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Programme highlights Tuesday, 24 April, 2001, 14:31 GMT 15:31 UK
Motorola's code of conduct
Workers at Motorola's Bathgate factory in West Lothian
Three thousand jobs could go after closure
The mobile-phone makers Motorola have ignored the pleas from Tony Blair and other ministers - and announced they plan to close their factory at Bathgate in West Lothian.

The decision could mean the loss of more than 3,000 jobs.

The company explained that it was conducting a worldwide restructuring programme which reflected the global decline in demand for mobile phones.

Motorola, the statement said, intended to remain an important player in the UK electronics industry.

"Bitter blow"

The Government described it as a bitter blow. Motorola's Bathgate plant is at the heart of the so-called Silicon Glen - where some of the hottest names in the IT revolution have manufacturing bases, including IBM, Honeywell, Compaq and so-on.

The problems confronting telecommunications firms across the world threaten the very industries by which Mr Blair sets such store.

A Government spokesman said the news was "particularly frustrating" because of the high productivity levels in British industry.

Fury

Workers at the factory who spoke to reporters sounded a note of resignation: the main union involved, the AEEU, expressed its fury: and the TUC General-Secretary, John Monks, told the World at One that the closure demonstrated the need for new rules on consultation.

As if to prove his point, the French Government announced new legislation today to make it harder for multi-national companies to sack workers.

There has been national outrage in France - leading to boycotts - at Marks and Spencer's decision to close its French shops and Danone's attempt to lay off hundreds of workers in its biscuit factories.

Conflict

Even if new restrictions deter some investment, and hold back economic growth, that's a price that the Socialist Government believes should be paid.

But tightening the regulations governing redundancies - together with measures like the 35-hour week - are at odds with the Gordon Brown recipe for economic success.

By chance Mr Brown was making an important speech this morning, reflecting on the strength of the British economy and its ability to weather global economic storms rather better than most of its competitors.

Most of the world may be eyeing nervously what's happening in the United States - and having nightmares about looming recession - but Mr Brown maintains that Britain is uniquely well-placed to withstand the shocks.

No change

He told the European Bank for Reconstruction and development that 'risk and instability anywhere have repercussions everywhere'.

He repeated that he saw no need to alter his predictions for growth here, on which all his taxing and spending plans are based - and that view seems supported by a report from the International Monetary Fund later this week - predicting growth this year at 2.6%: that's in the middle of the range suggested in the Budget last month.

He went on to emphasise that if other economies wanted to end the boom-bust cycle - as he believes Britain has done - they had some way to go.

But Gordon Brown's recipe for the economy has some unpalatable ingredients. One is labour flexibility - at least when it leads to sudden redundancies and close-downs such as that at Motorola.

Unequal returns

Mr Brown insists he's right about flexibility - and by implication, countries like France are wrong.

Flexibility isn't the only policy with unattractive side-effects.

The latest figures show that the proceeds from a long period of sustained economic growth in Britain have not been shared out equally.

The gap between rich and poor - as measured in post-tax income is growing wider... after closing steadily during the Major years.

Among other things Mr Brown has focussed on regressive indirect taxes - rather than reducing income tax - which is progressive.

Poorer people suffer unduly from higher duties on cigarettes, alcohol and fuel.

And there's another price: Mr Brown's relentlessly prudent management of the economy has had other unplanned-for outcomes.

After bearing down so firmly on public spending, it's now proving more difficult than expected to boost investment in schools, hospitals and other services - so much so that Labour has actually spent less each year than the Tories did under John Major.

The cash is there - it's just that it can't be spent, because there are no skilled people available to fill extra posts as teachers, nurses or police officers.

The Chancellor was not available to discuss these issues on the World at One - but hear what his predecessor, Kenneth Clarke, had to say.

Links to more Programme highlights stories are at the foot of the page.


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