How not to build a green economy
In London today the Chancellor put the inevitable positive spin on the flat GDP figures, telling us, “the economy’s growing”. But in Derby on Saturday a different story was told: up to 10,000 people marched in support of the Bombardier train workers, fighting to save the 1,400 jobs threatened by the Transport Minister’s decision to award a £1.5bn contract to Siemens. In our book, train making is part and parcel of the green economy, the low carbon growth alternative that is a casualty of coalition industrial policy mismanagement: train-making, solar power, homes insulation: the list is growing.
On homes insulation, 700 workers at Eaga lost their jobs earlier this year when funding for the Warm Front scheme for energy efficiency was cut by two-thirds and will end in 2013. It will be the first time in over 30 years the UK has been without a publicly funded energy efficiency programme. Its replacement, the private finance Green Deal, has been delayed. With the decline in the construction industry, commentators suggest there is a real danger that the fragile economic recovery will seriously undermine the skills base required for the Green Deal.
On solar power, DECC Ministers announced in March 70% cut in the feed-in tariffs for large scale solar power systems, over throwing the business plans of 350 solar companies. Many were already in difficulty following a destabilising and messy tariff review process. Thousands of jobs are at stake in this sector, whose early potential depends fundamentally on financial and legislative framework that only government can provide.
As the REA said, “The handling of this whole affair has been poor. Larger-scale PV has been demonised, when it is the most cost-effective approach. Midway through this decade we’re expecting its cost to be on a par with offshore wind.”
Speaking at the Derby rally, Unite’s assistant general secretary, Diana Holland, told the crowd: “This is a wake-up call for the government. It’s time to face facts and admit excluding Bombardier from the Thameslink contract is disastrous.” RMT General Secretary Bob Crow shared the platform with Bombardier’s UK chair, Colin Walton.
Four months ago David Cameron brought his “march of the makers” to Derby in a morale-boosting exercise for Britain’s blue-collar sector. Now Bombardier, the last remaining train maker in the UK, has announced plans to cut nearly half its workforce (cutting 1,429 staff: 446 full-time and 983 agency employees).
Last week, a report from Manchester University’s centre for research in socio-cultural change argued that it made “economic sense” to award the deal to Bombardier once benefits – including retaining local employment and skills, the tax revenues derived from British employment and the indirect effect on the rail engineering supply chain – are all considered. That evidence needs to be taken into account. But the Bombardier contract is not in the public domain because it has suited successive governments to have public procurement without the necessary public disclosure of contract terms and disclosure of the differences between each bid.
If civil servants were instructed, they could begin to construct a public choice argument about industrial policy which engaged with the specifics of the sectoral cases and the national economy. They could do this by introducing three relevant factors: first, the lost tax revenue from choosing a non-British factory; second, the British private sector’s inability to create extra jobs; third, employment in the upstream supply chain.
Here’s the question that the MU researchers ask: In the UK who is it that actually believes that the decision to award the contract to Siemens was a good idea?