Sir Brian Bender: The intervention in the market is essentially in areas of market failure and therefore the intervention schemes the Department has will be when there is a judgment that there has been a market failure or, in the case of a collapse of a company like this, in order to help the local and regional economy adapt. We should not otherwise normally intervene in the market.

Q18 Mr Khan: So there are exceptional circumstances where you would interfere.

Sir Brian Bender: They would be exceptional circumstances and the sort of circumstances when the bridging loan and the £6.5 million were being considered were those exceptional circumstances.

Q19 Mr Khan: With hindsight, did you get the balance right?

Sir Brian Bender: My belief, and I look at this only with hindsight, is that the Department did get it right in these circumstances. Had a negotiation with SAIC been successful, then that would have been a benefit to the West Midlands economy and to car production in this country. SAIC has a record of doing joint ventures with companies in other countries; if I might put it this way, that was a horse worth backing but it was not successful.

Q20 Mr Khan: Ms Bell has referred to the factor which led to the bridging loan being given which was the administration; that was the key thing. There is a huge white elephant in the room which nobody is talking about, which is the general election, which was 5 May which has been referred to in press reports preceding today's hearing and after publication of the NAO report. Can you confirm that the factor which led you to make a recommendation for the bridging loan was in fact the administration, that was the key? What impact did an election four weeks away have on your decision?

Ms Bell: The election four weeks away had no bearing whatsoever on the advice which I gave to ministers. We looked first at the options on the bridging loan. When the company went into administration we then looked at a different situation in terms of options for bidders and what we felt it was appropriate to do.

Q21 Mr Khan: At no stage did you consider recommending more than one week's worth of operating costs being given as a bridging loan?

Ms Bell: That is correct.

Q22 Mr Khan: So at no stage did you consider a five-week operating cost loan.

Ms Bell: No, I did not.

Q23 Mr Khan: May I move on to something the Chairman alluded to which is something we discovered in the context of the report? After publication of MG Rover's accounts of 2002, we discovered that £13 million had been transferred to the directors' remuneration package and we subsequently discovered that four of the companies, if I have got this right and the Chairman will correct me if I have got it wrong, showed the directors receiving £40 million from the business. Have I got the figures right?

Mr Alty: Yes, £40 million is certainly a figure I recognise.

Q24 Mr Khan: Would you like to comment on that?

Mr Alty: Sir Brian has already commented. These were figures which were in the accounts, they were published and there was a corporate governance regime which required that they should be published, but of themselves they would not necessarily provoke government action.

Sir Brian Bender: May I add one comment? The very fact that they had this money led to one of the conditions which was put in for the possible bridging loan, which was that the directors themselves should contribute towards the cost of the £110 million loan. It was in that knowledge, that it was felt they should make a personal contribution if that had been pursued.

Q25 Mr Khan: But not to the £6.5 million.

Sir Brian Bender: No, this is the bridging loan which the Chairman was asking about earlier. This is the £110 million.

Q26 Mr Khan: Except for the inspection which has been ordered into the company, there is no other recourse to get some of these funds back?

Sir Brian Bender: I believe that to be the case and we shall have to see what the inspection comes out with.

Q27 Mr Khan: When do you think they will respond?

Sir Brian Bender: I cannot answer that. When the inspection was set up, the Secretary of State asked for it to be done as rapidly as possible. I would hope it will be in the course of this calendar year, but that is in the hands of the inspectors.

Q28 Mr Khan: So far we know £3.1 million has been spent on the investigation. Is there a cap or limit on what they can spend?

Sir Brian Bender: There is no cap. The expenditure would normally be front-end loaded, because there is a more intensive work programme of amassing documentation, but there is no cap on it.

Q29 Mr Khan: Moving on to the question that the Chairman asked of Mr Edwards about the recovery package and the support package, you referred to a figure of 75% as the sort of figure we could hope to see for those 6,000 people made redundant being able to get a job within 12 months. Where is that figure obtained from?

Mr Edwards: I would need to ask colleagues, but I understand it is normal in a significant redundancy situation.

Q30 Mr Khan: When was the last time we had 6,000 people made redundant from one employer??

Mr Edwards: That was the point I was making in response to the Chairman. In normal circumstances, after 12 months you would expect to see around 75% of the workforce ---

Q31 Mr Khan: When was the last time an employer had 6,000 made redundant?

Mr Edwards: I cannot answer that question; I do not know.

Sir Brian Bender: We can provide a note on that. We have someone from Jobcentre in the back row, if that would be helpful to you.

Q32 Mr Khan: I just find it staggering that there are five of you here, we have a redundancy of 6,000 and nobody can give me an example.

Mr Alty: There is an example in the back of the report which is the Corus redundancies which are very large, but they are spread over a longer time period and they are at a variety of sites.

Q33 Mr Khan: But they were not overnight, were they? They were not 6,000 from one site. That is Sir Brian's point about the reason why.

Mr Alty: No; absolutely.

Sir Brian Bender: That is correct.

Mr Alty: It is very unlikely that there has, certainly not in recent times, been ---

Q34 Mr Khan: Can I help you? What about some of the mining redundancies back in the 1980s? Were they of similar size?

Mr Alty: They were, but they are not a company going bust overnight. That is what is so unusual about this case: a company of this size going into administration.

Mr Edwards: What the task force had to do essentially was to step in and provide a support package to employees when the company that had employed them was no longer there.

Q35 Mr Khan: That is the question I am trying to lead on to. How do you then measure the success of your support package, if you have nothing to compare it against?

Mr Edwards: The figure I quoted was what you would normally expect to see in a redundancy situation. There are no examples in the very near past of such a significant scale of redundancies on a single site which I can give you. All we have available to us is what you would normally expect to see and the point I was making in response to the Chairman's question was that we shall hit the norm in an abnormal situation where the number of people being made redundant was in a single location. It is about scale, it is about immediacy and it is about concentration; a lot of people very quickly in a very, very tight location. Eighty-five per cent of the people employed at Longbridge came from within a 10- to 15-mile radius of the plant so we were facing a very, very concentrated set of redundancies. There is no very recent situation that I can point you to that is similar.

Q36 Mr Khan: You also cannot tell me where the 75% comes from.

Mr Edwards: It is the figure that Jobcentre Plus would expect to see.

Q37 Mr Khan: Where do they get it from?

Mr Edwards: I would need to ask them.

Q38 Mr Khan: Could somebody give me a written note on that?

Sir Brian Bender: We can give you a note.

Q39 Mr Khan: May I ask Ms Bell what would have happened had the £6.5 million loan, which extended life by a week, not been given? What would have happened?

Ms Bell: The workers would have received mass redundancy notices on the Monday morning.

Q40 Mr Khan: A week earlier?

Ms Bell: A week earlier; Monday 11 April.

Q41 Mr Khan: Just to be clear, a similar question to one I asked previously. With hindsight, if you were to make the judgment again, would you give the same advice?

Ms Bell: I would give the same advice.

Q42 Mr Khan: As far as the help given to ex-employees is concerned, Sir Brian talked about the supply companies and the fact that there was a need in the preceding months and years to diversify the work that they do. How successful has that been?