Evidence E- Labour calls for review of trains contract awarded to Siemens

Evidence E- Labour calls for review of trains contract awarded to Siemen

The Labour Party has added to pressure on David Cameron over the decision to award a £3bn train contract to Siemens of Germany.

The Shadow Business Secretary, John Denham, and his transport counterpart Maria Eagle, said awarding the Thameslink trains deal to Siemens rather than the Bombardier factory in Derby.

 “dealt a body-blow to British manufacturing”.

The decision could cost 20,000 jobs, including 6,000 people employed by Bombardier in the UK. Bombardier is reviewing its UK operations following Thameslink’s decision.

Eagle and Denham said: “At a time when economic growth remains weak, a threat to so

many cannot be allowed to happen unless all possible solutions are explored.”

They added that future train contracts, for Crossrail and HS2 projects, are likely to be

tilted in favour of the company producing the 1,200 Thameslink carriages.

Philip Hammond, Transport Secretary, and Vince Cable, Business Secretary, suggested

that other European countries protect their industrial interests when handing out

manufacturing contracts. However, they noted that EU rules require equal, transparent

and non-discriminatory treatment of bidders for government contracts.

Government industrial policy favouring protectionism is regulated against. EU guidelines

state explicitly that governments must not base contract awards on a bidder’s location or

nationality.

The Unite trade union said the UK should follow the example of Germany, where statebacked

Deutsche Bahn awarded a €6bn (£5.4bn) high-speed train contract to Siemens.

19/12/2012 Sim Harris Rail News interview

the contract is running years late the prototype trains should be running now

Siemens is having to run private sector money - a big ask for a company for in the eurozone - price of money is going up siemens has a better credit rating than Bombardier so it seems unlikely they will be able to do any better. The Government should have known they would of been criticised about this, their offer the price of the private sector contribution was lower - could raise money on the private market at a better rate because of their credit rating £500m pounds cheaper when the price of money is taken into consideration- can see why the Government has offered it to them 'we are the good boys of Europe' we follow these rules whilst other countries like France and Germany don't.  

The daily telegraph 21st Jan 2013

Fresh data from the Bundesbank show that Anglo-German trade in goods and services soared to €153bn in the first nine months of 2012, with both exports and imports booming at double-digit rates.

It is one of the fastest growing trade relationships in the developed world. France lagged behind at €150bn as trade stagnated, with the US at €149bn and China at €115bn.

David Marsh from the financial group OMFIF said the trade swing underlines a “sobering truth” that Germany’s fundamental interests are shifting away from the eurozone core as Berlin embraces the wider world. The EMU share of German trade has fallen from 46pc to 37pc since the launch of the euro, displaced by Asia, as well as Eastern Europe and the Anglo-sphere.

British goods exports to Germany rose 20pc over the first three quarters compared to a year earlier, despite the economic downturn. The surge was led by medical equipment, drugs, car components, and petroleum goods. The deficit with Germany narrowed slighty to €17bn, a sign that trade is becoming better-balanced.

Although rarely acclaimed, British suppliers and manufacturers are deeply integrated into the German industrial machine and enjoy the follow-through benefits of German exports to the rest of the world.