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Derby’s fury could provoke a sensible plan for UK industry | Julian Glover

The failure to give a key contract to our last train factory undermines what ministers say about rebalancing the economy

Danny Alexander and Vince Cable are in the wrong Midlands city: they should desert Birmingham and travel to Derby. First they should visit the city’s art gallery, where Joseph Wright’s luminous pictures of scientific and industrial revolution will fortify their resolve to reconstruct the British economy around something other than financial services. Then they should head to Bombardier’s Derby train factory, where they will find out why this task is so difficult.

In one of Wright’s wonderful pictures, The Alchemist in Search of the Philosopher’s Stone, a grey-haired man who could, if the business secretary could be persuaded to grow a beard, pass for Cable, kneels before a glass test tube, glowing with phosphorus, not the hoped-for gold. The moral is obvious. You can’t make money out of nothing just because you want to, even in the City of London and certainly not in manufacturing – which has suddenly found itself cherished by politicians, commentators and economists who not long ago forgot it existed.

When the last big train factory in Britain shut, in 2005, even this paper overlooked the loss. Yet Alstom’s Metro Cammell plant in Birmingham, which made most of London’s tube trains as well as the Virgin expresses that took Lib Dems to their conference, mattered as much as Bombardier’s Derby factory, whose threatened future is now creating a stir. The difference between them is the financial crash and the realisation that manufacturing is important – which only adds to Derby’s fury at the failure to give a contract for new Thameslink trains to Britain’s last train factory.

Like most things that attract sentiment, the story is more complex than easy outrage implies. But there is no doubting the contradiction between what ministers say about rebalancing the economy – the chief secretary’s speech yesterday offering another example – and what workers see happening. The Bombardier factory is busy making overground trains for London. But this order runs out in 2014, and after that there is nothing. The crucial contract for Thameslink – the first mainline train order in Britain for almost three years – has gone to Germany’s Siemens.

At a Unite fringe meeting last week I heard two Derby workers describe movingly the shock at the plant when this was announced. The city’s Tory-Lib Dem council has voted to fund the union’s legal challenge. Derby County players have appeared in pro-factory T-shirts; the prime minister had to answer twice on the subject in the Commons last week. In the meantime Bombardier has begun sacking workers with such speed that some doubt Thameslink trains would have saved them.

British factories still create jobs: a 2009 report suggests the economic output of the Derby manufacturing hub (led by Bombardier, Rolls-Royce and Toyota) is at least a third of the size of the London financial services sector (and without the need for bailouts). Including suppliers, manufacturing around Derby employs more than 40,000. So transport secretary Philip Hammond is right to be panicked by the unexpected attention the Thameslink decision is attracting. He is scrambling together a plan to offer Bombardier a new contract for Southern commuter trains, and for electric vehicles to be inserted into diesel CrossCountry trains to stop them burning fuel on sections of a route that have overhead power. If these come off, Bombardier in Derby would keep open its design centre – essential to stop the factory becoming a mere assembly plant – and could bid for the forthcoming Crossrail contract.

Some say that all this sepia-tinted fondness for manufacturing is misplaced. They point out that Canadian Bombardier is no more British and less European than Siemens. Perhaps what matters most is the railways’ ability to buy cheap, reliable trains. No one insists British Airways fly UK-made jets. One reason the Derby plant is in trouble is that some train operators – though not Transport for London – think Siemens just makes better vehicles.

Obsessing about one contract for one firm, which has anyway not gone out of its way to invest in its Derby plant, won’t revive the economy. But it might be a trigger for a sensible strategy for developing manufacturing and infrastructure to the national advantage.

The outlines of this are easy to see. The Derby plant lost out on Thameslink first because ministers in the last government followed feeble civil service advice on EU procurement rules and second because they bundled the financing of Thameslink trains up with the purchase. This meant Siemens – whose credit is rated A+ by Standard & Poor’s – trumped Bombardier at BB+. So we should play the EU game better, keep investing in things like new trains and borrow the money separately. In short, reverse the way things have been done for the last 20 years.

Or perhaps far longer. After all Joseph Wright of Derby – unique, for a British painter, in being identified with his city – never trusted London, or the metropolitan disdain of industry. That’s why most of his pictures hang in Derby, not London, away from the gaze of bankers and politicians, their conferences and their search for an economic philosopher’s stone. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds