked at Carcraft’s headquarters when we first met a number of years ago—I thought it would be right and proper to put that on the record.

There is no doubt that the closure of Carcraft is a massive issue in Rochdale borough. I join my hon. Friend in saying that my thoughts go out to the staff who lost their jobs; it is a true tragedy for the reasons she outlined. The economic recovery remains fragile north of Manchester and in and around Rochdale, and the loss of so many jobs makes the situation much more difficult. It will not be easy for those who have lost their job to find alternative employment. Credit goes to the Government for many of the jobs that have been created, particularly in the private sector, but the situation is fragile. She is right to say that many of those jobs are temporary and, particularly in the area we represent, casual. It will be difficult for the former employees of Carcraft.

Carcraft was something of a local institution, and my hon. Friend gave a flavour of that. Some people loved Carcraft and some people loathed it. Most people have a story to tell about Carcraft. Some of those stories are good; some of those stories are not so good. We have to bear it in mind that, ultimately, the business sold used cars. That is an issue about which emotions run high, but some people clearly had an adverse experience when dealing with the company. Either way, Carcraft was generally seen as a positive for Rochdale borough. It created many jobs, and in some ways it helped to put Rochdale borough on the map. People were aware of Carcraft, and they travelled to it.

The McKee family established the business back in the 1950s, and the family have always made a big contribution locally—they regularly make a big contribution to charities locally—which is worth putting on record. I have met Noel McKee, one of the brothers who helped to run the business before it was sold, on a number of occasions, and one cannot help thinking that the business would not be in its current position if the family were still involved, and I do not say that lightly. The McKee family guided the business through many downturns in the economy over many decades. They guided the business through the last recession before the management buy-out. The McKee family seemed to have the business skills and ability to make the business work, and perhaps Carcraft would not be in its current situation if they were still involved.

I am pleased to hear that the Insolvency Service is involved in trying to establish what went on with Carcraft’s most recent management. I am also pleased that Rochdale Borough Council, as my hon. Friend said, has been doing what it can to assist those who lost their jobs, and to redirect customers to support and help, where required. I know from personal experience that it is not easy to close a business, particularly when it has been unsuccessful, but we need to examine the details. I hope the Minister will consider a number of my following points. Was the conduct of the directors involved right and proper? Were fair and proper practices followed? Was reasonable attention given to both employees and customers during the closure of the business? Carcraft was a major UK business that served thousands of customers. As my hon. Friend the Member for Heywood and Middleton pointed out, the sale of warranties, MOTs and financial services was exceptionally lucrative for the company; that was where it made a lot of its money. The business was not always about the sale of a car; it was about the sale of financial services. We have to ask questions about that. I am concerned that many customers may have been treated unfairly because of the directors’ decisions and actions.

Customers, employees and supplier businesses deserve answers. I am saddened that a business synonymous with Rochdale borough has closed. I am upset for the employees and customers who may have been treated so poorly, but I am hopeful that the Minister and her Government will help us to understand what went so terribly wrong with this business.