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UK, ITALY: Italian business body hits at Brown

by Jean EagleshamFinancial Times
February 9th, 2009

Gordon Brown comes under fire on Tuesday from an Italian business organisation for appearing to “go wobbly” by giving wildcat strikers “licence to roll back the years” to a pre-Thatcherite age of British protectionism.

In an article in Tuesday’s Financial Times, Emma Marcegaglia, chairman of Confindustria, Italy’s equivalent of the CBI, laments the “protectionist tendencies and raw nationalistic instincts” evident in the dispute over the employment of non-British workers at the Lindsey oil refinery, Lincolnshire.

The article reflects widespread business alarm at the government’s initial failure to condemn the illegal strikes, and its endorsement of a deal requiring an Italian subcontractor to earmark jobs for British workers.

In a damning critique that will cause significant political embarrassment to Mr Brown – a self-proclaimed scourge of protectionism – Ms Marcegaglia contrasts the government’s position unfavourably with Margaret Thatcher’s robust defence of free and open markets.

“Lindsey is an example of precisely what we need to avoid – each country folding in upon itself and forgetting that the freedoms of the single market are key to ending this recession,” Ms Marcegaglia says. “A contract fairly competed and fairly won should be binding and upheld – if necessary by a firm show of support from the national government. In Mrs Thatcher’s words, ‘this is no time to go wobbly’.”

The Italian business group sides with the Tories’ verbal assault on Mr Brown’s 2007 pledge of “British jobs for British workers”, which featured widely on strikers’ banners. Ms Marcegaglia says the protesters “can be forgiven for thinking” the prime ministerial promise “gave them licence to roll back the years” to a pre-1980s protectionist era.

The article suggests Mr Brown could face some business resistance to his plans to use April’s G20 summit of leading economies in London to showcase his global leadership on economic issues. Ms Marcegaglia writes that the Lindsey dispute is an “early warning signal to all the leaders” “that incipient protectionism . . . will damage us all if it is not nipped in the bud”.

She also warns of potential damage to Britain from retaliatory action by companies elsewhere in Europe.

“Lindsey is a reminder that a large chunk of British industry is foreign-owned and financed and provides precious employment for British workers,” Ms Marcegaglia says. “But demands to employ only British workers might lead those foreign employers to take their jobs elsewhere in search of the same flexibility upon which Britain built its prosperity.”

She points out that at the same time as “Italian workers are being heckled for taking ‘British jobs’,” Gruppo Marcegaglia, her family’s steel company, intends to buy a Corus business “that will bring hope to hundreds of steel workers on Teesside”.

The report by Acas, the arbitration service, on its government-commissioned inquiry into union allegations surrounding the Lindsey dispute is expected this week.

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