Why did Corus have to cut that many jobs?

It's the latest stage in the long decline of an industry. Since the creation of the old British Steel at the end of the 1960s, nine out of 10 UK steel jobs have gone.

The central problem for Corus today is a lack of customers in the UK - fewer ships are being built, the car industry is shrinking, and the loss of these huge customers leaves very little demand for British steel.

The company is also suffering from razor sharp competition, which is driving down the price of steel on world markets.

It is estimated that the world's steel industry can produce a third more steel than the markets want.

Put falling demand and falling prices together, and you have a company that is expected to turn in an operating loss for the year 2000 of �1bn ($1.48bn).

The company hopes that drastic cost cutting and a restructuring will drag the steelmaker back into the black.

There are some reports that blame the value of the pound and the weakness of the euro for the difficulties. But even Corus itself says currency is not a root problem. And anyway, the pound has been as strong and stronger against the main European currencies for a large part of the 1980s, and for almost all of the 1970s.

And the problem is not confined to the UK. During the past two years, 11 steel firms in the United States had to seek protection from their creditors and file for bankruptcy.

Why does Corus cut jobs at its UK operations, and not in the Netherlands or elsewhere?

Well, steel is not an easy product to shift around, and the main markets now are not in the UK but on the continent and closer to the Netherlands.

And it is the UK factories that are losing money - and so Corus has decided that they are the ones to close.

Furthermore, not all steel is the same. The Dutch plants make so-called secondary steel for specialist use, while many Corus UK mills are producing primary steel like flat steel.

But some questions remain unanswered. Dutch metalworkers trade union CNV Metaal has said that the planned increase in production at Corus IJmuiden should not lead to job cuts in the UK.

And it is not clear whether Dutch plants will be spared. The union has warned that the management of Corus has yet to provide a clear long-term strategy of how to turn around the decline in profitability for the whole group.

The UK government says it tried to help, but Corus did not listen. Since when do companies say no to subsidies?

Maybe it is a sign of honesty rather than stubbornness. Many industries around the world have been kept alive but ailing for years - at great cost not only to tax payers, but to local communities as well, who were hoping against hope.

Many economists argue that a short sharp cut may be better than a drawn-out death. The short-term pain and upheaval may be considerable, they say, but the affected region is likely to get back onto its feet much faster.

To Corus's sacked workers and their families, this will be of little consolation, though.

What's the impact on the economy?

It may sound harsh, but the economic impact will be very localised.

Without a doubt, the areas where the plants will close down will be devastated, and highly specialised steel workers will find it difficult to find new jobs quickly.

But overall, UK manufacturing is actually in quite a good shape; the sector has just reported its 22nd consecutive month of growth.

There are unemployment blackspots, and Ebbw Vale and others will be added to the list, but overall unemployment is at a 25-year low and the total number of people in employment at a record high - despite a string of well-publicised mass redundancies.

UK job centres currently list more than 300,000 registered vacancies.

The simple fact is that to UK plc, manufacturing is not that important anymore.

Services now make up two-thirds of the UK economy, manufacturing supplies a mere one fifth.

During the past 10 years, the service sector has created two million jobs. And these are not low-paid jobs pulling pints in the local pub. Many are high-quality, well-paid jobs - with a better working environment than your average steel mill.