The directors must answer

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Most of the questions posed by the end of MG Rover, finally confirmed on Friday, are for the future. The Government seems to have struck roughly the right balance in its £150m for redundancy payments, advice and retraining the 5,000 workers laid off at Longbridge. The concentration of so many redundancies justifies the generosity that is not extended to all victims of industrial change.

Most of the questions posed by the end of MG Rover, finally confirmed on Friday, are for the future. The Government seems to have struck roughly the right balance in its £150m for redundancy payments, advice and retraining the 5,000 workers laid off at Longbridge. The concentration of so many redundancies justifies the generosity that is not extended to all victims of industrial change.

Most of the questions about the past can be left to historians. As we said last week, it was probably a mistake for the Government to have steered Rover into the arms of the Phoenix consortium five years ago. But, partly because of its role then, the one remaining question that still matters is whether the four Phoenix directors have made unjustified personal profits from the extended collapse of the car maker.

The sophistication of the financial re-engineering of the Rover business has prompted much speculation about asset stripping and personal enrichment "at the expense of" the workers.

None of this would seem to alter the basic fact that a loss-making concern was kept afloat, and workers kept in jobs, for longer than seemed possible five years ago. That gave the Rover supply chains and the wider Birmingham economy more time to adjust to the inevitable.

But because of the Government's promotion of the Phoenix deal five years ago, it is all the more important that the independent investigation by the Financial Reporting Council establish that the directors did not take money out of the business to which they were not entitled.

When reasonable people are satisfied that they are not the unacceptable face of capitalism, we can move on to focus exclusively on how best to promote the future prosperity and security of the people of south Birmingham.

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