More than 1,400 jobs will be lost at Britain’s last train builder after the Government awarded a £1.5 billion contract for commuter trains to the German company Siemens.
The move, announced yesterday, is a major blow to British manufacturing.
Labour and unions representing the 3,000 workers at Bombardier’s Derby plant called on ministers to review the decision but Philip Hammond, the Transport Secretary, ruled out any hope of a U-turn.
The Prime Minister has asked Mr Hammond and Vince Cable, the Business Secretary, to review whether British jobs could be given preferential treatment in future procurement deals.
The review will also examine whether British officials interpret EU competition law more rigidly than other member states, putting British firms at a disadvantage.
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Chantal Hughes, European Commission spokeswoman for the single market, said: “It’s too easy to say that it’s because of EU rules that Bombardier lost out. It would be the wrong answer to conclude that, in public contracts, domestic suppliers should always be chosen.”
The rules were designed “to eliminate favouritism and backhand deals”, she said, adding: “The UK has benefited from these rules, allowing its companies to offer their services across Europe on an equal playing field.”
The contract for 1,200 new trains and carriages for the Bedford to Brighton Capital Connect line was awarded to Siemens last month. Most of the work will be carried out in Germany but 300 jobs will be created on Tyneside.
The decision came in the knowledge that the plant was running out of work. Four of the five production lines at the Canadian-owned factory are expected to be silent by the end of the year. Its contract for London Underground trains ends in 2014.
Colin Walton, chairman of Bombardier Transportation in the UK, said: “Obviously we are still trying to rationalise the reasons why [Bombardier failed to win the contract] and clearly it does seem to go against what we’re told about how manufacturing is important to the UK.”
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The Department for Transport let it be known that Siemens’ bid was “significantly better value”.
Tye Nosakhere, regional officer, of the GMB trade union, said: “This decision is the ultimate in stupidity. The Prime Minister has to call in this decision and start again. Losing 1,400 manufacturing jobs is a body blow for both Derby and the UK economy.”
Chris Williamson, Labour MP for Derby North, whose grandfather worked on carriages and wagons in the 1920s, said: “It is a family affair in Derby because so many people have worked or work in the railway industry. There is hardly anyone who doesn’t have some connection.” Another 13,000 people employed through the local supply chain were in danger of losing their jobs, he added.
A report for Derby City Council called Planes, Trains & Automobiles, in 2009, estimated that the rail sector contributes £2.6 billion of local economic output or 16.6 per cent of the city’s total output.
Jason Madeley, 33, a vehicle builder, whose father drove trains for 35 years, said: “We’d like to think this is a glitch . . . but it’s a big glitch. There are folk here who feel this could be the end of the line.” Alan Calladine, 53, a development officer at Midland Railway Centre, said: “Today marks the possible death knell of the railway industry in Derby, which has been important to the country since the 1800s.”