Labour ‘spin’ condemned for rescue talks leak

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Jim Godfrey, a politically-appointed special adviser to former trade secretary Patricia Hewitt, was singled out in the investigation for leaking that talks between the firm and Chinese motor group SAIC had broken down.

MG Rover Group would "almost certainly have escaped administration and liquidation" if the Chinese deal had gone ahead, according to the report.

On 5 April 2005, an article appeared in the press claiming that talks over the rescue had "stalled". The Government refused a bridging loan and the firm collapsed soon after.

The MG Rover report's authors said the talks and the firm had been at the point of collapse, but still condemned the leak: "While, in the event, MGRG would have gone into administration in April 2005 with or without the press reports, we consider that telling the press, without consulting the Group, that the talks had "stalled" was irresponsible."

Mr Godfrey failed to impress the investigators. "We sometimes had to ask Mr Godfrey substantially the same question a number of times, and his answers were not always clear or consistent," they said. Another adviser, Geoff Norris, was also criticised for briefing the media without notifying the Phoenix Four.

Liberal Democrat business spokesman John Thurso said: "This is a damning verdict on the pervasiveness of New Labour's spin machine in the workings of government."