Siemens is as British as Bombardier

EU rules on jobs, as in the Thameslink train deal, are rightly observed – and let's forget about UK manufacturing anyway

 Bombadier workers at the Derby railway carriage factory, which has been hit by news that a Thameslink contract will go to Germany with the loss of up to 1,400 jobs. Photograph: Christopher Furlong/Getty Images

Ministerial gnashing of teeth over the Siemens/Thameslink train deal was inevitable. Why can't we favour British companies, Vince Cable and Philip Hammond ask the PM. Is it the last government's fault, Brussels bureaucrats or the sidelining of industrial policy under Margaret Thatcher?
In response to the "British first" lobby, some overburdened civil servant will explain how a carriage maker in Derby lost out to its German rival. Our Whitehall official could rightly argue that Britain is renowned for following EU rules to the letter and offering transparent contracts without as much of the corruption and skulduggery common on the continent. As a reward for walking this honourable path we get cheaper and more efficient services.
He or she could also point out that the pros and cons of the deal are more complex than might first appear.
While Siemens will make the trains in Germany, extra work will go to its 13 UK factories and especially a components facility in Hebburn, Tyne and Wear, adding 2,000 jobs to the current 16,000.
Bombardier, the Derby factory owner, is a foreign-owned business that, like Siemens, has become increasingly detached from its home country in the search for low-cost/low-tax opportunities to make money. Why back Bombardier over Siemens, which has an even bigger UK workforce?
Arguably, the outcome is just part of the ebb and flow of corporate contracts that creates winners and losers each day.
Yet there is a broader context. Thirty years of (non) industrial policy, a strong pound (until the banking crash) and a desperate need to procure goods and services at the cheapest rate has transported Britain further into the 21st century than probably any other nation.
While the US, Germany, Japan, France and Italy spend much of their time and money protecting older manufacturing and mining industries, Britain is a world-beating services centre. We play host to manufacturers, but we make most of our money doing other things.
The business secretary hopes to make a difference with his "Made in Britain" campaign. Everyone will wish him well. There is no doubt it is important to balance the economy with a thriving manufacturing base. Places like Derby have invested heavily in skills and equipment and deserve state support.
Yet that aid should be circumscribed because following other nations down the protectionist route would prove a costly folly. And persuading investors to back a bright new future of UK-owned and UK-based manufacturing is unlikely to get off the ground, at least not on the industrial scale we need to maintain our living standards. Cable is looking in the rearview mirror when he should also be looking forward.
A more coherent plan would be to support the export of business and creative services. It is a much better answer to the existential question so eloquently expressed by Spike Milligan when he asked in his surreal comedy Q: "What are we going to do now?"
An obsession with science and making stuff is fine and should be nurtured but our future must lie in selling services other countries cannot offer (they don't speak English) or where they are several years behind us.
In the dying days of Labour government, the former minister Alan Milburn wrote a large tome on social mobility, a subject he is also pursuing for the current administration. He called for more emphasis on business services and claimed more than 1m jobs could be created if the UK promoted its legal and accounting services, its business support industry and design firms, while opening up middle-class occupational safe havens.
Milburn saw investing in services as a way to recruit bright, energetic young people with no formal qualifications. Like McDonald's UK boss, Jill McDonald, who famously said it was time to drop hackneyed clichés that put all teenagers in hoodies and belittled their qualifications by calling them "dumbed down", Milburn wanted a wider acceptance among company directors that the future is not about recruiting from the same gene pool with diminishing returns.
More businesses need to train their workers, and their managers come to that, and not leave it to schools and colleges. Complaining about educational standards is hypocritical when firms participate so little in the process. Apeing other countries, such as by trying to out-manufacture them, is not the way to make our way. As the world becomes richer, a distinctively British way of providing business services will be a key selling point.
Source http://www.guardian.co.uk/