Friday, April 08, 2005

Government Loan to Help Rover (3)

I had been expecting to eat humble pie this morning as I assumed the Government did not offer a £100m bridging loan to Rover. However, listening to the Trade and Industry Secretary, Patricia Hewitt this morning on the Today programme confirmed my worst fears. £100m of taxpayers money had been on the table for Rover if they needed, the deal only collapsed when the Chinese realised Rover was unlikely to be solvent over the next two years.

Not content to offer £100m of your money to Rover, she announced another £40m of your money to help Rover component suppliers diversify their customer base. Why? These component suppliers should already be motivated to find other customers or they will eventually suffer the same fate as Rover. Spending £40m on them is frankly a waste of public money. Besides, how did they arrive at such a figure? Would £20m or £30m have been enough to keep the press hounds at bay?

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