Government approach does little for clarity

The massive job and capacity cuts planned at Corus highlight two key things — the parlous state of UK manufacturing and the government’s weak and inconsistent approach to industry.

The political attack on Corus was loud, with the Prime Minister and others weighing in to criticise the steelmaker for not having told the government beforehand of the precise cuts it intended to make.

This is a pre-election government which is getting awfully twitchy about large-scale job losses in traditional industries. No matter how much ministers extol the successes of the economy, they are well aware that car and steel plant closures make the front pages. and those who are left without jobs in unemployment blackspots — which are usually Labour heartlands — fail to appreciate the glittering scenario talked of from Whitehall.It was easy for Tony Blair and trade secretary Stephen Byers to cast Corus chairman Sir Brian Moffat as arch villain.

The last time the government vented its anger at a company was over BMW’s hurried plans to sell Rover cars to a venture capital group which wanted to shrink the business.But that was different. BMW had denied any intention to ditch Rover if it received aid to develop a new car.

Corus, however, made it very clear last December that there would be a large restructuring in the new year. By contrast, there was no public anger at Ford over Dagenham, despite a previous commitment by the company to bring a new model to the Essex plant. Ford engaged with the government early and promised substantial money towards regeneration.

General Motors, Vauxhall’s parent, was also spared recriminations over its decision to shut the Luton factory. No money was offered, but it was probably judged a decent type for letting the government know at least one or two days in advance that Luton was to go.

The government has strongly resisted a European directive requiring companies to consult their workforces when large job cuts and closures are on the cards. It believes that would be too prescriptive and deter investment. And yet ministers are the first to complain when they have not been consulted.

Despite the might of globalisation, the government does have some power, but it is afraid to exercise it.

Corus, like many other manufacturers, has repeatedly warned of the damage done to industry by the strength of sterling. But this, too, is an issue that the government has shied away from, fearful of even opening a meaningful debate.

Instead, its industrial policy is increasingly being seen as shouting at some companies while not uttering a word about others which play the diplomacy card more effectively. This does little for clarity or policy.

Christine Buckley is industry editor of The Times, a UK newspaper.