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Tuesday, 9 May, 2000, 11:59 GMT 12:59 UK
Byers wins a breathing space
Rover workers are not the only ones to celebrate the deal
By BBC News Online's political correspondent Nick Assinder.

Huge sighs of relief echoed around government circles when the announcement came that Rover had been saved.

And beleaguered Trade Secretary Stephen Byers had more reason that the rest to feel a weight had been lifted from his shoulders.

The government's handling of the Rover crisis - or mishandling as the Tories would have it - has severely damaged its reputation, particularly in the West Midlands.

Stephen Byers: Still a question mark over future
That local resentment was made plain in the recent local government elections when Labour lost Solihull council in what was seen as a direct punishment for its handling of the sell-off.

And the more general feeling that ministers had shown themselves out of touch and unable or unwilling to do much to avert the worst has added to Tony Blair's woes at one of the most difficult periods of his premiership.

Mr Byers future has been called into doubt over his part in the affair and many believe he has been fatally wounded by it.

He has faced a huge amount of flak for appearing not to know what BMW was up to in the first place - a charge of which he was cleared by a Commons committee - and was then heavily criticised for effectively claiming there was little the government could do.

Huge relief

He later threw his weight behind the Phoenix bid and helped arrange talks between the group and BMW which came to a head in London last Monday night.

So the announcement that Phoenix has secured the company will have delighted him and hugely relieved the government.

Mr Byers was eager to underline his part in the deal, declaring: "Three weeks ago when I got the Towers Consortium together with BMW and facilitated their first meeting, I was criticised in many quarters for getting involved in that way.

"I think we were right then and I think today we are seeing the results of that."

And he certainly acted as a middle man by passing information between the parties and ensuring the deal was kept on track.

But that has not stopped Mr Byers' critics who claim that his intervention came too late.

Shadow spokesman Angela Browning claimed he had "taken his eye off the ball and when the crunch came claimed he didn't know what was going on."

Breathing space

And, of course, it ties him closely to the future of Rover, which many claim is still in serious long-term doubt unless it gets into bed with a big name partner.

The immediate calls for his head from the Tories will now die away and he has certainly won himself a breathing space - but it is only that.

He must be extremely careful not to over play his hand and suggest that this is somehow a government bid that would not have come off without his intervention.

For a start no one would believe him and, secondly, it would ensure the government got the full blame if the company ultimately fails.

Government sources have already been eager to point out that ministers simply acted as facilitators in the deal and were not involved in offering any subsidies or other encouragements.

The last thing Tony Blair wants is to be cast as a leader from the old 1970s interventionist school.

But, at the same time, he needs to dispel the impression that he is more of a free marketeer than previous Tory governments.

However, the result is still some very welcome news for Tony Blair at a difficult time, and removes one of the clouds that has been hanging over his government's record.

See also:

09 May 00 | Business
09 May 00 | Business
09 May 00 | Talking Point
09 May 00 | UK Politics
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