Comment: The North can't have jobs at any price

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IN THE recession-struck North-east of the early 1980s, it was a running joke that wherever Tony Benn paid a visit, there must have been another big closure. The man was like a wandering prophet of misfortune. The very sight of him waving his hands around in the main streets of Consett or Gateshead and calling for real socialism sent people home expecting a P45.

For the past few years on trips back to the North, I have from time to time bumped into the other, more cheerful Tony, who speaks for Sedgefield at Westminster and nowadays the other way round too. He has usually been opening things. Mr Blair has been to factory openings what Mr Benn was to closings. So the sight of the Prime Minister last week at the doomed Fujitsu plant in his own constituency was the first acknowledgement that the Britain he governs is not going to be a succession of glad, confident mornings.

A tight, miserable fearfulness about jobs still affects the North-east, the legacy of the 1930s and the steady, relentless decline of coal and steel after the war. "Why is there all this fuss when the North-east has job losses? It happens everywhere," says a southern colleague. The answer is that it is so bad because it has happened so many times before. There is an angry old political folk song about it which goes, "I'm standing at the door/At the same old bloody door/Waiting for the pay-out like my father did before". The repetition of the same cycles in a different age is what hurts and degrades.

This time, they thought they were getting it right. You couldn't go wrong with microchips. This was the computer age. Having seen the industries that produced instantly recognisable, domestic things - coal and steel - melt away, people placed inordinate trust in jobs based on technology and on the staying power of foreign companies. So did the last and the present government and their regional development quangos, which bid each other down to offer the best deal to inward investors.

But suddenly the North-east is a region that never wants to hear the word "semiconductor" again. The great closing-down sale has begun - Peter Mandelson, in his first luckless outing as Secretary of State for Trade and Industry, announced that together with the Siemens management on Teesside, they would look for another buyer. There has not been a rush. Then Mr Blair told the Fujitsu workers that he could only help their hurt. Well, he has to say something.

Of course Mr Blair is right to emphasise that when the world market twists and turns like a fairground waltzer, it is unreasonable to blame him. But we should not let him off the hook entirely. His messianic, visionary style encouraged excessive faith in his powers. The plaintive sign held aloft at a factory in Sunderland facing closure read: "What about us, Tony? Why don't you come and see us?" as if one healing touch could save them. But who was it who first used kingdom-of-heaven language to describe his New Britain? The trouble with asking people to trust you is that they often oblige.

The extent to which the whole foundation of New Labour is built on economic optimism has been neglected. Welfare-into-work becomes plain, grim old welfare when there is no work to go round. Social cohesion doesn't stick so well when communities are divided between earners and claimants. The relentless search by the New Labour elites for a Third Way seems a bit of an irrelevance this week in Tyne and Wear. Any way that brings jobs will do nicely.

When a downturn comes, modern governments can do little more than exhibit their impotence to voters in the most acceptable fashion. But the danger is that this task will be seen as a mere presentational problem and that Mr Blair will weather it by trotting round various closing factories feeling more and more people's pain.

That will not do. It is time, amid the empathy, to take stock. The sudden shedding of so many jobs in outposts of multinationals raises questions about regional employment policies. These have relied heavily on government forking out vast sums in enterprise support or in tax breaks for few guarantees that the company will stick with a plant through difficult times. This is the government that tells us to think about the long term. But some jobs, like those at Siemens, which were created last year at a cost of some pounds 30m only to disappear now, are too expensive by anyone's reckoning.

Perhaps Siemens is right and no one could foresee the slump in the price of its chips. But how much rigour has gone into assessing these risks? Peter Mandelson is under huge pressure at the DTI to provide regional assistance to Philips to develop wide-screen televisions. If not, the company threatens jobs in the minister's Hartlepool constituency and in Durham. Hmm. If I were the chief executive of Philips, it might cross my mind that the secretary of state is in a bit of a bind.

The fact that the company demanded first pounds 22m and that the bidding has, I hear, gone down to around half that makes me more sceptical yet. I hope Mr Mandelson preserves his famous rigour. Political pressure to create jobs should not blind us to the risk of large companies exploiting government discomfort over employment to extort unfeasibly generous, string-free support packages. The long-term interest of regions prone to unemployment is to encourage companies that stay, grow and produce local spin-offs. We do not seem to have made a spectacular success of this. It looks lovely on the regional development agency annual reports when hundreds of jobs appear in one fell swoop courtesy of a Korean cyber-widget maker. No one is called to account when they all go again.

It feels all the stranger to be back in an area where people are scared for their own or their family's jobs, when national unemployment is at an all-time low. But all the Norman Tebbits and bicycles in the world are no use to people trapped in the area of the country with the lowest housing and living costs and too often with skills that are not needed elsewhere.

Besides, a lot of them like it there. Mr Blair says he will ensure they are retrained, which assumes that the retrainers can predict correctly what skills will be needed, in what quantities and where. Maybe they have got better at these prognostications since the 1980s. It would not be a bad idea to check. Failing that, I expect Mr Benn will be popping back up, next time round.

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