De la Rue & GKN – Too important to leave these shores
The 29th of March, was a significant Brexit milestone, that in one year’s time we’ll be leaving the EU. One of the primary reasons many of the millions, who voted leave in the 2016 referendum, was to regain control of our country and, in particular, the primacy of an elected UK government over a largely unelected European one.
Despite this, the government chose to award the contract to make UK passports to a French/Dutch company instead of British company, De La Rue, which has a factory in Gateshead’s Team Valley. Nothing about this makes any sense, either economically or politically. Home secretary, Amber Rudd, defends the tender decision on economic grounds, stating the French/Dutch bid was cheaper and she supports a global capitalist economy. While there is nothing intrinsically wrong with a global economy, when it comes to some things, a country like the UK needs to balance paper savings against the country’s economic and national security.
Amber Rudd is naive if she thinks that handing over something as important as the creation of passports to an overseas country does not risk mischief. The French are notorious at using industrial action to hold governments, institutions and the public to ransom, with little thought to the consequences. One only has to see the chaos that ensues when French Air traffic controllers strike. Think how much damage they could do this country by refusing to make our passports? Even if you don’t accept the security argument, the economic one doesn’t stand up anyway. The French bid was purported to be £50 million pounds lower. However, that is no guarantee it will turn out to be so. The government is hopeless at procurement oversight and that is why so many contracts end up costing more in the end. But what of the local economic impact or LM3? If the government buys British, then the money is invested locally. HMRC will also receive corporation tax, along with income tax and NI from the staff wages and won’t have to fork out unemployment benefits to any redundant staff. As such, there are more than enough grounds, both economic and security based, to challenge this passport tender and I sincerely hope De La Rue do so.
April the first, marked another important date; namely the 100th anniversary of the formation of the RAF. A timely reminder that the world has never been more unpredictable or at risk of another global conflict. Right now, the west is squaring up to an aggressive Russia, Islamic terrorism is growing ever higher and unstable regimes, such as North Korea and Iran, are close to acquiring nuclear weapons. Therefore, given the numerous and differing threats posed to us, it has never been more important to ensure we have a strong and capable military. However, a country’s military capability is only as good as the personnel and equipment at its disposal. For example, few would disagree that if it wasn’t for the RAF, and the Spitfire in particular, we may well have lost the Battle of Britain and even the Second World War. Perhaps then, a stark reminder of the sheer and incomprehensible folly that the 250 year old British engineering giant GKN, the manufacturer of the Spitfire, may well be sold to corporate asset strippers Melrose, who have made no secret of their intention to maximise financial gain from the acquisition.
So what, you might say, that’s capitalism. So it is, but like the passports, there are some industries that are vital to national security and the company that makes our military equipment is one of them.
The security of the west is based upon the military strength of NATO, of which the majority of its fighting capability comes from the UK and America. GKN supplies a large number of key equipment and components for both the US and UK military. It is highly plausible that if GKN is acquired by the likes of Melrose, at some point, it could end up being owned by a company based in a country, whose leaders may not share the same military objectives that Britain and her allies do. To try and illustrate this hypothetically, imagine if GKN had been sold, by asset strippers, to a German company in 1935? Somehow, I don’t think the RAF would have been supplied very many Spitfires in 1940. This is why, I believe, Business Secretary, Greg Clark, is wrong not to step in and block this sale on grounds of national security. Frankly, the pitiful and empty promises from Melrose are as worthless of those given by Kraft prior to their takeover of Cadbury. The fact Clark is even using them as reassurance is laughably embarrassing.
Seems the survival of GKN, maybe even the security of NATO itself, now lies with defence secretary, Gavin Williamson. Let’s hope he’s got more grit than his gutless cabinet colleague.
This article first appeared in the Newcastle Journal newspaper 5 April 2018