Payments due to former MG Rover workers should not be delayed by contractual wrangles between Lloyds/HBOS and the Phoenix Four.
The Phoenix Directors still have it in their power to end the delay and to get money into the Trust Fund for their former employees. They have already had to wait five years – and that’s five years too long.
I met with Lloyds/HBOS over three months ago and told them that I thought they should use money coming to them from deals with the Phoenix Directors to help get money into the Trust Fund for employees and to establish a community development fund for people living in the area rather than launching claims for the benefit of the bank. I also said that I thought such action by the bank would set a good example to the Phoenix Four to encourage them to fulfil their own obligations to their former employees. I would still urge them to do that.
However, none of this lets the Phoenix Directors off the hook.
If the Phoenix Directors did a cross guarantee deal with HBOS, giving the bank a claim on PVH assets in the event of MG Rover failing, then the Directors must have already known that when they promised to put those same assets into a Trust Fund for former employees. So those former employees should not be the ones to suffer for deals over which they had no control.
The Phoenix Directors awarded themselves millions of pounds over the years from their involvement with MG Rover and related companies. That money does not appear to have been held up by any possible claims from HBOS. So there is no reason to hold up why money due to former employees who have already lost so much.
If the Phoenix Directors each put £5m into the Trust Fund from the money they gave themselves, the Fund would have £20m straight off. It could then get on with paying out to former employees whilst the Phoenix Four and the bank are arguing about the terms of the deals they did between them.
Former MG Rover workers tell me this is not about the money. It’s about the principle of the Phoenix Directors honouring the commitment that they made to them when the company collapsed. Paying up will allow former MG Rover workers and their families to draw a line under this and move on.
The message is simple. This has gone on long enough. End the delay.
