Friday, February 13, 2009

Our economy is heading for the buffers

This is the sort of thing we need to be protectionist about.

The Department for Transport chose Hitachi instead of a consortium involving Bombardier, which employs 2,200 people in Derby. Its factory has only enough orders to employ that number of staff until next year and may have to make redundancies.

Bombardier may have a base in Derby, but it is actually a Canadian company. Hitachi may assemble some bits and bobs in Britain, but is is a Japanese company - the point is that the bulk of the £7.5 billion will flow out of this country and be lost to our economy. And that's a big chunk to be giving away when ever penny is going to count over the next few years.

Lord Adonis, the Transport Minister, said that the figure of 12,500 jobs created or safeguarded included an assumption that each direct job created four more among suppliers. Asked whether the majority of the workforce making the trains would be in Britain, he said: “A substantial proportion of those jobs will be British.”

So that's 12,500 jobs "created or safeguarded" - but no guarantee that they are British jobs? In other words, Lord Adonis is feeling smug because he's ensured that thousands of Japanese workers will have jobs. This might make him feel very good about himself, but it won't do much for the people who actually vote for his party here (something his Lordship doesn't have to worry about too much).

Look, it's quite simple. You award the contract to an overseas supplier and their economy will benefit. It will be their employees who keep jobs, pay taxes and spend their cash in their local economy. Our employees will get made redundant, pay no tax, claim benefits and won't have the cash to spend in the local economy - resulting in even more job losses, less tax revenue and more benefits claimants.

The government might think they are saving a few million here and there by handing these sorts of contracts to foreign manufacturers, but in the grand scheme of things it will cost more - much much more than they are saving. Worse still, that's £7.5 billion we'll never see again.

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