The end of the line for UK rail production?
“We want the words ‘Made in Britain,’ ‘Created in Britain,’ ‘Designed in Britain,’ ‘Invented in Britain,’ to drive our nation forward. A Britain carried aloft by the march of the makers. That is how we will create jobs and support families” – George Osborne, Budget Statement, March 2011
Bombardier Transportation, part of the French-Canadian global manufacturing group, is the last remaining train manufacturer in the UK and the heart of a rail engineering and production supply chain which constitutes one of the largest manufacturing clusters in Europe. It employs 2,600 workers at its main plant in Derby, and more in its production centres in Crewe and Plymouth. It builds trains for London Underground, UK rail and overseas markets. It has formed groundbreaking learning agreements with its unions.
You would think that this is exactly the sort of company that will spearhead the government’s drive to rebalance the economy towards production industries and export-led growth. Well, think again.
Today Teresa Villiers announced that the £6bn contract to build new trains for Thameslink would be awarded to the rival bidders from Germany, Siemens. The government stressed the benefits to commuters and taxpayers, as well as pointing to hundreds of new construction and maintenance jobs arising from Siemens depots in the UK.
What they didn’t mention was that this has dealt a damaging body blow to rail manufacturing in the UK. This contract would have plugged a gap in Bombardier’s order books, securing the future of this industry in Derby and providing a platform the company to grow and bid for future work, not least for Crossrail.
This decision has thrown the company’s UK future into doubt. The maintenance jobs created by Siemens will be dwarfed by the potential job losses at Bombardier and its suppliers around the Derby area. Not just that but once again we will be losing vital skills and experience from our manufacturing sector.
While manufacturing is clawing its way back in recent months, our economic recovery still depends on companies like Bombardier winning crucial contracts such as this. So it is astonishing that the government would turn its back on UK manufacturing in this way, at a time when growth is weak and unemployment remains high. The Chancellor’s warm words in his budget statement sound hollow today.
The TUC has long campaigned for the government to adopt a more proactive approach in ensuring that UK businesses benefit from public contracts for goods and services. While recognising that the UK must maintain its commitment to open competition and EU regulations, the TUC has argued that more can be done by government to level the playing field and work with businesses to build their capacity to put in effective bids for contracts.
Using public procurement in this way should form an essential component of our industrial strategy, just as it does in Europe and elsewhere.
And this isn’t about gifts from the taxpayer to failing industries. Bombardier is a successful business producing high quality products. It supports high quality an engineering supply chain. When Teresa Villiers talks of “best value for the taxpayer”, has she factored in the long term damage inflicted on a key part of our manufacturing sector by this decision? Has she factored in the detrimental impacts of job losses and business closures?
Real value to the UK taxpayer would be to work in partnership with the likes of Bombardier to make sure they have the very best opportunity to win those contracts, creating employment and supporting the kind of industries that will boost the recovery.