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Thursday, July 23, 1998 Published at 09:25 GMT 10:25 UK

Business: The Company File

Bank blamed for job cuts

Productivity has improved at Rover plants in recent years

Union leaders have blamed the Bank of England's monetary policy committee for the decision by Rover to cut jobs.

The company, owned by BMW, says it has been badly hit by the strength of sterling.

Bill Morris: thin end of the wedge
Rover has already announced that it plans to take more parts from foreign suppliers, but it has now decided to cut at least 1,500 jobs and introduce a four-day working week as well.

'Villain' of the piece

Mike Robinson of the MSF union told BBC Business Breakfast that the Bank of England's Monetary Policy was to blame for the job losses.

[ image: Mike Robinson blames the Bank of England]
Mike Robinson blames the Bank of England
Mr Robinson said its decision to keep interest rates high was boosting the pound and making British goods uncompetitive abroad.

The policy was "economic madness, " he said.

He described the unions' relationship with Rover as very good and said he did not blame the company for any decision it took to protect itself in the future.

Mr Robinson said he was prepared to go with Rover to the Bank of England to put their case for lower interest rates.

A high pound meant cheap holidays which were all very well, but having no job to come back to was no good, he said.

Thin edge of a thick wedge?

Bill Morris of the TGWU also blamed the Monetary Policy Committee (MPC) and said he feared that the job cuts could be the "thin edge of a very thick wedge."

Mr Morris said the problem was economic, not productivity-related. Rover made good cars and the workforce had agreed new working practises and improved productivity.

But it could not sell enough cars abroad because sterling made them uncompetitive, he said.

Mr Morris questioned the criteria given to the MPC on which it based its interest rate decisions.

He said the criteria should now be up for debate.

Growth and employment targets should be considered as well as the target for inflation which was not enough to base monetary policy decisions on, he added.

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23 Jul 98 | The Company File
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