Stephen Byers: the man who killed Rover

By Alex Singleton | 11 April 2005

Eamonn Butler on the Adam Smith Institute Blog writes:

Five years ago, businessman Jon Moulton came up with a plan to save at least some of Britain's ailing car-maker. About 6,000 Rover workers would lose their jobs - though with generous severance payments of up to £50,000. But the 2,000 jobs on MG sports cars would be saved. Beaten by Germany's high quality and Japan's low costs, Britain would at last bow out of volume carmaking and concentrate on the niche production it did so well.

A rational strategy. But the unions hated the job cuts. So politics intervened, with Industry Secretary Stephen Byers supporting another plan to give the group to four executives in a new consortium called Phoenix, who promised to save it.

Daft, of course. Rover still couldn't compete. Sales slid, cash dried up. And by the time Chancellor Gordon Brown had finished pillaging the pensions industry, the MG Rover group had a £67m black hole its company pension scheme too.

The Pheonix four managed to pocket £30m. But once again, Rover workers face losing their jobs - only without the generous severance pay, and with very shaky pension rights. MG might just survive, though greatly weakened. For Rover workers and taxpayers, Byers's plan has turned out to be a stinker.

And this from the politician who also killed Railtrack, the privatized rail infrastructure company. Let's hope no more bodies are hidden under the patio of this corporate serial killer.