Which raises the question: is having people out of work "bad" for the wider economy? (It's obviously "bad" for those people who aren't being paid, but the economy doesn't care about people so that's an irrelevant concern). If the answer is "yes", is it right for a government to find ways to get people into employment?

There is a simple (simplistic?) argument that goes that it's cheaper and better for the economy to have a person producing 1000 units of value to the economy and paying them 1500 units to do so if the alternative is to pay them 1000 units to do nothing. This means government intervention and subsidy, because although it's good for the economy it's bad for any individual employer.
I know there are all sorts of arguments about market distortion, structural inefficiencies, impact on long-term competitiveness etc. (I'm sure CdM can come up with plenty of them). And yet it seems to me there's still a fundamental truth in there which those arguments don't eliminate - especially if aid and subsidy is carefully aimed and time-restricted.
Having said that, Rover was dead in the water 5 years ago and the 6000 working there have had 5 years more work and pay out of it than they had any right to expect. It is not a suitable recipient for further aid in its present form or on its present site. All the government can do is help to manage the transition to other jobs for the people concerned.

[rab] Every day out of work for someone who is able to work is a day's labour lost forever. Labour is the most perishable commodity there is. The fewer people who work, the less stuff is created. So yes, having people out of work makes us all poorer. Of course, I'm taking the view that the more stuff we have (including intangibles such as art and clean streets) the better; someone who takes the opposite view, that the less stuff we have the better, like some extreme environmentalists, would presumably want to see unemployment rise as high as possible, and will be celebrating that a manufacturer of evil machines has finally gone out of business.

[rab] You also take the view that all jobs result in "stuff being created," which isn't necessarily true.

[Darren] Do I? Or did you mean Raak?

[Darren] Assuming you meant me, yes, there are unproductive jobs, such as, according to the stories, a lot of the management jobs at Rover. Paying people a fat salary to do nothing does nobody any good, including the people paid the fat salary.

Yes, I meant Raak. Sorry about that.

CdM] You're right in that I wasn't defending the practices I listed (and I'm pretty sure Rosie wasn't either). The point we were making was that it's a conscious political choice for the government to let Rover go to the wall, and that this is a bad thing. I'd echo most of INJ's and Raak's answers to rab, as well. I think it is the government's responsibility to do something about employment.

There's a really lovely argument in Peter Singer's The President of Good and Evil against the "it's my money" position re: tax (and by extension re: interventionist economic policy), which I'm now going to have to dig out and mention. There we go, the book was useful for something after all.

[Projoy] That should be interesting. It is my money. By what right does he claim the government gets to take a cut of every business transaction?

[Irouléguy] By that reasoning, pretty much everything is a conscious political choice. Your local newsagent closes down? Conscious political choice -- the government could have paid them two million pounds to stay open. You chose to go onto the internet today? Conscious political choice! -- the government could have bribed you not to.

If you want to make an argument for why the government should intervene in this particular case (and a good argument has to be one that also explains when the government should not intervene), then that's fair enough and I would be interested to hear it. I have to say I think Raak's summary is the appropriate one here, though: Rover were making something that people didn't want to buy. The End.

(On the other hand I disagree with Raak on the 'it's my money' argument, but I think that is a whole different debate.)

CdM] I don't think the first point follows at all. The closure will cost something like 5,000 jobs at Longbridge, plus up to 15,000 in suppliers - that's up to 20,000 wage packets taken out of the local economy, which will then have a further knock-on effect across the West Midlands. Any government would have to take a position on an economic event of that magnitude. The tens of thousands of people whose lives are blighted is why the government should intervene - and I don't see why a coherent case for that depends on saying that if it were a different set of people the government shouldn't. Obviously I don't think every failed small business is a case for government intervention, but I think that's something of a straw person.

As for Rover making something that no-one wanted to buy, again some exaggeration: Rover couldn't sell enough of what it produced to persuade the people with the money to invest in it, which is a rather different matter. And then there's the little matter of the £500 million hole in Rover's finances (allegedly). Taking the money and running comes to mind.

I actually think this Government is being quite brave in letting Rover die. 30 years of government subsidies of BL et al has failed to produce a company that comes close to making a profit, let alone a decent product. Whilst I fully accept Irouéleguy's argument is pertinent, that volume of investment would shirley be better placed in other sectors where there was a chance of making it work? And to do this in the run in to a general election is, perhaps, unprecedented. And before the accusations fly, I do not (and have only once) vote(d) Labour.

But I do work for a rival car company...