‘Quite inadvertently we let the impression build up that we were only interested in something called the “new economy” - the dotcoms, the internet and all that. And that we weren’t interested in traditional manufacturing - which was part of the old economy. With no future in the modern economy. This is nonsense.’ (1)
UK trade and industry minister Patricia Hewitt was correcting a false impression created by…the Department of Trade and Industry (DTI). The White Paper that started the doubts was Our Competitive Future: Building the Knowledge Driven Economy, written for the DTI by Charles Leadbeater. Somewhat ominously, Leadbeater had made a reputation writing about the new era of ‘post-Fordism’ for the Financial Times and Marxism Today, where he dismissed manual workers as victims of ‘the decay of the old social-democratic order of Fordism’ (Marxism Today, October 1988).
In his popular book version of the White Paper, Living on Thin Air, Leadbeater argued that the ‘new economy will reward celebrities and stars, gamblers and entrepreneurs, but it will offer less, at the moment, for a very large swathe of people who would have had stable jobs under the old order’. Among those are the 6,100 employees at the Rover Car Company in Birmingham, which went into administration a week ago.
The DTI has been busy talking down traditional manufacturing as much out of desperation as out of spite for its ‘old labour’ workforce. Britain’s manufacturing base has contracted considerably under New Labour. The high pound has often been blamed for the poor performance of British exports, but it would be truer to say that that had only revealed the underlying weakness of investment in British industry. Apologists say that there is no reason in principle why cars should be made in Britain and they are right - except that Ford and Toyota seem to manage just fine. Of course it is true that job-losses in industry have been more than compensated by the growth in the service sector, but with wages typically much lower the shift represents a defeat for the workforce.
The writing was on the wall for Rover in 1994 when it was bought by Bayerische Motoren Werke AG (BMW). BMW was keen on the Rover brand but quickly discovered that profits were not enough to cover Rover’s substantial debts, especially the pension fund. In 2000 BMW gave away £385million worth of unsold cars, a £112million cash injection, an interest-free loan of £427million repayable by 2049 all in exchange for £10 - but then Rover’s debts had already cost it £2.85billion.