BUSINESS Secretary Lord Mandelson has been asked to investigate the collapse of Ethel Austin and whether owner Elaine McPherson is a “fit and proper person” to run the company.

George Howarth, who is seeking re-election as MP for Knowsley North and Sefton East – the constituency that includes the 76-year-old retail chain’s headquarters – has urged the Government to intervene.

Mr Howarth said he was “shocked” when Ms McPherson put the business into administration on February 8 and bought part of it back last month, after 2,300 workers had lost their jobs.

It was the second time Ms McPherson had placed Ethels in administration before buying it back.

Mr Howarth acted after pleas from Ethel Austin workers and constituents. In a reply to one, he revealed he worked closely with Ms McPherson last year to resolve problems when the firm was unable to pay £7.2m in PAYE and VAT to HM Revenue and Customs.

He said: “It all had to be done without publicity because of concerns about frightening suppliers.”

But he said he has now raised two issues of “huge concern” with Lord Mandelson. He explained: “First, the way the workforce has been treated, and second how Elaine McPherson has been able to put the company into administration and then acquire the bits of it that she wants without any consultation with the workforce or anybody else.

“That raises questions about the way she is managing this and whether or not she is a fit and proper person to own a company like that.”