Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 160-166)

DEPARTMENT OF TRADE AND INDUSTRY AND ADVANTAGE WEST MIDLANDS

20 MARCH 2006

  Q160  Mr Mitchell: Yes, but if you are sending the company naked into the Chinese conference chamber, any self-respecting government is going to say that if its own government cannot help it, why should they bother.

  Mr Alty: I can assure you that there were discussions with the company about whether any of these options were open. All I am saying is that the amounts of money involved would not have gone anywhere near to meeting the sort of cash sums we are talking about.

  Q161  Mr Mitchell: On pages 4 and 5 the Report says that you could have drawn up comprehensive contingency plans earlier. Why did you not draw up plans earlier?

  Sir Brian Bender: This was a Report agreed with the NAO, but this particular point was the view of the NAO. My own view, having looked at this very carefully, is that the Department, in what was a developing and moving situation, did draw up contingency plans which it refined as time passed. Looking at the papers afresh, I do not feel that there are particular things we should have done particularly differently. The NAO had their view that there were things we could have done earlier: I am not convinced of that, having studied the papers and talked to people.

  Q162  Mr Mitchell: Why is there a difference of view between Customs and Excise and the DTI in the sense that they thought it was worth not calling in the VAT debt as a kind of statement of faith in the company and you did not think it worthwhile helping them any more?

  Ms Diggle: What the Customs and Excise did and what HMRC do now is to look on a very pragmatic basis at how they can best get the maximum revenue.

  Q163  Mr Mitchell: They have to look for a return, do they not?

  Ms Diggle: Yes, they do.

  Q164  Mr Mitchell: They have to be hopeful that they can get their money back.

  Ms Diggle: They look for the maximum revenue that they can hope to get, they look at the possible different scenarios and they do have to look at the possibility that, if they absolutely insist on all the revenue immediately, the company may go bust on the spot and things may get worse. They sometimes find that it pays to wait.

  Q165  Mr Khan: Just so I can have some clarity, you accept the first part of Mr Clark's supplementary question, which was that you have acted in an exemplary manner throughout. You do not accept the second part of his question, which was that the one chink is the £6.5 million loan. Is that correct?

  Sir Brian Bender: That is correct and both accounting officers are saying that.

  Ms Bell: Absolutely.

  Greg Clark: May I clarify that that is with the benefit of hindsight? I am certainly not suggesting that was not a judgment genuinely entered into at the time; it was merely an outturn point.

  Mr Khan: Just for clarity, I think that Mr Clark was asserting that the one chink was the £6.5 million and the point I was trying to make was that the DTI do not accept that, nor do some colleagues round the table.

  Q166  Chairman: I am also intrigued by this £6.5 million but I am going to rule myself out of order from asking further questions. If you feel able to provide a note, this question of whether it provided value for money is still interesting. I know they could have bought the company more cheaply under administration, but whether one week would have made a difference . . .? If you feel able to provide a note, we should be grateful, but I suspect that we have really gone into this as deeply as we can this afternoon. [6]

  Sir Brian Bender: May I suggest that we shall look at the transcript when it is available and see whether there is anything we can sensibly add which was not read into the record today.

  Chairman: Thank you; it has been an excellent hearing. We have gone into great detail. Thank you Sir Brian for coming—of course it is your duty to come—but thank you Ms Bell for coming; your evidence has been very useful indeed and I congratulate you on the way in which you have explained matters to us so fully. I am very grateful.






6   Ev 23-24 Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 25 July 2006