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Motor Show: Secretary of State defends Rover bosses' rewards

Trade and industry secretary, Patricia Hewitt, defended MG Rover directors at the Sunday Times Motor Show Live against claims that MG Rover executives are being over rewarded financially.

“The financial rewards gained by John Towers, Peter Beale, John Edwards and Nick Stephenson - for buying and restructuring MG Rover - were 'not excessive'”, says Hewitt.

Hewitt stated that “the size of the sums had to be measured against the risk which the four directors had taken when they purchased MG Rover”.

She added that there had been a very big risk when setting-up Rover again, as it had come at a time when it looked like the end of the road for car manufacturing.

The row over how much MG Rover's directors have paid themselves started earlier this year when the Guardian newspaper made a series of allegations against the men who run the Phoenix consortium that saved Rover.

Chairman John Towers, and the other directors, stood accused of having awarded themselves large salaries and a £13m pension fund - way in excess of what was appropriate for a struggling company, and in contrast to the fortunes of a workforce whose own pension fund was found to be over £70m in the red.

The trade and industry secretary also said she had sympathy for car manufacturers facing red tape from Brussels. "The cumulative effect of regulation from Europe is a concern," adding that Britain has the agreement of its European partners to ensure that production is not driven off shore.

The secretary of state hailed the success of the UK motor industry when she addressed the Vehicle Manufacturers Conference at the show.

"The fact that in future one in four of all Fords and a significant percentage of all BMWs will have British-built engines is an brilliant achievement. The government has provided the foundation of economic stability and we are working with the industry to keep it competitive," she said.

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