Took the MGB into my local inspection guy this morning and he didn't even blink about the rear discs. Had a bit of a look and filled out the pink slip. Drove straight there and straight home. By the time I was home the Pink slip had been lodged with the RMS so I paid the fee and it's all good.
One issue that I need to address is the brake squeal, more groan. When I lightly brake they squeal. Pressing more firmly and the squeal goes away.
Clearly coming from the back. When I disassembled the Festiva calipers the pads had some red coloured, rubbery stuff sticking the pads to the caliper.
I cleaned all this off and didn't re-apply anything else. (I'm actually still running the old pads as they had lots of meat left, I just cleaned the face on the linisher before putting them back in. I've got new ones but didn't see the need to use them - yet.)
It appears this red stuff is some sort of anti-squeal magic and I think I should replace it or maybe wait to see how the pads go over the next few weeks?
I asked these questions on the forum and the consensus was to use the new pads with some sort of anti-squeal stuff.