Manufacturing industry suffers as Government focuses on banks

Mar 3 2009 Birmingham Post

"Working closely with… moving as fast as we can … holding a seminar next week … urgently assessing … continues to look very carefully..."

Are these the words of someone who is on top of the biggest challenge faced by the manufacturing sector since the Industrial Revolution – or the obfuscation of a man who simply doesn’t know what to do?

An alternative interpretation is that Lord Mandelson and the government have given up caring for what they see as two lost causes: the automotive industry in the West Midlands, and Labour’s electoral hopes for the region. We sincerely hope this analysis is way off the mark and that the business secretary’s somewhat underwhelming response to the West Midlands Auto Summit is but an understated precursor to a wave of action that will overwhelm the industry with its focus, urgency and vision.

For that is precisely what has been lacking so far in this sorry chapter in the history of a government without a cohesive industrial policy.

Energy and action there has been aplenty when it has come to BERR’s response to the threat to the banking sector, but that has served only to show up the contrast to its approach to manufacturing.

And in a kind of joyful doublethink, government ministers happily discuss breaking the law to prevent a few bankers receiving their pensions, while at the same time hiding behind European bureaucracy as cover for their lack of similar courage when it comes to dealing with the manufacturing crisis.

Simultaneously, they pour billions in to prop up the very banks that now sit on the loan capital so desperately needed to get industry moving again.

Lord Mandelson today points to actions that he claims are a serious response to the crisis. But nothing substantive has yet been delivered, and industry representatives are still scratching around to find examples of auto industry suppliers and manufacturers who have actually received a penny of new cash.

As Professor David Bailey points out, the asset purchase facility trumpeted today by Lord Mandelson is still not available to the manufacturing or auto industry.

Why not? It was announced last year and was up and running two weeks ago. The Bank of England should be instructed immediately to use it to purchase bonds in – for example – Jaguar Land Rover.

This region is in the early stages of what will be a long and drawn-out recession. Only government intervention can help it weather the financial and social storm to come, and every day’s delay extends exponentially the misery of its citizens.

Lord Mandelson has but little time left to ensure that his name does not become a byword for the industrial collapse of the West Midlands.