Protectionism rears its ugly head again

WHO would you buy £3.4bn worth of new trains from. Germany, a country synonymous with precision engineering and home to some of the world’s most prestigious car marques, like BMW, Porsche and Mercedes Benz? Or Britain, home of the Mini-Metro and Austin Allegro?

The answer seems obvious, yet the Department for Transport is under fire for awarding the contract to build a new fleet of Thameslink trains to Siemens. The German firm came up with the cheapest bid, and the one that met most of the specifications, meaning rival Canadian bidder Bombardier lost out.

As a result of losing the contract, Bombardier looks set to shut Britain’s last remaining train factory, putting at risk 6,000 jobs and sounding another death knell for UK manufacturing.

Predictably, an opportunistic Labour Party (which designed the tender process while in government) is calling for a review. Vince Cable, the business secretary, and Philip Hammond, the transport secretary whose own department selected Siemens, have also written to the Prime Minister with their concerns.

This kind of protectionism often rears its head when recession bites, and was in evidence at the weekend when Iain Duncan Smith, the welfare secretary, called on UK employers to give “our young people” a chance rather than employing immigrants.

Both the anger over the train contract and the argument being made by Duncan Smith miss the real point.

It is indeed depressing that the UK can’t rival the likes of Germany and Japan when it comes to high-tech manufacturing, nor Poland when it comes to productive lower-skilled workers. That doesn’t mean we should erect barriers and accept second-best, however. Instead, we must up our own game.