Losing my Train of Thought

Ventilatorblues looks at the figures associated with the government giving the Thameslink contract to Germans. He argues the money would be better spent at home.

So the British government has decided to opt for Siemens, a fine German company, to manufacture a set of rolling stock for Thameslink after carefully considering all the options.

Theresa Villiers, one of the myriad ministers that we now have to valiantly fight for our interests, plumped for the master race and justified the decision by saying it offered the best value to taxpayers. I assume here that she was referring to German taxpayers but it got me thinking about how much money the British government has thrown down the swanny in an effort to save precious taxpayers’ gold.

If this contract had gone to Bombardier in Derby there would now be 1500 fewer people facing job losses. Let us assume for one moment that they cannot find any other employment and all end up on remuneration hunters stipend (or whatever the dole is called) now to make people feel less unemployed. Let us also assume that they all earned about the national average wage of £25,000.

Job seekers weekly provision entitlement is pretty much £70 a week. So 1500 times 70 is…ooooohh time for a napkin and a Djosser step pyramid of scribbling… £105,000/week of best value for the taxpayer. So in a year this will be £5,460,000 forked out to former employees of the ironhorse constructor.

These poor folk will also no longer pay income tax which – including National Insurance to help pay for the health care they won’t get when they can’t retire – is roughly 30% of gross income. So the commonwealth has lost £7500 per person in a year. 11,250,000 big ones. A nice lottery win or a whole bunch of second hand equipment for our brave boys getting to shot to pieces in Afghanistan to preserve a steady heroin supply.

Now let us also assume that these people have houses and pay council tax and that none of them live together. Average band C council tax is about £1100. £1,650,000. A year, remember. Perhaps half of them have families and working partners – so working tax credit will be upped. Now a family on £10,000 will get about £8000 per annum. So let us assume all their partners are part time dinner ladies and that £4000 will be required per family for the loss of the main income provider in 750 instances. £3,000,000 will need to be found to keep them in clover.

So far, on their job status alone, the government has racked up an annual cost of roughly £21,500,000. Now the average lifespan of a train – I’m guessing here but the slam-doors lasted for 60 years and nothing built now will survive that long – is 30 years. So over the course of the lifetime of the effect of this contract being awarded (this decision representing best value for the taxpayer) will be £635,000,000.

Now this was worth £2 billion to Siemens so let’s assume it would have been worth the same to Bombardier. Let us also assume that (say) half the supplies for this contract would have been purchased from UK contractors and VAT would have been paid on this so (very roughly) 20% of £1 billion is £200,000,000. Now for the coup de grace: if we assume that of this £2billion liberally distributed through the British economy from employers, importers and exporters and retailers etc. (10% was profit and that is taxed at 30%) that will be another £30,000,000.

So the total combined cost of this contract is £865,000,000 on top of the £2 billion of best value for the taxpayer that we are already getting.

And we stand a good chance of losing the last remaining manufacturer of railway stock in the UK save for part time volunteer real ale drinkers at the numerous steam heritage lines.

How much more were Bombardier charging? £1billion? Even then the contract would have only cost £100 million more. What the UK government has done, for all intents, is to look at one fatuous bottom line figure while completely ignoring the associated costs of ignoring the associated costs. The total, worked through, after the wash, cost of this decision will be 50% on top of the original contract.

So, back to my original ponderings…How many more times is this madness repeated? What is the total cost of all the capital expenditure projects of Her Majesty’s Government? And this wasn’t even a PPI masterclass of stupidity. This was a decision made by a new government conscious of its role in cutting wastage and saving money for the taxpayer and even they managed to throw cash away like it was going out of style.

How much did shutting down our coal and steel industry really cost in the 1980s? How many towns and cities were laid waste in an effort to save money only to see it thrown away in benefits and lost taxes? And how much money was wasted turning these industries into wholly useless behemoths decades earlier in the first place?

All over these terrible decisions lay the grubby hands of government, meddling in private affairs for public reasons and destroying our national economy because of political allegiance. Since 1945 the two main parties have run this country and run it into the ground each taking their turn to stick the knife into both the worker and entrepreneur. Each taking it in turn to believe that what the other does is ruinous and that no-one will buy what the other sells.

Our economy is now beholden to the financial services sector; are the subsidies to the banks any better or worse than those spewed forth to our old industrial sectors or any more cost effective than paying Germans to make our citizens unemployed? At least those industries made something; even if no-one wanted to buy it, we could still use the lumps of metal to knock some sense into our silly MPs. Now our financial sector only makes British money…what happens when no-one wants to buy that?



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