City And Business: Rover will be the acid test for New Labour

So much for Alastair Campbell's attack on journalists. In his recent speech critiquing us, the prime ministerial spokesman said nothing about the economic circumstances turning reporters into desk-bound, herd-like ignoramuses with a taste for cheap gags instead of facts.

Still, Campbell hit home truths. It's true that journalism risks terminal degradation. Many reporters really have lost the capacity to find out what's happening in the world, then say it in an entertaining way that also informs.

Despite the self-serving, control-freak claptrap mixed into the speech, here, I thought, was a man - a former journalist - genuinely disturbed by the fact that honour is draining out of the craft. Certainly, I reasoned, Campbell understands that the dialogue between reporters and government is two-way.

So, I concluded, I have been prejudiced to assume the Downing Street press office is in business to leak information select- ively to safe reporters with the aim of managing the news.

I decided to give my new perspective a reality check. One story to which this section has devoted its limited resources in recent weeks has been Rover. The threat of cuts hanging over the company's Longbridge assembly line is a business story with ramifications trailing back to 1906, when the original plant was built.

Rover is a potent symbol of recession in the manufacturing sector. Many of the 14,000 jobs in the Birmingham plant, not to mention the estimated 36,000 directly connected to it, are at risk, so it's a wrenching human interest story as well.

Upon Tony Blair's return from King Hussein's funeral a fortnight ago, reports circulated that the prime minister had spoken with the German Chancellor, Gerhard Schroder, about Rover and Longbridge. I rang the Downing Street press office and asked for confirmation of the Jordan encounter and a briefing on the Prime Minister's role in the BMW-Rover- government workout. An aide said a press officer would ring back, but of course no call came.

Ten days passed and I rang again. This time a press officer named Peter Wilkinson did ring back - to sneeringly inform me that the encounter between Blair and Schroder had been "widely reported" and that the PM himself had discussed it "on The Jimmy Young Show".

After a volley of further insults, a craven denial that he had intended to insult me, and the helpful tip that the Department of Trade and Industry, not Downing Street, was the "lead department" on Rover, Wilkinson rang off leaving me with two thoughts.

First, I challenge Wilkinson to a Thai kickboxing match - three, five, or ten rounds, his choice - in a public arena. Donations will be solicited from anyone who cares to come along and watch. I will win despite being at least 20 years older, not only because I was a Green Beret in Vietnam, but also because one thing I've observed about New Labour minions is that they are all soft, pudgy, too-clever-by-half Mama's Boys.

Proceeds from the match will go to the Longbridge workers who lose their jobs after BMW, the Government, and the unions announce the cuts. This fund may be as good as the out-of-work Longbridge workers get from a Government official - aside, of course, from the chance to sit around, like the characters in The Full Monty, in some absurd retraining scheme preparing them to scoop chips and squirt ersatz milk shakes at McDonalds.

The second thought I had was that Wilkinson's boss, Campbell, is a joker. Over the past fortnight there has been considerable talk about the genetically modified food controversy being a defining moment for the Government. The notion is that science cannot yet tell us what GM foods will do to us, so it is foolhardy for the Prime Minister to assert it is safe to eat them. The further notion is that Blair is saying these things because he is in the pocket of Clinton who is in the pocket of Monsanto, the GM food giant.

As time passes, however, I bet Rover will emerge as at least as much a defining issue for the Government as Monsanto. It has been easy for New Labour to talk in the abstract about embracing post-industrial society as the proper response for countering industrial decline. I go along with much of this talk. The trashing of Cool Britannia a year ago, it seems to me, did a material disservice to boosting the economy. Cultural exports should be big business.

I also go along with efforts to make better use of Britain's intellectual capital. Why sell it cheap to the Americans? Why can't the UK find a way to get its own capital behind its software programmers? Why should it be Microsoft that establishes a "campus" in Cambridge to promote the academic- industrial complex?

But talking about modernising the British economy in the abstract is one thing. Executing policies on the fault line between the old and new - Rover - is another. How the Government deals with the fact that Rover is hugely important to the West Midlands' economy, and also has a highly questionable future, will tell us a great deal about its true character.

Last week the Treasury leaked the news to the Financial Times that it wanted a deal on Rover linked to productivity improvements at Longbridge. Fine - in the abstract. Times are tough. The challenge facing us all is to make more of less.

Key to the Rover deal, however, will be what productivity improvements mean. Is the term a gloss on on the ancient notion of forcing workers fearful of losing their jobs to buckle under? Or are there new Third Way policies in the works to genuinely get more out of less at Longbridge?

Perhaps I'm being impatient. Perhaps in due course the Government will use Rover to demonstrate its flying colours. Perhaps the Rover deal will quieten the sceptics who argue that the Third Way is empty rhetoric. However, the process leading to that happy moment is proving Old Labour - old everything, indeed - in terms of transparency. Hasn't the Government called for greater transparency in other contexts?

Wilkinson, I'm serious. Thai kickboxing. Three, five, or 10 rounds, your choice.

TWO postscripts. First, on GM foods. I don't understand why Blair and Campbell have not done a better job of drawing a distinction between biotech as GM food production and biotech in all its other guises - pharmaceutical research, for example. Biotech is like information technology, telecoms, and the creative industries - an environmentally clean industry with tremendous growth potential.

It runs the risk of being tarnished with the GM brush.

Second, news management. New Labour loves spin. But the Government doctors remain amateurs compared with the old pros in Washington. Consider how Washington has played the what-shall-the-Group-of- Seven-do-in-the-wake- of-the-brush-with-melt-down-last-autumn story.

Washington wanted virtually nothing done. Germany, France, and Japan have all been making noises about reforms to limit exchange-rate volatility and international capital flows. This clash appeared to come to a head at yesterday's meeting of G7 finance ministers in Bonn.

But the Washington fix was in. At the annual meetings of the International Monetary Fund and World Bank last October, right after the collapse of Long Term Capital Management really did push the global financial system to the brink, G7 ministers had to respond.

So they set up a study group to consider steps to guarantee greater international financial stability. Bundesbank president Hans Tietmeyer was put in charge. Because he was a German, and had stood up to the Americans in the past, no one could seemingly accuse him of being an American stooge.

Except for the fact Washington - and anyone else who knows the personalities dominating the international financial scene - was aware that Tiet- meyer doesn't believe in market intervention. He doesn't even believe in bailouts for stricken emerging markets, or the banks lending to stricken emerging markets' governments.

Washington knew that when Tietmeyer reported a do-nothing response to last autumn's financial crisis - as he did yesterday - it would get what it wanted. That's premier league news management.