Blair and Brown: Hoping to minimise economic damage

Senior Labour figures including Tony Blair and Gordon Brown have been seeking to minimise the fallout from the collapse of MG Rover.

The prime minister and chancellor visited Birmingham on Friday, holding out hope that a deal could still be done to save some of the 6,000 jobs that are under threat at the company's Longbridge plant.

Blair returned from the Pope's funeral in Rome to meet senior union leaders and workers from the factory, insisting the government would do its "level best" to retain car manufacturing at the plant.

Failure to conclude a deal with the Shanghai Automotive Industry Corporation (SAIC) prompted the company to confirm on Friday that it was set to appoint administrators.

Deal hopes

Speaking after the talks, Blair said a deal was "possible still" although it would not be in the same form as previously planned.

"This is a very, very difficult time, a time of great anxiety for the people who work at Longbridge, and for their families," he said.

"We will continue to do absolutely everything we can to keep car production and as many jobs as possible."

He added: "This is a good plant, they are a fantastic workforce. There is no doubt at all in our minds that any company would be glad to have a workforce like that.

"The question is, can we make sure we continue with some sort of going concern here and we will do our level best to achieve that.

"We have both been in contact with the Chinese government and we will follow up these contacts with the finance minister and the prime minister because it's possible still that there may be the opportunity of doing something with the Chinese company, although not the original prospect that was there a few weeks ago."

Working people

The chancellor also praised the workforce at Rover, and pledged to "fight as hard as we can" for the company.

He added that ministers were "on the side of the working people at Rover".

It also emerged that the prime minister has written to his Chinese counterpart, Wen Jiabao, urging continued talks on a possible tie-up between the British and Chinese companies.

"I would... ask you to convey to SAIC the British government's continued goodwill towards the company and our willingness to provide whatever assistance we can as SAIC considers what to do next, now that MG Rover is in administration," Blair wrote.

Also seeking to tackle the problem was trade secretary Patricia Hewitt.

She announced that a £40m aid package would be available to mitigate the impact of the car company's collapse.

Early action

For the Conservatives, shadow industry secretary Stephen O'Brien said it was "a deeply depressing day for so many people in the West Midlands and indeed for the country as a whole".

"It is a tragedy for the 6,100 workers in the Longbridge factory and the thousands of others who work for MG Rover's suppliers," he told the BBC.

"We know very little about the details of the negotiations between SAIC, the DTI and MG Rover and so it is impossible for us to say anything on the loan negotiations.

"At this time our priority should be the men and women who have lost their livelihoods."

Malcolm Bruce, Liberal Democrat trade and industry spokesman, said ministers should have acted sooner to help MG Rover find a new partner.

"By the time the government offered the bridging loan it was already too late for Rover, its workers and its suppliers," he said.

"When the company was rescued five years ago the government should have worked with Rover to find itself a partner company then, before it used up all of its dowry from BMW.

"If the government had really been serious about saving Rover it would have got involved five years ago rather than trying to play the knight in shining armour when it was already too late."