Eurosceptic Hammond seeks way of giving UK manufacturers a better chance of winning UK government contracts
By Tim Montgomerie
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Last month the Canadian-owned train manufacturer Bombardier lost a tendering process to build 1,200 railway carriages for the Bedford to Brighton 'Thameslink' service. The winner of that bidding process was the German-based Siemens. Today it's been announced that 1,400 jobs will be lost at Bombardier's Derby factories - many of them hi-skilled engineering posts.
It is far from clear how many of the Derby jobs would have been saved even if Bombardier had won the Thameslink contract. It had been warning of job losses for some time because of the completion of a number of historical orders. This hasn't stopped Labour from saying that the Coalition should have reviewed the £1.4 billion Thameslink contract with a view to favouring Bombardier and its British workforce.
Interviewed on Today this morning the Transport Secretary, Philip Hammond, said that the terms of the initial contract had been set by the last Labour government in 2008 and there was no option but to award Siemens the contract given that it made the "highest value for money bid".
He did tell the BBC's Evan Davis that he wanted to look at whether similar contract processes could be rewritten in future so that successful bidders were, in some way, committed to the "domestic supply chain". Noting that French building contracts tend to be awarded to French manufacturers and German contracts to German manufacturers he promised to explore how British industry could be supported in future tender processes without compromising EU procurement laws.
Mr Hammond went on to say that he was a great believer in free trade but he also said that he believed in a "level playing field" and he asked aloud if Britain was playing by the same rules as other EU states. Eurosceptics have long believed that while Britain slavishly goldplates EU laws, observing them to the letter, other more supposedly communitaire EU states prioritise national economic interests.
It is interesting that Mr Hammond - one of the Cabinet's most Eurosceptic members - has written a letter to the PM, with the Europhile Vince Cable, setting out his views on reforming EU contracts. They write:
"We need to ensure that we manage our public procurement and investment programmes so as to sustain a competitive supply base that can meet the UK's strategic needs cost-effectively over the long term. There is a perception that other EU countries appear to manage their public procurement processes with a sharper focus on domestic supply chains than we have hitherto."
Read a PDF of the Cable/Hammond letter.
> Listen to Mr Hammond's full interview.