TUESDAY 23 MAY 2006

RICHARD BURDEN MP

  Q60  Mr Hoyle: Can I take you up on that because you said they showed the colour of their money first. I thought it was that they said they would put the money on the table but the truth of the matter is in the end the money was not quite as quick as people expected.

  Richard Burden: That is true, but it was pretty clear what they were offering and they were able to provide reassurance for the administrators that was real. That is why in answering Roger's question before, I was saying the important thing is how you get to that situation rather than what happens at the end of the day and what support you can give to what is still a strategically important industry. On that, perhaps I can add, as well as the lessons of the specifics on MG Rover, which as I say were unique, there are real issues about how we get productivity in the industry up, how we get investment in the industry up and how we play to our strengths in the area of performance engineering, telematics and environmental technology and so on. There is good stuff being done by the Government Manufacturing Advisory Service, the Low Carbon Vehicle Partnership and the Automotive Academy, all of these things are great, but we do need to revisit them and say, "Are they enough and can we develop them in a way that enables us to be as strong as possible in an industry which is global, which is very competitive and which is pretty ruthless?"

  Q61  Mr Hoyle: Let me take you on to the point you mentioned, the administrator. What was your judgment of the administrator? Do you think they were good, bad or indifferent? My view was I thought they were damned awful. We had a car showroom, Phoenix, where there was an offer put in of £800,000 that would have kept all the jobs in place, kept the workshops open, they would have carried on selling cars and, yes, there would have been another dealership on there but at least it was a complete takeover. In the end the administrators sacked everybody and moved the cars off overnight, did not tell anybody, 18 months later it was an empty site. I think they finally sold it with no jobs on the site. In my view, I thought they were a total disgrace, I do not know what you thought.

  Richard Burden: They are administrators. In terms of their communications I thought that they were better than many. Over the period after it went into administration their liaison with the trade unions, the kind of thing that Amicus was saying, there was a dialogue there. There is little doubt they were very expensive.

  Q62  Mr Hoyle: Absolutely.

  Richard Burden: I leave that comment hanging in the air, if you like, and it may well be that in some cases that they were overly inflexible. I did not know about your case but that might be an example of that. The contacts I had with PricewaterhouseCooper's indicated to me, and it is also fair to say that a number of potential bidders did express some frustration with what they regarded to be an inflexibility on the part of the administrators. I think the problem is much more to do with the kind of duties we give administrators and what their job is as administrators. They are accountable and have got responsibility in one direction that overrides their responsibilities in other directions. That is a broader issue of policy that maybe we do need to address. I do not think that would ultimately have been solved by having more open-minded administrators, I think it is a more fundamental problem than that.

  Q63  Mr Hoyle: What is the real cost and when will we finally know what the total cost is that PricewaterhouseCooper have charged for this administration? Everybody talks about "Best value for money", well I think they are a very costly company and, like you say, it seems to be an open cheque book for them.

  Richard Burden: You have drawn to my attention a particular problem that was experienced with the dealership in your area and I am sure there are others like that.

  Q64  Mr Hoyle: Absolutely.

  Richard Burden: In fairness, I do not want to be here as an advocate for PricewaterhouseCoopers, heaven forbid.

  Q65  Mr Hoyle: Do you think they are good value for money?

  Richard Burden: I am not suggesting they are good value for money but I do think effectively running an operation like the collapsed Longbridge plant and all that goes with it is pretty complicated and it was not entirely bad news about the way they behaved. They did some things right, they did other things wrong. Administrators, not just PWC but administrators generally, cost a great deal of money and there may be issues of policy there about how fees are charged, calculated, levied and where they come from, but that is probably a bit beyond the remit of this inquiry.

  Chairman: There are many things I would like to talk to you about but I think we are at the witching hour on this. Richard, we are very grateful to you and you have raised some very interesting thoughts and more conceptual thoughts in our minds which will consume the rest of this inquiry. Thank you very much.