Monday 28 September 2015

Supporting British jobs

There seem to be few people in Wales supporting the construction of the HS2 rail link, most of them preferring to argue that Wales should have its share of the money and use it for other purposes.  I disagree – not because I expect Wales to get any benefit from HS2 itself, but because, unless we are going to prevent people from travelling at all, the alternative to better and faster rail links is more runways and aeroplanes.  So I’d prefer to see Wales making the case for HS4 (we’ve already missed the boat for HS3 which is likely to serve Scotland) so that we become part of the high speed network rather than whinging on the side-lines.  And the only way that HS3 and HS4 will happen if they are treated as part of a UK network rather than seeing the three projects as entirely self-contained.
Where I find myself more in line with mainstream opinion in Wales is with the idea that infrastructure projects (of which HS2 is one) are a good way of boosting a flagging economy, and that investing in them can create economic growth and jobs, as well as boosting skills and knowledge in the economy.  It was in that context that I was astounded to see that on his trade mission to China, the Chancellor has urged Chinese firms to bid for construction contracts on the project.
‘Scope creep’ is one of those things which can all too easily happen on any project, but for it to lead to the mission becoming the opposite of the original intention is a rare achievement.  Osborne went to China to drum up business for British companies, with the stated aim of China becoming the second biggest customer for British companies.  There is currently a significant gap between the level of the UK's exports to China (at around £16.7 billion), and imports from China (t around £37.6 billion) - see Figure 2 here, so his aim of increasing UK exports to China is a wholly reasonable one.   But, instead of that, he’s ended up trying to drum up business for Chinese companies in the UK.  Even if the Chinese companies would employ local workers to carry out the work, the profits (and the tax on them) would still end up being syphoned out the UK economy rather than reinvested here.
It’s another take on being ‘business-friendly’ I suppose – it’s just other countries’ businesses that he’s supporting.

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