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Nils Blythe writes for the Blog:

Eddie Mair | 16:55 UK time, Monday, 26 January 2009


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When businesses run into trouble there is a surprisingly wide range of responses from government. If it's a bank, it gets rescued with taxpayers money. If it's a retailer, there's not the faintest chance of it being bailed out, even if like Woolworths it has around 30,000 employees. But steel makers and car companies occupy an uneasy middle ground. The main argument for treating them differently to retailers, is that they are major exporters. Britain has had an annual trade deficit for years. During the long credit boom that was often brushed aside, as foreign money flowed into Britain and helped us pay for all those nice imported goods. Now, boosting exports will have to be a priority. And manufacturing - although a small part of the economy - still produces goods we can sell abroad. The steel company, Corus, is asking the British government to do what the Dutch do and help pay the wages of temporarily laid off workers. The car companies want help with providing loans for would-be car buyers. And there will certainly be other calls for help in the coming months. And the picture is complicated because many of the big manufacturing companies in Britain are foreign owned. For example - both Corus and Jaguar Land Rover belong to the same Indian-based group. But the arguments for maintaining a manufacturing base in Britain are strong. Even if it's all very hard on redundant shopworkers.

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