Train-building Industry

Debate between Baroness Burt of Solihull and Duncan Hames

Tuesday 12th July 2011 Westminster Hall

[Lorely Burt (Solihull) (LD)]

I shall preface my comments by saying that any job loss is a tragedy for the family of the person involved. The hon. Member for Derby North (Chris Williamson) made a point about the supply chain, which is hugely important. Every job lost in British manufacturing has a knock-on effect on three or four jobs in the supply chain.

I want to address three issues. First, did the UK make the best use of EU procurement rules? Secondly, I will speak about open competition because we must not lose sight of the fact that we do well on that in Europe. Thirdly, we must ask what we can do now and what the best way forward is.

Will the Minister tell us, if she can, who interpreted the EU procurement rules? Were the rules interpreted in a way that might inadvertently have favoured Siemens as opposed to Bombardier? Were the rules gold plated and was our interpretation of them too strict? Why did the procurement rules not take account of the socio-economic impact of the decision’s devastating results? I hope that the Business, Innovation and Skills Committee will conduct an inquiry into the matter. We were legally bound by the procurement rules established by the previous Government, and had we acted differently, we would have been open to legal challenge, although I take no pleasure whatsoever in saying that.

On open competition, the UK wins 17% of all EU contracts and comes second in Europe when it comes to winning European tenders. Protectionism is a harmful road down which to go for all countries in Europe.

[Duncan Hames]

My hon. Friend is right to make that point. Invensys Rail in my constituency produces world-class signalling technology and has worked on seven out of the eight most recent high-speed lines in Spain, and nine out of 12 of the metro lines in Beijing. When we have such exceptional engineering talent in our country that wins contracts abroad, some of us may wonder why we are not more successful at winning contracts at home.

[Lorely Burt]

My hon. Friend makes an excellent and important point that has also been raised by a several hon. Members. We must be savvier when setting procurement criteria. In Italy, specifications have been known to include the requirement that the same work has been done previously in the same area, although how it gets away with that I do not know. A study by Francesco Grillo concluded:

“In Britain, there are lower barriers to entry”

than elsewhere in the EU. We desperately need to look at that.

A balance must be struck, and there are some mitigating factors. Bombardier preannounced its intention to create 1,000 redundancies, regardless of the loss of the Thameslink bid. The growth review initiated by the Government will look at how business can be supported and at how UK manufacturing companies can meet our strategic needs, the importance of which was raised earlier. We must look at whether the UK makes the best use of our procurement strategy. On the bright side, the Business Secretary has announced a taskforce headed by Margaret Gildea OBE that will work with Bombardier to help to sustain a long-term manufacturing base in the UK—we are in this for the long term.

One or two hon. Members alluded to the fact that Bombardier is Canadian-owned rather than British-owned. Siemens will create 2,000 jobs as a result of being awarded the contract. Indeed, Bombardier has just won a £354 million contract to provide signalling for the London underground. It is therefore not all doom and gloom, but we must do everything possible in Derbyshire to help people to revitalise their manufacturing base.