TWO former Trade and Industry Secretaries and the former directors of MG Rover known as the Phoenix Four will be called before Parliament in an inquiry into the Government’s role in the carmaker’s downfall.

An inquiry by the Trade and Industry Select Committee, where hearings are open to the public, was called yesterday amid increasing frustration about the length of time being taken by an expensive corporate inquiry commissioned by the Department of Trade and Industry (DTI). The inquiry, led by Guy Newey, QC, is costing £5,000 a day and could run for at least two years.

The select committee had originally hoped to wait for the DTI’s inquiry but now believes that it will take too long and that an investigation into ministers’ roles in the Rover collapse last year and its near-collapse in 2000 must be conducted for the public interest and to learn lessons from the two events.

Peter Luff, the committee chairman, said that the committee had asked Alan Johnson, the present Trade Secretary, how long the inquiry would take but that his answer was “obscure and unhelpful”.

Mr Luff said: “I think he didn’t know, and in the circumstances we decided we couldn’t wait any longer. Memories fade. This was the biggest intervention in industry by government in recent years and we want to do a political inquiry into it.”

Stephen Byers, the Trade and Industry Secretary in 2000, and Patricia Hewitt, Mr Johnson’s predecessor, are expected to be called before MPs. It is also expected that some or all of the controversial Phoenix Four directors — John Towers, Nick Stephenson, Peter Beale and John Edwards — will be forced to make their first public appearances since the carmaker’s collapse last April.

Mr Byers recruited the Phoenix Four, who were then local businessmen, to take over the company when BMW decided to sell or close Rover. Ms Hewitt offered the company a £100 million loan to help to seal a joint venture between the British carmaker and Shanghai Automotive Industry Corporation.

Richard Burden, MP for Birmingham Northfield, which includes MG Rover’s Longbridge plant, welcomed the inquiry. He said: “It is of great significance to industrial strategy how the Government should respond to events such as MG Rover and how we cope with industrial change. For my constituents this is not just a theoretical issue, it is happening to them.”

The select committee will hear evidence in the spring and hopes to report by early summer.

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