Byers under pressure to part-finance British bid

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The Independent Online

Union leaders called on the Government yesterday to commit hard cash to rescue Rover, as BMW opened its books to potential buyers, the Phoenix consortium, for the first time.

Stephen Byers, the Secretary of State for Trade and Industry, came under intense pressure to help save 9,000 jobs at the ailing car company by backing the bid, by former Rover executive John Towers, with grant aid.

John Monks, the general secretary of the Trades Union Congress, and Bill Morris, general secretary of the Transport and General Workers Union, both called on Mr Byers to use every means possible to support Phoenix.

However, the Department of Trade and Industry (DTI) stressed that while requests for funding would be considered, any cash would have to meet strict European Commission terms for state aid.

BMW announced yesterday that it will open talks with Phoenix tomorrow following the collapse of negotiations with the venture capitalist firm Alchemy. The German car giant also gave Phoenix the first financial details of the state of Rover, in the form of copies of a detailed sale and purchase agreement for the company.

Mr Monks led the calls for Government assistance to prevent the closure of Rover, arguing that ministers needed to be "unideological" about backing the Phoenix bid. "We want to see it succeed and give Rover a fighting chance," he said.

"The Government were prepared to give money to BMW for the development of Longbridge and I think they should be prepared to give some money to the Phoenix bid as well," he told GMTV's The Sunday Programme.

Mr Monks said that if other Rover factories in Cowley and Swindon were also closed the effect would be "catastrophic" for the whole of the UK.

"I don't know what the estimate would be, but it would be well over the 100,000 or 120,000 jobs that people are talking about in respect of Longbridge," he said.

Mr Morris said he welcomed the DTI's active involvement in recent days in facilitating meetings between Phoenix and BMW, and he particularly welcomed the establishment of the Task Force to help regenerate the West Midlands.

The union saw the department's role as "active enablers and facilitators", but stressed that the £152m of government grant originally earmarked for BMW's expansion plans at Longbridge should still be given as aid for Rover.

A spokeswoman for the DTI confirmed that the Government would "look at" any request for aid from Phoenix, but no such request had yet been made. "We welcome the fact that negotiations are to take place between BMW and Phoenix, but these are commercial negotiations, it's not the role of the Government to run them," she said.

Government sources also indicated that there will be no large-scale injection of state aid along the lines of the £500m hoped for by some in the West Midlands.

Angela Browning, the shadow Trade and Industry Secretary, said that Mr Byers must identify the legal basis under which money was being offered. "On what basis can other failing industries expect government intervention?" she asked. "Can the textile industry, Ford at Dagenham, shipbuilding and other industries expect an evenhanded approach or is this just another example of Mr Byers' crisis management?"

Abbey National vigorously denied claims that it was preparing to offer £500m to back the Phoenix consortium's plans to buy Rover's Longbridge plant.

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