By email

Dear Mr Wynn

Thank you for your email dated 6 July 2009.

You have asked to “see the recently completed MG Rover Enquiry”.

Summary

I have considered your request carefully and concluded that the report is exempt from disclosure under the Freedom of Information Act (“FOIA”) at this time.

Most of the information in the report is information that was obtained under compulsory powers in the Companies Act and is subsequently exempt from disclosure under the exemption in section 44 FOIA. Once that information has been withheld, there is not much of the report remaining. To the extent that the report is not covered by that exemption, we consider that releasing part of the report would be misleading and that the exemption in section 36(2)(c) (effective conduct to public affairs) is therefore engaged. Additionally, in view of the consideration of the report by the Serious Fraud Office, we consider that the exemptions in section 31(1) (a) and (b) (both relating to criminal investigations and/or prosecution) are engaged. Our consideration of these exemptions and, in relation to sections 36 and 31, the public interest test are set out in more detail below.

The Inspectors' report was delivered to the Secretary of State on 11 June 2009 and the matter was referred to the SFO in July. In order to avoid prejudice to any potential criminal investigation or prosecution it was decided, on legal advice, that the report should not be published at that time. I would, however, emphasise that the Secretary of State is very aware of the public interest in knowing what the conclusions of the Inspectors are and has indicated that, but for the referral to the SFO for them to consider whether there were grounds for a criminal investigation, the report would have been published.

Information subject to a statutory bar

Section 44 provides an exemption where disclosure is prohibited by or under any enactment. The Inspectors were appointed under section 432(2) of the Companies Act 1985 and are consequently able to use compulsory powers under that Act to require witnesses to provide them with information. Although not everything obtained by the Inspectors was by use of these compulsory powers, the vast majority of it was.

When compulsory powers are used there is usually a restriction on the onward disclosure of information so that it can only be disclosed in limited circumstances. In relation to information obtained by the inspectors, that information can only be disclosed as set out in section 437 and 451A CA85. These disclosure gateways are to specific individuals or bodies or for specific purposes. They do not provide for disclosure to the public at large, except where a publication decision is being taken under section 437 CA85. As I have explained above, the publication under section 437 CA85 is not possible pending the outcome of the SFO considerations.

It is therefore our view that the release of the information that was obtained under compulsory powers, other than when it is published under section 437, is prohibited and that section 44 FOIA is engaged. This is an absolute exemption. Most of the report refers to, relies on and would disclose information obtained under compulsory powers and that information is exempt from disclosure.

Prejudice to the effective conduct of public affairs

Section 36(2)(c) FOIA provides an exemption where disclosure would or would be likely to prejudice the effective conduct of public affairs. We consider that it is important that, when a decision has been taken to appoint Inspectors so that they can investigate a company, the findings of those Inspectors can be considered in full. It is important that the public get a full understanding of what went wrong and that any concerns the Inspectors have raised are considered fairly and in their full context. This fairness of process and protection of the integrity of the Inspectors conclusions is part of ensuring the effective conduct of public affairs. It would not be right for the Department to release only those parts of the report which are not covered by the statutory bar as to do so would be likely to give a misleading and unbalanced impression of the final conclusions of the Inspectors. This would be prejudicial not only to those who are the subject of those conclusions but also to the report itself as its conclusions would be undermined. This is particularly so given the high profile of this inspection and the likelihood that there would be a significant amount of speculation in the media about how the small parts of the report that were released should be interpreted.

Prejudice to criminal investigation or prosecution

We also consider that the report is exempt under section 31(1)(a) and (b) FOIA. These provide exemptions where disclosure of the information would or would be likely to prejudice (a) the prevention or detection of crime and (b) the apprehension or prosecution of offenders. The report has been referred to the SFO so that they may consider whether or not there are grounds for a criminal investigation. It is our view that releasing the report now would be likely to prejudice their ability to assess whether there should be a criminal investigation. It would also be likely to prejudice any criminal investigation or prosecution that the SFO may decide to pursue. Releasing the report would be likely to lead to public debate about the merits of particular aspects of any potential investigation or about the conduct or likely defences of specific individuals. This may make the investigative process more difficult and could also impact on the ability for there to be a fair trial.

Public Interest Test

In favour of disclosure we appreciate that many people are interested in what happened at MG Rover in the period up to its administration.  The companies' collapse in April 2005 was high profile, and many of its employees, suppliers and other stakeholders understandably want to know why this occurred.  The Secretary of State recognised this public interest when he appointed the Inspectors in May 2005, asking for a report that was capable of publication. As has been explained above, the Secretary of State has confirmed that, but for the referral to the SFO for them to consider whether there were grounds for a criminal investigation, he would have published the report.

Now that the report has been received by the Secretary of State, it is important that all options are considered. The report is currently with the SFO to consider if there should be a criminal investigation and any release, or partial release, of the report is likely to prejudice any criminal investigation that may take place or any eventual criminal trial. The premature release of the report would lead to discussion and debate about activities of individuals referred to in the report and would be unfair to the those individuals. This public debate may make the investigative process more difficult and could also impact on the ability for there to be a fair trial. We therefore consider that the public interest in withholding the information outweighs the public interest in release of the information.

Whilst it is acknowledged that there is a high public interest in seeing the report, that is a public interest in seeing the report in its entirety, there is a lower public interest in seeing just those parts of the report that were not obtained under compulsory powers. Releasing only part of the report does not meet the aims of informing the public's understanding of what happened and there are factors which weigh in favour of withholding that information.

Releasing just those parts that are not subject to a statutory bar would leave the reader with a misleading picture of the report and the inspectors' conclusions. It is important that the conclusions are seen in their full context to ensure that the public have a proper understanding of the report.

This has been a high profile inspection and it is also important to maintaining the integrity of the inspection process that the public are not given a misleading impression of the thoroughness and depth of the work of the inspectors in compiling their report. The inspection process is an important element of the overall Companies Act investigation regime which is essential in helping to maintain the effective regulation of corporate activity. Anything which were to reflect poorly on the inspection process would be detrimental to this regulatory effort.

We consider that the public interest in disclosure is outweighed by the public interest in withholding the information.

If you consider that your request for information has not been dealt with in accordance with the FOIA then within two months of the date of this letter you should please ask me to have this response reviewed by a senior official. If, following this review, you are still dissatisfied you may ask the Information Commissioner for a decision as to whether your request for information has been dealt with in accordance with the FOIA. His address is Wycliffe House, Water Lane, Wilmslow, Cheshire, SK9 5AF.

Yours sincerely

Colin Evans

COLIN EVANS

CASE MANAGER