The announcement Tuesday of the loss of more than 1,400 U.K. jobs at Bombardier has revived a debate about economic nationalism.
The crux of the matter is this: was the British government right in seeking the best-value deal for taxpayers in awarding a £1.4 billion contract to build and maintain 1,200 train carriages on London’s Thameslink commuter rail service to a consortium led by Germany’s Siemens, or should it have opted for a less attractive alternative that would have guaranteed more British jobs?
At a time when austerity measures are biting hard, it’s likely the majority of taxpayers prefer the deal that offers the best value for money.
While sympathetic to the plight of workers who face the prospect of losing their livelihoods, most citizens already feeling the pinch probably would resent effectively subsidizing manufacturing that isn’t the most competitive.
On the other hand, European neighbors like France and Germany are ardent supporters of their manufacturing industries, which are fiercely protected. Couldn’t, or shouldn’t, the U.K. do the same?
Secretary of State for Transport Philip Hammond acknowledges the imbalance and suggests that in future the U.K. could do a better job of structuring procurement contracts to improve the chance of domestic bidders. But in this instance, the government is in a no-win situation.
Can the U.K. afford a policy of economic nationalism? After all, it is an island nation facing numerous fiscal challenges and whose clout on the international stage is open to discussion. For the U.K., the price of economic nationalism may be too high.
The crux of the matter is this: was the British government right in seeking the best-value deal for taxpayers in awarding a £1.4 billion contract to build and maintain 1,200 train carriages on London’s Thameslink commuter rail service to a consortium led by Germany’s Siemens, or should it have opted for a less attractive alternative that would have guaranteed more British jobs?
At a time when austerity measures are biting hard, it’s likely the majority of taxpayers prefer the deal that offers the best value for money.
On the other hand, European neighbors like France and Germany are ardent supporters of their manufacturing industries, which are fiercely protected. Couldn’t, or shouldn’t, the U.K. do the same?
Secretary of State for Transport Philip Hammond acknowledges the imbalance and suggests that in future the U.K. could do a better job of structuring procurement contracts to improve the chance of domestic bidders. But in this instance, the government is in a no-win situation.
Can the U.K. afford a policy of economic nationalism? After all, it is an island nation facing numerous fiscal challenges and whose clout on the international stage is open to discussion. For the U.K., the price of economic nationalism may be too high.
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