Outlook: The value of aid in Merseyside

The last time anyone tried to build a prestige car on Merseyside it ended in tears with the closure of British Leyland's TR7 factory in Speke. But that was two decades ago, since when much water and a lot more Spanish practices have passed under the bridge. Today Jaguar will register its vote of confidence in the North-west by announcing that its new small car, the X400, is to be built at the Ford Halewood plant.

Jaguar is owned by Ford, which has separately decided Halewood is not up to building something as bog standard as the new Escort. Fortunately, it has no such qualms when it comes to building cars to compete with the likes of the BMW 3-series, the Audi A4 and the Mercedes C-class models.

To be fair to Halewood, standards of quality, reliability and efficiency have been transformed since the days when Red Robbo ruled the roost over at BL. But that is not the whole story. Its productivity still lags a long way behind that of the two Ford-owned American plants which were competing for the investment. Halewood is also further away from its markets than the German plant that was also in the running, since the new baby Jag, unlike existing models, will be aimed squarely at the European market.

What Halewood also has going for it, however, is assisted area status. That translates into an aid package worth somewhere in the region of pounds 50m out of a total investment of pounds 400m. The 4,000 jobs the baby Jag will preserve are welcome, but what a pity that Halewood had to rely on a leg-up from the taxpayer to secure the investment and couldn't have done it on its own merits.