MG Rover's collapse jolts British election

Britain's last major carmaker filed for a type of bankruptcy last week, putting pressure on Blair.

No sooner had Prime Minister Tony Blair called Britain's election than the country was shaken by the dramatic collapse of one of its biggest industrial names.

The victim was MG Rover, which filed for bankruptcy last week after a takeover bid from a Chinese automaker foundered. The demise of Britain's last major domestic carmaker is a blow to its once-proud automobile sector, which has suffered assembly plant closures and surrendered major marques like Jaguar and Rolls Royce to overseas giants in recent years.

In political terms, it's as if General Motors went bust less than a month before a US presidential election. As many as 6,000 workers at the Longbridge plant in central England face imminent layoffs. And many more jobs in related industries are on the line. Locals say an entire region that would normally support Mr. Blair's Labour Party on the May 5 election is now in shock.

"It's devastating for the community," says Toni Round, whose partner Darren Doughty has worked at MG Rover for 16 years. "I don't think you can imagine how many people it's going to affect," she said at a rally by scores of family members of Rover workers outside Downing Street on Wednesday. "People are bitter, but they don't know who to blame," she adds.

"It's like a plane crash," says Nick Matthews, a local expert in the manufacturing sector. "It's all the people in the same place at the same time. That plant has been there since the 1890s."

The Rover saga looks awkward for Blair as he seeks to retain his job. Touting Labour's deft economic stewardship is central to his campaign. In a manifesto published Wednesday, entitled "Britain Forward Not Back," the economy was featured in chapter one.

Indeed, the economic story has dominated the opening two weeks of the campaign. A survey published Thursday found that more than a quarter of voters felt that taxation and the economy in general were the most important issues.

Curiously absent have been any meaningful exchanges about the Iraq war, which could yet cost Blair, given its unpopularity with Labour supporters; and about relations with Europe, always a divisive issue at election time.

"The government is not talking about Iraq because it knows it's not popular," says John Curtice, professor of politics at the University of Strathclyde. "The Conservatives are not talking about Iraq because they voted with the government."

Similarly absent in this campaign are questions about the war on terror, as well as moral issues like abortion and gay rights that divided US voters in the 2004 presidential campaign. Instead, the main parties have dealt chiefly in numbers, paddling fiscal statistics back and forth in a frenzied game of election ping-pong.

Analysts say this is no surprise. Tax and economic issues often dominate British elections, along with debates about how much of the national budget should be apportioned to public services.

"Elections are seldom decided on foreign affairs," explains Dr. David Baker of Warwick University in central England.

"Your average voters are over 45 years, with a mortgage, with tax interests, children at school, worried about their health," he adds.

To woo these average voters, the opposition Conservatives have offered a tax- cutting agenda based primarily on paring back government. The Liberal Democrats put tax hikes at the center of their manifesto, launched on Thursday.

Labour, meanwhile, has played the steady-hand card. At campaign events, Blair and his finance minister, Gordon Brown, reprise the same theme: During their eight-year tenure, Britain has enjoyed low inflation, low home-loan rates, record employment, and a jobless rate at 30-year low points.

"We ask the British people," intoned Mr. Brown this week, "Are you better off than eight years ago?"

Some in the Rover community at Longbridge just southwest of Birmingham - traditionally a Labour stronghold - might not be sure. The steady decline of manufacturing in Britain has reduced employment in the sector to a record low point. The vast majority of Britons - more than two-thirds - now work in the service sector.

"Pull your socks up, Tony Blair," says Gemma Cartwright, whose husband has worked at Rover for 15 years. "Britain needs a manufacturing industry."

But some experts say that Rover's woes largely predate the Labour era. And they add that, thanks to Britain's newfound economic flexibility, workers now stand a far better chance of finding new employment than they did 20 years ago.

"It's not like the 1980s," says Nick Matthews of the Warwick Manufacturing Group, an independent body of academics from the afflicted West Midlands region. "The regional economy is very robust."

The government has already extended a £6.5 million ($12.2 million) lifeline to keep Rover afloat for another week. And the Times of London reported Thursday that it had set aside another £25 million ($47 million) aid package while Rover tries to revive a rescue deal.

But Blair may not need such a bailout to secure his political future. Most observers expect him to win, though his parliamentary majority may narrow. The latest poll gave him a six-point lead over the Conservatives. Experts say the Conservatives will need a lead of almost 10 percentage points to win, given the uneven spread of support around the country.