Multiplier effect
By awarding the Thameslink trains contract to Siemens in Germany the general wellbeing of UK is diminished and that of Germany enhanced
- Published in Transport.
Siemens were awarded the £1.4bn contract to build new Thameslink trains
I have just received my January 2012 copy of Professional Engineering and read, with horror, the Government's decision to award the contract for the Thameslink Trains to Siemens in Germany. Have they never heard of the "Multiplier Effect".
If the contract was given to Derby, even if higher than the German quote, the money will effectively flow back to the Treasury through Income Tax, VAT and other taxes. As it flows through the economy, creating jobs for more people, more of the money is fed back so that the economy flourishes. By sending the work to Germany this feedback is lost and the general wellbeing of the U.K is diminished and that of Germany enhanced. This in turn puts a greater strain on Government and the people.
Ian King, New South Wales, Australia