TUESDAY 23 MAY 2006

RICHARD BURDEN MP

  Q39  Chairman: Well, Richard, this is gamekeeper turned poacher or the other way around. Which is it?

  Richard Burden: It is nice to be back.

  Q40  Chairman: I think for once I will dispense with the normal duty of asking you to introduce yourself, unless you want to.

  Richard Burden: No, that is absolutely fine.

  Q41  Chairman: Since you submitted your written evidence to us, the focus of this inquiry has shifted, as you recognise, rather more to the consequences of looking to the future but your written memorandum responded very well to the original terms of reference of the inquiry and we are grateful for that. If there is anything you want to say about the history by way of introduction, we would be delighted to hear that, otherwise, we will crack straight on with the questions.

  Richard Burden: I am happy for the evidence to stand. Obviously, if anybody has any questions on that area I am happy to talk about that. Equally, I understand from the Committee's press release that you may be returning to the broader aspects of the MG Rover story at a later date and I repeat my offer that if you do return to that, I am very happy to come back and give evidence at that time.

  Chairman: May I say also we had hoped to have this evidence session in Birmingham but, sadly, business on the floor of the House of Commons this afternoon made it a little difficult for some of our colleagues to absent themselves from the lobbies, so we are in London instead. Sorry we cannot be in Birmingham.

  Q42  Mr Hoyle: Richard, obviously you know the Task Force better than most, but in your judgment how successful was the MG Rover Task Force in helping MG Rover employees? Was it swift enough do you believe in its response? When we look at it, which of the emergency measures were pluses and which were minuses? Which were the good parts and which were the bad parts?

  Richard Burden: I think overall it was pretty successful. That is not to be complacent, and perhaps we can talk a bit later about some things that could have been done better and could be done better in other situations in the future. I think the first thing I would say is that it would be wrong to look at the experience of this Task Force in isolation, the 2005-06 Task Force, because there was also another one in 2000 and, indeed, many of the initiatives that were brought into effect in 2005 were things that were being thought about in 2000 when the company could have gone under then. There was a tremendous amount of work done between 2000 and 2005 that made the work of the Task Force a lot more effective when it came to 2005, most notably the great work that was done in diversification of the supply chain in the West Midlands and beyond. In terms of the numbers of MG Rover employees who have found other jobs, I think the record there is pretty impressive and we think it is around about 69% who are in work. There are 80% who have gone off benefits. There is a mis-match between those two figures but, on the conservative side, about 69%. The training support offered was speedy and has been very useful. The scale of it was a bit like setting up a small college overnight and about 1,900 people have been through training, I think 1,946 is the figure. All of those are plus points. The speed of the response was very impressive. The Task Force was set up virtually as soon as the company went into administration. It had all the relevant partners on it, the trade unions, local politicians—myself and Julie Kirkbride—the local authorities, the private sector and it had the academic institutions. What that allowed was when problems came up, whether it be problems of joins between different government departments, whether it be issues of a car leasing scheme that MG Rover had introduced that when the company collapsed caused all sorts of difficulties for employees, or whether it be sorting out training problems there, you had the right people in a room together to be able to do that. The last thing I would say on this question is I do not think we should consider the Task Force to be purely the people who met together at Advantage West Midlands in the centre of town weekly, and then subsequently biweekly and monthly. Their work would not have worked were it not for the staff of Jobcentre Plus, the Learning and Skills Councils, the colleges on the ground, people in Her Majesty's Customs and Revenue and the trade unions but, equally, the local community as well. There has been a great deal of community support activities that were operated then and continue to this day and some of the most prominent people on that were not members of the Task Force. A name that springs to mind is Gemma Cartwright who has the role of leader as the Rover spouses, their role has been absolutely invaluable.

  Chairman: It is helpful that you mentioned the Task Force and your and Julie's membership of it, I do know if it counts as a declaration of interest but it is helpful to remember that you both were members of the Task Force, for the record.

  Q43  Mr Hoyle: You have touched on how they all came together and the speed they worked at. Do you think the various agencies were up to speed quickly enough or do you think one or two of them were a bit slow off the mark?

  Richard Burden: The agencies themselves clicked into operation very quickly and very successfully. Let me give an example: the Insolvency Service was processing redundancy payment claims in two days and normally that would take a number of weeks. Those sorts of things are impressive. Where there was a problem, and it is something to learn for the future, was sometimes the rules and regulations of particular departments do get in the way of each other. To give you a couple of examples on that, one is the inter-relationship between Jobseekers Allowance, redundancy payments and payments in lieu of notice if a company goes bust without any notice being given to the employees: you could find, without a great deal of creativity, that employees could be given a benefit with one hand and end up losing it on the other hand. By and large that did not happen but you needed those people in the room to say "My god, if we do this, we are going to hit that over there". The other one, the classic example which we need to learn from for the future, is regulations like the 16-hour rule and the 28-day rule. Again, there was a creative approach in relation to the MG Rover Task Force of ensuring that people were able to access training but the 16-hour rule is a real problem because it can, if applied inflexibly, very much look like we are a society who are saying, "If you are faced with industrial change or even if you are not—you are coming out of school, have done some work and then reach the magic age of 19 and moved beyond that—the future is to get trained, to get educated, to look between different careers, particularly if you are unemployed, but if you do so, we are going to cut your benefits", I think that is a problem. As I said, we found ways around that in the MG Rover Task Force but we need a much more thoroughgoing review of the 16-hour rule.

  Q44  Mr Hoyle: The Task Force you set up, and we have seen it all working and there are two people here who can say how successful it was, accepting that it was very successful, is that model easily transferred to another region, if the same happened? It could be aerospace or whatever. Is the model that was set up in the West Midlands easily transferable to another region?

  Richard Burden: The essential model is transferable because the essential model was to say (a) you need to react quickly, (b) you need to work out who are the players that need to be on a body like that who can deliver some value to it, and (c) what are they going to do. That approach to it, of what needs to be done and how do we do it, is a model that is transferable but I think the answers to those questions may well vary slightly from situation to situation. The circumstances that led up to the collapse of MG Rover do not raise all the same questions as the situation at Ryton, or the situation at Ellesmere Port, or the situation that pertained at Dagenham a few years ago. The essential model is there. The one other thing I would add in terms of the importance of that kind of model is that we always need to bear in mind the focus of activity and the important thing is the people you are trying to help and that is, of course, the corollary of 69% back in work, that is great but we also have to remember that of those the estimate is over 50% are earning a lot less and that leads to potential problems with debt, with paying the mortgage and so on. There are a large number of people, very much a minority but nevertheless a large number of people, who are still without jobs and, if you are one of those, to be told that the majority of people have got jobs—

  Chairman: Let me bring in Tony Wright to ask his question. That leads neatly onto Tony's question.

  Q45  Mr Wright: In respect of that we pressed the union in terms of the patterns of employment. In your assessment of the continuing effects of the closure and the patterns of employment—and I would assume it would be easier for skilled workers to get employment rather than unskilled or semi-skilled employees—have they found appropriate work and what about the ones who have not got those necessary skills? Generally, is it a fact that they are more likely to be unemployed?

  Richard Burden: It is a mixed picture but by and large what you say is right. As I say, we think about 69% are back in work. From a survey that was done by the Task Force a few months ago the indications were that over 50% were saying that if they were back in work they were earning a lot less than at MG Rover. If you look at where there is a persistent problem, or the most serious persistent problem of unemployment now, you are talking about the area immediately around the Longbridge plant. The average age of a former MG Rover worker who is still unemployed is 45. If you look at those still out of work, the figures show that about 535 of those are registered at the Northfield Jobcentre. If you think about it it stands to reason that the people who lived closest to the Longbridge plant were probably going to be the older employees, sometimes were going to be the less skilled employees—it would be wrong to say unskilled, I do not think there were very many people at all at MG Rover who are unskilled but perhaps the less skilled—and very often they will be the least mobile employees as well. I think that is where there is a particular problem and it is why the final report of the Task Force was called The Work Goes On, and I think that was the right title because there are now programmes being fashioned under the title of Working For Jobs trying to provide the kind of targeted support and help that is necessary for those people but also there is a broader agenda about regenerating that part of south-west Birmingham and that part of the West Midlands not just for the former MG Rover workers who are still without jobs but for the generations coming through.

  Q46  Mr Wright: You mentioned briefly the age profile. Reading some of the profiles of the people who have lost their jobs and gone on to other employment, what I find is that there was a considerable number who had long-term employment at Longbridge itself, for example, 30 or 35 years. Do you know what the percentages were of those people and is the age profile on the basis that the 58 and 59 year olds are a large proportion?

  Richard Burden: I have not got those statistics to hand and I am sure that when Advantage West Midlands and other members of the Task Force come before you they can give you those figures. The workforce was getting older. I think the average age was in the 40s, not at the higher end of that. There certainly has been a culture in that part of Birmingham which had a particular view of what employment meant and a particular view of what work meant. It is impossible to overstate the significance of the Longbridge plant for that part of Birmingham. Everybody who lives there did not necessarily work there but they knew someone who did, or dad did, or mum did, or aunty did, or brother did or sister did. It was the way that the area defined itself in many ways and that has created a culture of aspiration that had a lot of strengths to it. They produced great cars for 100 years at that plant, that culture made a huge contribution to the war effort. It also means that if you are looking at the area of Birmingham that has got one of the worst records of business start-ups, it is that part of South West Birmingham. Shifting that aspiration is going to be important. It is one of the reasons that I am very pleased for the future Longbridge site they are looking at creating a technology park there, something I wish more progress had been made on up until now, and also there is going to be a 14-19 vocational centre established at the Longbridge site to ensure that the generations coming through certainly value their manufacturing heritage and look to the future of engineering in a much more high-tech way in the future and a broader way; that they also understand that does mean different things in the 21st Century from perhaps what it did in the 20th Century. It is not trying to devalue the past, it means the future has got to be a bit different.

  Q47  Judy Mallaber: In your evidence you mentioned the new intensive personalised employment support package. Can you tell us how you reckon that differs from the support that was previously on offer and what its advantages are?

  Richard Burden: I think the elements of it are similar to the extent that if you go through what is it going to provide support for, it would be one-to-one interviews, it does involve help with CV writing if that is appropriate. There are other elements coming in in terms of how you build up, whether things like childcare is a barrier to employment, but a lot of these things should have been gone through in the period between 2005 and now. I guess the difference really is that it needs to be a lot more personalised. The people it is dealing with, the people it is targeting, are those who have gone through a year and still have not found work and that means it needs to be a lot more flexible to understand why that is and what can be done to help. I think that is probably the main difference. The other thing is the challenge about that support programme. A lot of it, given how the funding package has been secured, does need to be targeted at former MG Rover workers. That is right because if you are looking at the immediate consequences of the collapse of the company in that part of Birmingham, it was people who worked there who lost their jobs. The answer I was giving to Tony indicates that there is also a longer term problem in that area and there are people who are out of work in that area or who have got skills problems in that area who did not work for MG Rover. The family links mean that we need to have a much broader perspective about trying to raise skill levels, aspiration levels, and provide help in that part of Birmingham, and I would say north Worcestershire as well, not simply to those who were MG Rover workers, even though they will be a key part of that.

  Q48  Judy Mallaber: That specific support package is really something for the immediate aftermath and it is still about the 1,800 who have not got jobs and you are saying the broader package you are talking about is something outwith that immediate support package?

  Richard Burden: It resembles that. It is a combination of the kinds of things that were done in the—I was going to say immediate aftermath—period between April 2005 and the ending of the Task Force in the early part of this year. Pilot projects have existed in various parts of the country, like Working Neighbourhoods Projects, where targeted money has been brought into areas with persistent long-term under-employment problems that would allow greater flexibility by the agencies involved to work out the packages of support and tailor those to what the needs of individuals facing the problems are. It would be a combination of those two approaches. The Working For Jobs idea partly came out of a visit that myself and a local councillor of the area made to one of these Working Neighbourhoods Projects in the north of Birmingham and we thought there was a lot we could learn from that in the MG Rover south-west Birmingham scenario.

  Q49  Judy Mallaber: On the specific question of training, do you think that the training courses offered immediately by MG Rover were appropriate? I have two comments. One is the NAO report has some anecdotal evidence about people being shoehorned into courses, in other words not necessarily a personalised enough package. We have heard from Amicus the suggestion that maybe because of what was positive, the speed and the immediate setting up of that response, that maybe people were asked too early what they wanted to do and did not have enough time over a period to come to terms with and reflect on where they might want to go. Do you have any comments on the way those training packages were put together?

  Richard Burden: Yes. I think I differ a bit from one of the things that Tim Parker said in that the problem is—and I think he indicated—the training is coming to an end. It is not, in fact. If you read the last Task Force report, it talks about training support continuing throughout the 2006-07 financial year. The nature of it is changing for the reasons we have been talking about. It is trying to focus that training where it is needed. I think the situation in the immediate aftermath was difficult and looking at this model for future situations is something we need to think about. The collapse of the company in many ways came out of the blue, certainly for the employees concerned it was a real bolt out of the blue, and it was shattering for anybody who worked for that company. The immediate presence of the Secretary of State there as soon as it happened was really important. The same with the Task Force going into effect straightaway was really important. Processing the claims straight away was really important and also saying "within a week we are going to be there to help you with training packages and support and so on" was really important. Part of that was to try and look at what people's individual preferences concerned, and I take Tim's point in many ways that straight after people are not going to know what they want to do, but if you are going to help them quickly you need to be trying to establish those things early. There was a pattern to the kind of thing a lot of people were saying they wanted to do. An awful lot of people said they wanted to retrain as plumbers. Quite a lot of people said they wanted to retrain as driving instructors. Quite a lot of people said they wanted to move into construction. There was a great deal of work done to either source the right kind of courses or in some cases set up new courses to achieve that which were successful. It would be wrong to say that automatically meant it was a route straight through into work, and if too many people are trained in a particular area there is a danger you will flood the market. There was also a real frustration at that time because the LSC—Learning and Skills Council—was trying to ensure that the training providers were quality and would provide the right kind of courses, of people saying, "you ask me what I want to do, I say I want to be a plumber and then you tell me there are no courses available" and later on, having been through that course, if it does not automatically lead to a job people are frustrated. I understand that, that frustration is real when you have been through something like the loss of your job at MG Rover, I would simply say the answers to these things are not simple.

  Q50  Judy Mallaber: Are people who are in that position able to come back later on and get help or have they had their chance if they have been sent off on one training course and then realise it does not suit?

  Richard Burden: It is still available. I think there is an issue of communication there about whether people know that and whether the communication networks are as robust as they need to be. That is another reason for things like the Working For Jobs approach. The specific help that may be available to individuals may differ. If somebody has been through and has already had, in a sense, a full entitlement on that, the amount of financial help for training may not be the same. However, in principle, training assistance should still be there in the same way as it should be there for any unemployed person. Let us remember the whole principle of establishing the Jobcentre Plus-type approach to tackling worklessness compared with what was there before was about saying that there should be very few gaps between unemployment support, job search advice and pathways into training and it is moving much more on to that and making it happen in an area which has had a real belt from the loss of 6,000 jobs.

  Q51  Mr Bone: Just on that, would you agree there is a lesson to be learned from what you are saying about the driving instructor/plumber syndrome that those are largely self-employed jobs? Is there a risk of somebody who just lost an employed job, having been there for a number of years, feeling, "Gosh, I really do not want to go back and be employed and risk losing my job again". Is there a lesson there? Perhaps more advice might be given that they might be better to retrain in something that would not lead to self-employment.

  Richard Burden: That is right, but you have to be sensitive about this. If somebody has lost their job, to sit down and say, "We know this has happened, we know you have got this leased car that you apparently owe a load of money on, you have got a mortgage, you perhaps have just taken out a second mortgage and you have always looked to your future being in manufacturing, now look ahead", you have got to be pretty sensitive about how you put those things. I think that was what people tried to do to get people to raise their horizons. That did include manufacturing. One of the good things the Task Force did was to set up a thing called "The manufacturing hub", where there was extra, if you like, targeted support to try to match former MG Rover workers and people in the supply chain with the opportunities that are available in manufacturing. Manufacturing has got a future. I think about 750 people benefited from that where there was some travelling allowance support, there was support for employers to take on former MG Rover workers which had a lot to offer. The other thing is that there are some success stories of people who have gone into entirely new areas of work. One former Rover worker springs immediately to mind who worked in the paint shop but what he always wanted to do was be a youth worker, he never had the opportunity to do it. He is now doing that and training up for that. In terms of quality of life and job satisfaction, he said he would not want to go back, but none of that should blind us to the fact he is not earning anything like what he earned at MG Rover and that creates problems in other areas.

  Q52  Miss Kirkbride: Obviously you and I recognise a lot of these stories. A very similar one to the one you just mentioned is someone in my patch who wants to be a teacher and learning to be a teacher is quite expensive, so I very much agree with what Richard has said today. I still find it curious about the missing people who still are not in jobs because, as you rightly say, there is a cluster around the plant—you and I know the area very well, you can see what the problems are there—but there are another thousand people out there somewhere who have not got jobs and I wonder if we have got any more information on who they are and why they have not because they have got mortgages and they have been used to a good standard of living and that is a lot of people the wider area, which is relatively buoyant, has not been able to absorb.

  Richard Burden: As you know, Julie, trying to put the statistics together was a matter which was discussed at the Task Force when the election was on. Obviously you were not able to make meetings after May last year. Those discussions did continue on the Task Force about trying to work out where those people were. We know that 80% are now not in the benefit system. The impression is there are some people who moved straight out of MG Rover and went into other jobs who did not pass go, did not do anything else, that would account for some. There are some who left the country, we know that. The numbers are less significant than they were in those early stages of the Task Force, people have got more idea about where people have gone. It does mean that we still need to keep track and it is one of the reasons that the Rover Community Action Trust that has been established, which is chaired by the person I referred to before, Gemma Cartwright, is placing a lot of store by informal methods of keeping in touch with people, whether it be through the families, whether it be through play schemes, whether it be through newsletters going out, if not to track people directly, that is difficult, but at least to be able to track people who know the people who have gone missing. If there is a problem we need to pick it up.

  Q53  Miss Kirkbride: In your earlier evidence you mentioned the 16-hour rule which was certainly one of the obstacles to a seamless transition. Are there any other areas that you would alert the Committee to where we could make some positive changes so that when this kind of thing happens we could either temporarily change the law in certain circumstances or there could be a wider change in the law which would affect everybody all the time where the benefit system makes life very difficult to get retraining and back into work?

  Richard Burden: I guess if somebody came to me and said, "Okay Richard, you can do one thing and one alone", I would have to come out and say it would be the 16-hour rule. That is the biggie because it does not simply apply to situations of industrial change, there is a real issue of youth opportunities there as well. One of the things that was in the Task Force's report was perhaps a more systematic approach to things like VAT recovery and VAT deferrals. One of the things that was very useful in the Task Force was to have HM Revenue and Customs there and they were pretty creative and pretty helpful to companies, particularly in the supply chain, with those kinds of problems. It would be better if you did not have to be designing the kinds of things that you needed to do there and then if there was already something a bit more systematic in place. The other thing is I do think we need to look at the join, as I said before, between benefit regulations and things like redundancy payments, and particularly the payment of pay in lieu of notice, if a company goes bust without any kind of notice. In that situation people have to wait for three months to receive a payment that would recognise the fact that they did not have any notice because technically MG Rover or Phoenix could have given them notice at any time during those three months. That is nonsense because the company had gone, it was bust, but technically that is the way the rules work. However, if the money had been paid, it then could have come off their benefits. We need to get, as I said, those sorts of joins sorted out. The last thing I would say is there were a number of former MG Rover workers where it was not always entirely clear who they worked for. People who had contracts with the holding company, Phoenix Venture Holdings, but who worked for MG Rover, were they covered or were they not, and who was responsible for paying their redundancy payments? That sort of thing needs sorting out. The last thing is the pension protection fund. Thank goodness for the pension protection fund is the first thing I would say. It came in the week the company collapsed. Were it not for that, there would have been very large numbers of people facing very, very severe losses of pension rights. As it is they face losses but an awful lot less than would have been the case. Again, what the MG Rover story showed up was that in a situation of multiple companies, MG Rover, Phoenix Venture Holdings and other subsidiaries, technically if there is one company that is not in administration and another company is, can you benefit from the pension protection fund over there? Phoenix Venture Holdings was not in administration, and still is not, and there was a period where it was not clear whether technically, according to the rules, the pension protection fund would be able to cut in. I have to say credit to ministers, from the word go they said, "They will be protected. Whatever it takes, we will make sure they are" and that is happening. Again, we do not want to be in that situation again with another industry, another company, and those issues do need to be sorted out.

  Q54  Mr Clapham: One of the successes, and it was something that we were a little concerned about when we did the report on MG Rover, was the supply chain. It seems that one of the success stories has been the diversification in the supply chain. Why do you think that is? Is it because of the funding and support that was given or was it because of earlier signals that had resulted in the supply chain beginning to diversify?

  Richard Burden: Both of those things. I think Peter said when Amicus was here, he was right, a large number of suppliers woke up and smelt the coffee—I think it was coffee, was it not—and did deliberately say "we do need to diversify". The first thing to say about that is thank goodness that they had the time so to do. Let us remember that Longbridge was facing closure in 2000. The five years between 2000 and 2005 were absolutely vital in allowing companies the time to do that. If you are one of those employees who lost your job in 2005, particularly if you are still unemployed, to say "you bought other people the time to keep theirs" is not going to be any great comfort but it is a fact. There are some people who are saying, "It should have gone in 2000, it was all inevitable". If that had been the case the estimates then would have been a conservative estimate of 20,000 to 25,000 jobs going in the West Midlands, other estimates have gone up 30,000, some people even say 50,000 would have gone. That top end is probably a bit of an overestimate but it would have been substantial. Now you talk about total job losses somewhere under 10,000 and the work done in those five years are part of the reason for that. Some did it voluntarily, there was concentrated work done to try to encourage that through the industry forum, the Accelerate Programme. The RDA did a lot of good work, as I say I particularly mention the SMMT Industry Forum, the joint body between Government and the industry, having done a lot of work to promote that. The other thing is the work that was done when the company collapsed. There was estimated to be 160 companies that were dependent on MG Rover for more than 20% of their work in 2000. By 2005 that was 74, so a lot of work had been done, but it was still important that the Task Force had those procedures in place to be able to help those that still needed help, that were viable. If they were not viable nothing was going to help them, but if they were potentially viable and just needed a breathing space, things like the Wage Replacement Fund that was brought in was really important to that, things like help with VAT issues was going to be important to that and there was a loan fund called the Advantage Transition Fund that could also provide support. A company that springs to mind there that I visited about six months ago is Rimstock plc in West Bromwich, a very prominent manufacturer of performance wheels, and it is in the area of the automotive industry where Britain is still a winner, motor sport technology, performance engineering and so on. They are an international company now, they are doing a lot of good stuff on exports and so on, but they still had an involvement with MG Rover and they needed help from the Wage Replacement Fund just to be able to make that bridge.

  Q55  Mr Clapham: That diversification has brought some growth as well?

  Richard Burden: I think Rimstock, if you said it was an opportunity to grow, they would say however you plan it, the loss of MG Rover was a problem, it was not an opportunity for them it was a problem, but if in the period 2000-2005 there was a company who was saying "what is the future of us as an automotive supplier, what is available to us in terms of support and then when MG Rover collapses what support is available", they could make the most of the help that was available. That, again is a lesson for the future. For the Rimstocks of this world, it is brilliant. For the other companies that were able to be communicated with or knew these things were there and could access them, that is brilliant. The thing we always have to ask ourselves is what about the company who, for whatever reason, did not know, did not think it applied to them, it applied to someone else or somehow they went to the wrong bit of the system and did not get the information and support they needed, which is why we always need to be thinking are we getting the information to the right place and, if we think we are, let us go back and check because there is still going to be a company that will miss it.

  Q56  Roger Berry: I have two or three questions about the lessons that can be learnt from the Task Force. One point you make, and you have referred to it already, is that the Task Force having, as you put it, "reached the end of its allotted lifespan", there is work to be done. To what extent do you think it was somewhat unrealistic to think the Task Force could complete the work in a year? Do you think the subsequent work should be, as it is effectively, the responsibility of another organisation? You talk about the Task Force revisiting it every six months.

  Richard Burden: That was my suggestion. I have to say that suggestion did not carry the day at the final meeting of the Task Force. There is a consensus on the Task Force and a consensus amongst the agency that there is still a lot to be done and that the issues are not going to go away and they need to continue working and things like the Working For Jobs programme does indicate that they are serious about that, so I do not doubt the sincerity or the seriousness. I think it is also fair to say that the particular structure of the Task Force with that many people, that many agencies and that many individuals meeting every month does not make things happen necessarily of itself and time moves on, circumstances change, you do not necessarily need entirely the same model. There is now an executive group of core agencies that are meant to be taking the outstanding work of the Task Force onwards. My view is that whilst that is probably right for an executive core group, you still need an accountability mechanism, you still need a broader network, to provide occasionally a reality check to make sure that they are still doing the things they need to be doing or if new things need to be done that is flagged up and maybe if there are things that emerge in the coming year that need to be brought to the attention of Government, whether it be locally or whether it be nationally, there are bodies and individuals that are in a position to find out about those things and flag it up when it is necessary. That is why I do think there needs to be a bit more thought put into the framework within which the work goes on.

  Q57  Roger Berry: In four or five paragraphs in your memo about the same place, you do list a whole range of things that need to be done, regeneration et cetera. How optimistic are you that this is happening, that this will happen?

  Richard Burden: Again, I think the intention is there. I suggest in the evidence, and have said it today, there needs to be a particular focus on the south-west Birmingham area both in terms of the physical regeneration of the Longbridge site and what is going to happen to it. We all hope that Nanjing are successful in bringing a form of car production back to the Longbridge site, we hope they are successful in doing that but it will be hugely different in scale and scope than anything that was there before. You are talking about a small company producing sports cars in the main. There are ideas for having a technology park there, using the expertise of local universities around things like composites and advanced materials production. There are broader ideas for creating a transport hub there. It is close to the motorway network but making sure that the transport links work, are big issues. Creating the skills base in the area which enables it to benefit from opportunities in the future are big tasks and there is a sub-group still existing led by the city council and others on it that is charged with the responsibility of these things. My slight concern is that we do not slip back into where I think there was a weakness between 2000 and 2005. It was not in the supply chain, it was not in the diversification of the region, some excellent work was done there, but I do not think sufficient work was done in the area around the plant because that is not the supply chain. The people in and around south-west Birmingham did not by and large work for the supply chain, they worked for MG Rover and their needs and the future for them was different from those in the supply chain.

  Q58  Roger Berry: You said that in your view the Government responded pretty quickly to this crisis of large scale redundancies and so on. What did they not get right and what lessons do you think Government should have learned from the experience if there were to be, heaven forbid, a similar event with large scale redundancies of skilled workers on this scale in another part of the country? What should the Government do differently?

  Richard Burden: I think if you are talking about a decision or an event having happened or an event which is imminent and inevitable, the essential model of what happened was the right one and it would be important issues of detail, but nonetheless issues of detail, of what the response should be. It would be things like making sure that the agencies work more seamlessly together. It would be things like making sure that the boundaries between departments are right. It would be things like being creative around the 16-hour rule. It would be extending some of the things done on the Task Force. I think the bigger issue is what happens if intervention and policy is necessary to try to minimise the chances of getting to that situation in the first place. They are much, much bigger policy questions. As I say, I would defend the period between 2000 and 2005 for all the reasons I have said. Even though MG Rover collapsed at the end of it, those five years were really, really important. I do not think that you will find a repeat of MG Rover as such because it was a fairly specific set of circumstances and a fairly specific historical context but I think it does raise issues about how Government should intervene, I do not think it is a question of if Government should intervene, it has to in a situation like that. When there are that many jobs riding on it and when it is a strategically important industry, Government has to intervene, there is no doubt about that in my mind. By and large I think what was done in 2000 by the Government was very helpful, what was done in 2005 was very helpful. There were various points along that way where Government was asking the right kinds of questions of the company and was offering support, for instance, on things like negotiations between Shanghai Automotive and Phoenix. The question is, was there more that could have been done. My view, and I expressed it back in 2000 and I stand by it today, is that whilst essentially the Government was on the right lines in 2000 perhaps it might have been prepared to go a bit further to get a bit more of a handle over the governance arrangements at the company that emerged that would have given it perhaps a little bit more leverage in the period between 2000 and 2005 and maybe would have ensured a bit more transparency but, to get itself into a position of doing that, at the very least it would mean greater communication between the company and Government. I think, if you look at the evidence, both sides have things to say about the other side on that. It might also mean in that situation in 2000 that perhaps a more direct role for Government might have been appropriate. I know this is not a particularly fashionable thing to say but I have to say in 2000 some kind of stake might have been the right thing to do at that time. I do not think it was something that was viable in the same way when you got to 2005, but this was trying to do something that was different. It was trying to say, "Can you find a way of a small to medium company surviving in an increasingly ruthless and global car industry?" It was never going to be inevitable, the chances against it happening were greater than the chances of it happening but let us remember that Shanghai Automotive did see the possibilities of a deal there. They do want to become a global player. Yes, they were able to buy the intellectual property rights back in September 2004 but they carried on negotiating right the way up to March to get hold of it and even after the company collapsed then carried on negotiating to get the assets. The possibility of an international arrangement was there and, let us remember, we were effectively dealing with the Chinese Government and it is right that our Government should be actively involved in that as well.

  Q59  Mr Hoyle: Do you believe that when the receiver came in he should not have accepted Nanjing because the question is will anything ever happen? The dates are there for the signing of that kind of arrangement but the reality is do we have a 50/50 chance of seeing jobs there or is it 60/40, I do not know? Should we really have gone with Shanghai Automotive?

  Richard Burden: The nature of insolvency law and so on is that the Government does not decide these things. Ultimately, the administrators had to make a judgment about what was in the interests of the people that they had a responsibility to look after. It has to be said that whilst Shanghai wanted the assets of the company, there is no doubt about that—and I think there was possibly a viable plan for them to take it over in conjunction with others—Nanjing were the ones that produced the colour of their money first, so there may not have been at that stage a way around that.