Much has been made today of the Government’s decision to hand the production of the new post-Brexit blue passports to French company Gemalto ahead of British Company De La Rue.
I have dug in to this a little bit deeper and casting aside any notions of jingoism asked the big question – is the Government doing the best for us irrespective of any political interest?
Unfortunately, my conclusion is that not only are they making fools of us but the British company is not competing on a level playing field and here is the case for why.
Firstly, government contracts are tendered for and awarded on the best value for money. But our government does not base their judgement on the bigger picture which includes jobs for local people (cutting the benefits bill) and the knock on effect in terms of secondary jobs in the local economy based on spending of wages, just the initial cost of the project.
Our European neighbours factor this in to their calculations, meaning that firms in their own countries can put in a higher bid on their own contracts against UK companies and still win because public money is not just supporting the job in hand but additional benefits in the local community.
Secondly, De La Rue is a private company that generates its own funding and has to compete in an open market. But a very quick search online regarding Gemalto finds that they have been in receipt of French Government funding, backed by the EU, for research and development that props up their operations.
This is from their own website –
“Amsterdam, the Netherlands, May 23, 2008 – Gemalto (Euronext NL0000400653 GTO), the world leader in digital security, today announces that the European Commission has authorised the financial grant by the French government to the MaXSSIMM(*) development programme through OSEO. OSEO is a French public Agency which supports innovation and development. The programme, carried out by a Gemalto-led consortium, is intended to facilitate and accelerate the implementation of convenient personalised and secure Internet services for mobile devices. OSEO will contribute to the program through a €35-million subsidy over 3 years.”
So not only are our own government not looking at the bigger picture in terms of local jobs and regeneration, UK firms have to compete against EU competitors who are in receipt of EU authorised subsidies to prop up their operations.
The EU have been very vocal in their opposition to US based ‘protectionism’ by imposition of trade tariffs on subsidised steel (neglecting that their own tariffs in place at present are higher than those proposed by President Trump) – maybe it is time for the UK Government to look at allocating contracts based on the bigger picture and also looking at government subsidies allocated to those from overseas that not only disadvantage our own businesses but distort competitiveness against those who believe in real free trade.
Disclaimer: The content of this post reflects the views of the author, and not necessarily those of MBGA News.
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