Rover 'groundhog day' - we never left the 70s!

The strategic macroeconomic thinking [not] which characterises this Labour government (any Labour government, really) was on full display yesterday with Patricia Hewitt, trying to sound 'stateswomanlike' (and failing), announcing in grave tones a 'loan' (with repayment terms?) of GBP6.5m to allow this week's wage bill at Rover to be paid, so that there can be more time to try and salvage something from the wreck that is Rover. Do you think there is an election campaign just now?

The plain truth, long obvious to anyone who cared to look, is that this Labour government doesn't have the faintest idea how a modern market-led system works. Why haven't sales of Rover's vehicles been on an upward trend in the past year or so? Who wants to buy them? Not sufficient, it seems, to make it a going concern. That's the market.

Gawd give me strength! - Ms Patricia Hewitt, after talks with administrators and union representatives, announces this pathetic hand-to-mouth 'loan'. Where were they months ago, trying to facillitate the SAIC deal with practical measures allowable under EU regulations - not that I would have favoured giving more money even for the research/technical purposes which would have been permitted, but at least it would have had some logic. But of course there wasn't an election campaign last Autumn, so Tony and Gordon stayed safely at a distance. The government is now showing all the same old signs of panic reactions to events.

The real error was made, of course, five years or so ago when the government favoured the 'gang of four' over the Alchemy venture capital solution. That venture capital solution might not have turned the situation around, but it would have been private money at risk, not public, and the 'dowry' provided by BMW could at least have been used partly to give decent redundancy payments to many of the workforce, rather than it being frittered away on a business plan with little likelihood of long-term success. Instead many of them could have obtained retraining in activities which could be successful and profitable to them and their families and the firms they would have joined. All for political reasons. This government still thinks, instinctively, that private enterprise and that most dirty of words profit is something that needs to be avoided at all costs - but it is healthy profits that allow rising tax revenues; it should be so simple, but dogma still blinds these socialists.

UPDATE: (Monday 11APR05 - 12.55 BST) I just spotted this timely article at the Adam Smith Institute blog, telling it like it is with regard to Stephen 'Corporate Serial Killer' Byers.