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Rover collapse ‘could cost economy over £600m’

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25/07/2006

The demise of carmaker Rover could cost the UK economy more than £600m, according to the Public Accounts Committee (PAC).

The figure includes a Government loan that will now have to be written off, a £500m ‘black hole’ in Rover’s company pension scheme and unemployment benefit to the 2,000 workers who are still out of work.

“You have to add in the closure of many related businesses – like parts suppliers and even cafes to feed the workers,” said industry expert David Boulden.

“The cumulative effect on the local and national economies has been extremely serious, with some estimates pointing at more than £600m.”

But there was praise for the way local agencies in the West Midlands have reacted. “The damage would have been even greater without the diversification of jobs encouraged by commercial bodies before the collapse,” said Edward Leigh, the PAC chairman.

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