Massive Government contract falls through...?

Transport Secretary Andrew Adonis has just announced that the Government has put the brakes on a £7.5bn train building contract.

The decision was taken, Adonis said, for two reasons – though Lobbydog suspects one is more pertinent than the other.

They say the rail network’s needs have changed after passenger growth slowed and further sections of track were electrified, meaning that a different type of engine than those ordered would be needed.

You’d think they would have known about the electrification programme when they ordered billions of pounds worth of diesel carriages.

Then, crucially, they say that there was a “reduction in capacity of the debt market” – suggesting the Government may not have been able to borrow cash to fund the project.

Did the banks think we weren’t good for the money?

The deal definitely won’t be signed before the next election – and then we’ll have to wait for the results of a review to see if it ever does.

Lord Adonis misquotes

I always thought Lord Adonis didn’t have much of the Machiavelli about him.

He seems a little more principled than most senior politicians and a little more interested in his ministerial brief than his career.

Last night while giving a speech on trains he said: “I think it was Sir Thomas More who said treason is just a matter of dates.”

Actually it wasn’t. Sir Thomas More was beheaded in 1535 after refusing out of principle to sign the Act of Supremacy, which enshrined England’s split from the Catholic Church.

The line Adonis quoted was actually made by Charles Maurice de Talleyrand-Périgord.

Known simply as Talleyrand, he was a diplomat and politician so versatile that he managed to work under the King of France, for leaders during the French Revolution and for Napoleon.

I wonder whether Adonis will be a More who dies for his principles or a Talleyrand who lives for his work.

The real story behind "12,500" jobs

Today's announcement that a contract to build super trains would "create or secure 12,500" UK jobs is at best botched, and at worst cynical.

The very fact that they put "create or secure" in front of the number immediately rang alarm bells in my head.

After speaking to Agility Trains chief exec Alistair Dormer, Lord Adonis and Geoff Hoon this is what I've sussed out.

There will be 200 to 500 definite jobs at a factory to be opened in the UK by Hitachi.

Supposedly there will be a further 2,000 definite jobs.

But there is only an absolute guarantee of 1,300 of those – as positions to maintain the train cars – being UK based.

Transport Minister Lord Adonis said he couldn’t yet say where these 1,300 or the remaining 700 of the 2,000 – at other UK depots and in the supply chain – would be spread.

Hoon admitted the remaining “10,000” jobs – made up of new positions in the national supply chain brought about by the contract and existing ones “secured” – was merely an “estimate”.

Here is the killer – the estimate was in part put forward by Agility as part of its bid to win the contract. Of course the firm would paint its bid in a positive light.

The real job numbers will depend on how much Hitachi, which has an already established global supply chain, eventually relies on the UK supply chain.

But it has no legal obligation to use any British suppliers – in fact it would be illegal under EU law for Hitachi to specify suppliers at this point.

If the Department for Transport had said “this will create 500 UK jobs” in the first instance, that would be something close to a solid story.

But by throwing this purely speculative 12,500 figure out there, they undermine any good news there is at the root of it.