MG Rover

The announcement that MG Rover has gone into receivership is a blow to the automotive sector in Wales. The sector is of considerable importance to the Welsh economy, employing around 24,000 people. Five years ago, we received similar news from Rover, and we were extremely concerned about the potential impact on the Welsh economy and on the job prospects for those employed in the sector at that time.

Following that earlier announcement, we set up the Welsh automotive taskforce, which brought together all of those with a key role to play in the sector. The taskforce determined the short-term support needed by those companies affected, and plotted a way forward through which those companies could seek to improve their business prospects and, crucially, could diversify their customer bases. The work of the taskforce led to the creation of the Accelerate Wales programme, which has been extremely successful in achieving these objectives for participant companies.

Therefore, at the macro level, the good news is that, today, the number of companies in Wales with a high proportion of their business linked to MG Rover is much more limited than was the case five years ago. Trades union industrial leaders said publicly last week that it was due to the proactive work initiated by the Welsh Assembly Government and the Welsh Development Agency that we are now in a better position to deal with the situation than we would have been had this happened five years ago. That is of some comfort from the perspective of the impact on the Welsh economy. However, it is of little comfort to those businesses affected by recent developments and much less to those workers, and their families, who may stand to lose their jobs as a result.

At this stage, initial estimates put the number of jobs potentially affected in Wales at about 600 in the manufacturing sector. However, a significant number of people are engaged in the retail and service side of the MG Rover network, and so the total may be higher. The Welsh automotive forum has undertaken a survey of those companies affected, and the Welsh automotive taskforce has been recalled and meets today at 2 p.m. at the Waterton business park to discuss the survey findings and to consider the next steps.

I am pleased that MG Rover suppliers based in Wales are eligible to access the £40 million support package announced by the UK Government, through which aid is available to enable companies to understand the effect of the loss of sales on their businesses, and to help to create a revised strategy and business plan. The fund will also provide short-term financial assistance towards retaining employees with the objective of providing some breathing space for companies to consider all the options available to them. Suppliers with more than 15 per cent of their turnover with MG Rover are eligible to participate in the scheme.

The Welsh automotive taskforce will ensure that eligible companies in Wales access and maximise the support available through this national scheme. In addition, the taskforce will take steps to identify other companies that are affected but are not eligible for this support and, working through the forum, the WDA and ELWa, will take steps to put in place the support needed by those companies.

There is much work to be done to ensure that the impact of these latest announcements in Wales is mitigated and that the companies and individuals affected have the support necessary to help them through this latest transition.