Future of Rail Manufacturing

Debate between Kevan Jones and Grahame Morris

Tuesday 23rd April 2024 Westminster Hall

[Grahame Morris (Easington) (Lab)]

I beg to move,

That this House has considered the future of rail manufacturing.

It is a pleasure to serve under your chairmanship, Sir Gary. I must declare an interest as a member of Unite the Union and chair of the Unite parliamentary group. I am also a member of the RMT and ASLEF parliamentary groups and I am on the Transport Committee.

For several years, industry organisations such as the Railway Industry Association, trade unions and manufacturers have urged timely action to prevent significant job losses in rail manufacturing here in the UK. The industry employs over 30,000 people in the United Kingdom and contributes at least £1.8 billion annually in gross value added. It is currently facing a very dangerous—indeed, critical—situation. The Minister, a former Chair of the Transport Committee, is very familiar with the situation. I have engaged with him on a number of occasions recently and in the Select Committee, so I am fully aware that he understands the nature of the problem.

In December last year, I raised an urgent question following evidence given to the Transport Committee by Nick Crossfield, the managing director of Alstom—Alstom is based in Derby. He impressed on the Committee the need for urgent action from the Government to expedite the bidding process for new British-manufactured trains. Four months later, it is clear that the Government have been too slow to prevent potential job losses at the Derby train manufacturer.

Similarly, I met workers at the Hitachi train manufacturing facility in Newton Aycliffe, next door to my constituency, who are also members of Unite the Union. They warned that we could see redundancies as early as June this year if the Government continue to drag their heels on extending the contract to build further trains for the west coast main line.

British railways are rooted in the north-east of England. The Stockton and Darlington railway was inaugurated in 1825 and was the world’s first passenger railway. It also linked the coalmines near Shildon in County Durham to the River Tees at Stockton, facilitating coal exports from Teesport. The Stockton and Darlington railway’s success, alongside growing demand for transport, spurred the development of a national railway network. The railways transformed Britain, enabling all social classes to travel further, and the network was developed to move coal from thriving collieries in County Durham to global markets. However, County Durham continues to struggle with the legacy of the loss of its coal industry, with limited skilled employment due to insufficient investment in levelling-up efforts, alongside a lack of a coherent industrial strategy under successive Conservative Governments.

In 2015, Hitachi opened a plant in County Durham, bringing skilled jobs to the region and reviving the north-east’s rail manufacturing tradition after 90 years. The 750 skilled jobs at Hitachi, and about 1,500 jobs in the supply chain, are fundamental to the success of the local economy.

Today, the excellent Sheffield Hallam University has released its “State of the Coalfields 2024” report, which shows evidence of a lack of jobs and businesses in the former coalfields despite recent growth. Job density in former coalfields is only 57 employee jobs per 100 working-age residents; that compares with a national average of 73 jobs per 100 residents, and an average in major regional cities of 88 jobs per 100 residents. There is a disparity, and a long way to go.

The report from Sheffield Hallam illustrates, as clear as day, the ongoing struggle for prosperity in former coalfield communities.

[Mr Kevan Jones (North Durham) (Lab)]

Would my hon. Friend agree that the issue is not just the number of jobs that Hitachi has brought to the region but the improvement in the skill base? Hitachi is training apprentices and increasing the skill base locally through investments in higher education and other things. That helps not only Hitachi but the regional economy.

[Grahame Morris]

Absolutely. My right hon. Friend makes an excellent point about the broader benefits to the economy. Indeed, the loss of rail manufacturing in County Durham or Derbyshire would devastate their respective regional economies and threaten British rail manufacturing.

Alstom, Hitachi, Siemens and CAF—Construcciones y Auxiliar de Ferrocarriles—remain the only train manufacturers in the UK. A similar situation arose with the steel industry. To a reasonable person, it would seem illogical for the Government to permit the UK to lose its capacity to build trains, especially as our existing network is in need of modernisation.

The Minister and I have fenced about the age of the rolling stock and trains, but the UK still operates trains built before privatisation, with the average age of trains on the Chiltern line estimated to be 30 years; that was in March last year, from the Office of Rail and Road report. Additionally, nearly half all operators use trains over 22 years old. The Railway Industry Association has urged the Government to upgrade or replace approximately 2,600 vehicles by 2030, and to renew around 1,650 diesel trains that will be 35 years old after 2030.

The industry-wide consensus is that our rolling stock is outdated and inefficient. Therefore, my question to the Minister is: why are the Government not protecting British rail manufacturing, especially given the rising demand for new trains to enhance the passenger experience and to meet our net zero targets? In relation to our environmental targets, all 2,898 diesel and 912 bi-mode trains in the UK emit carbon dioxide and nitrogen oxides, with nitrous oxide—N₂O—having various health impacts and being up to 280 times more potent than CO₂ in warming the planet over a 20-year period. That is according to the latest Intergovernmental Panel on Climate Change report to the United Nations.

To achieve net zero by 2050, a solution must be found to replace diesel trains, which are currently used by 14 operators—especially since only 38% of the network is currently electrified. My constituents, who travel on unreliable, second-hand ScotRail Sprinter trains—no offence to my friend from Scotland, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands)—built in the 1980s, find it inconceivable that the rolling stock companies’ profits are sky high while our UK-based rail manufacturers are crying out for orders. Taxpayers are forced to travel on substandard trains purchased with Government funds, while subsidies remain at twice pre-pandemic levels. The system is inefficient and does not serve the taxpayer or the travelling public.

There are needless links in the chain. The Government should streamline the system by directly purchasing trains and bypassing the ROSCOs or rolling stock companies. Indeed, RMT president Alex Gordon and general secretary Mick Lynch have been vociferous, voicing concerns about leasing costs, which have risen by over 30% over the past five years while rail industry staff costs have remained static.

A decade ago, leasing rolling stock accounted for about 13% of train operating companies’ costs; today, it accounts for 25% or a quarter. Does the Minister think that is fair or are the Government protecting profits when other areas of the network, including the staffing elements, are facing dramatic cuts?

Clearly, there is something wrong with how we procure rolling stock in Britain. Despite needing modern, carbon-neutral and sustainable trains, the Government have ignored warnings from both Alstom and Hitachi. The Rail Industry Association warned the Government that recent administrations have been a “canary in the coalmine” before the potential decimation of train manufacturing in the United Kingdom. Unite the Union warns that the industry’s performance relies heavily on Alstom Transport and Hitachi Rail, which hold 55.3% of market share.

The industry’s fate is dependent on key players like Hitachi and Alstom. However, recent forecasts indicate a bleak outlook, with revenues projected to decline at a rate of 8.1% annually over the next five years. Hitachi and Alstom face challenges, as their order books require clearing past orders before they can commence construction and setting up production lines for the HS2 trains, which are currently 18 to 24 months behind schedule.

Government intervention must go beyond rhetoric to provide tangible support to the industry. We are not asking for a bail-out—just a commitment to honouring existing contracts, and to establish a sensible industrial strategy for the industry. Beyond extending existing contracts, a focused industrial strategy is imperative. Research conducted by Make UK reveals that 99% of manufacturers support the need for an industrial strategy. Six in 10 cite the lack of an industrial strategy as a factor affecting growth in the manufacturing industry. Some 87% believe a strategy would provide their businesses with a better long-term vision on which to decide investment in future employment plans. To prevent another Alstom or Hitachi scenario, we must reassure the industry that the Government are prioritising its interests. I am hopeful that the Minister is going to give us some positive news, but the consequences of inaction are dire. Jobs and livelihoods are at risk, and it is time now for some decisive action.

The industry requires a steady stream of orders to sustain manufacturing and maintenance bases, alongside a proactive approach to replacing retiring engineers. We must abandon costly leasing, opting for direct purchases through Government procurement to bolster UK train manufacturing, which must be central to a long-term rail and industrial strategy, driving economic growth, innovation, and meeting our future transport needs.

Draft Electric Vehicles (Smart Charge Points) Regulations 2021

Debate between Kevan Jones and Grahame Morris

Wednesday 8th December 2021 General Committees

[Mr Jones]

I would not challenge your ruling, Mr Robertson, but the point is that it is the smart technology that allows people to get different tariffs and cheaper rates, and the people I am talking about will be at a disadvantage.

The hon. Member for Cheadle makes a good point, which I would support; I would have no problem with what she suggests. But again, will people have to drive and leave their car overnight at a community charging point in order to get the cheaper rates from that smart meter, rather than having access to them? I doubt whether they will do that, because there would be security issues in relation to the vehicle and things like that. However, the initiative that the hon. Lady suggests is a good one.

Before I go on to security, I will talk about wi-fi, because it is a related issue in terms of smart technology. The explanatory memorandum says:

“Charge points will rely on a network connection to meet the smart requirements within the legislation, for example using Wi-Fi.”

That is great—if people have access to wi-fi. As my hon. Friend the Member for Wythenshawe and Sale East said from the Front Bench, it is patchy, to say the least, in some areas and certainly in rural communities. If we are not careful, it will mean that parts of the country, especially rural communities—I know certain parts of my constituency where wi-fi connection is not good at the best of times—might be disadvantaged, because they will not be able to connect their smart meter to the wi-fi network.

It is okay to agree on the regulations, and I will come to electricity grids in a minute, but there has to be a holistic approach to how things will work. I accept that if someone does not have access to wi-fi or the coverage is intermittent, the meter will still work—that is what the regulations say—but some people will be put at a disadvantage. Again, that needs to be thought about.

I turn to cyber-security. I accept that the regulations say that cyber-security needs to be taken into consideration, but I have a direct question for the Minister. Who is monitoring the components that are going into the smart technology? Following Huawei’s involvement in the telephone network, we found that there could be—I know there is a lot of nonsense said about it—an issue with cyber-security because of the components. I would like to understand who is monitoring the components going into the smart meters, because otherwise we could open up our networks to potential cyber-attack.

I would also be interested to know what the market is, because one of the issues around Huawei was that the Chinese had come to dominate the market over successive years, as Huawei and two other companies were providing part of the technology. Do we have robust enough components and smart metering companies providing the technology, to ensure that there is a real market in which the consumer has choice, which obviously gets cost down, and, more importantly, that there is investment in technology and cyber-security?

The regulations say that the Department for Digital, Culture, Media and Sport looked at this issue. I would be interested know whether the components and structure of smart meters have been looked at by the National Cyber Security Centre to ensure that not only the components but the technology and how it works are as robust as possible. That could lead to a vulnerability: if someone got into a network and could close things down or disrupt them in some way, that could have a devastating effect like we have seen recently in the United States, where there was cyber-hacking of the petrol network that supplies fuel. The principle is the same. There, the hackers got in and stopped the pumping of petrol through pipelines. An equivalent of that would be if someone could get into the network and disrupt charging points. Their maintenance and ensuring that the components are safe will be very important for the future; otherwise there could be vulnerabilities, which would be an issue.

Finally, I want to talk about the resilience of the network. As my hon. Friend the Member for Wythenshawe and Sale East said, it is fine to have electric vehicles and charging points, but it is no good having an electricity grid that is not robust, as we have seen in parts of the north-east in the last few days. People did not have electricity for 10 days, with some even experiencing their 11th or 12th day without electricity. Again, this is important, and I would like to understand how the issue will be linked to the urgent need to look at the resilience of the electricity grid system, as I have called for this week.

I do not oppose electric vehicles, but we need to get realistic about how quickly this will happen and how safe it will be. More importantly, we should not end up with a two-tier system whereby only some consumers have access to cheap electricity for charging.

[Grahame Morris (Easington) (Lab)]

I want to briefly raise an important point about that disparity, particularly in relation to people who are less well off. My understanding is that VAT is applied to electricity drawn from community charging points at a rate of 20%, whereas if someone is fortunate enough to have a charging point on their drive, VAT is payable at only 5%. That makes a massive difference. I stand to be corrected, and I look to the Minister for guidance. It is an issue that should be of concern to us all.

[Mr Jones]

My hon. Friend raises a very good point. If that is the case, it is another example of a market where those who can afford least will pay more. That cannot be right. In the gallop towards the nirvana of net zero that the Government are trying to achieve, we cannot create situation where markets will be fixed so that those who can least afford to pay will pay more. Our considerations should not be just about charging points but the whole issue—network security, affordability and some practical issues about where these charging points will work and where they will not.

Rail Services: North-East England

Debate between Kevan Jones and Grahame Morris

Tuesday 4th February 2020 Commons Chamber

[Mr Jones]

I agree with the hon. Member. Chester-le-Street in my constituency is a commuter town for Teesside and Tyneside, and it relies on good public transport.

The timetable got worse, and by January it had still not been fixed. Between 1 January 2020 and 24 January 2020, 17 TransPennine services were out of action. The managing director of TransPennine said that performance was “not up to scratch”, but I think some of my constituents would use more forceful language to describe it. The Department for Transport said that it was “completely unacceptable”, which again is a bit of an understatement.

[Grahame Morris (Easington) (Lab)]

I congratulate my hon. Friend on securing this important debate. He is absolutely correct. It is not just in North Durham but in my constituency that the services are a disgrace. The trains are often filthy and they often have only two carriages so people cannot get on to them. We were promised that the ancient Pacer trains would be replaced by Sprinter trains, but they are actually trains of the same age. How can we address the problem of the regional disparities and level up on transport infrastructure investment in rail services, given the terrible state of the services and the terrible record that we have to cope with at the moment?

[Mr Jones]

My hon. Friend makes a good point. We have seen a lot of promises recently about investment in transport infrastructure in the north, but there is a combination of two things here. It is about cash, but it is also about competence in running the network. Before we start opening up new lines, we need to ensure that the existing ones work properly. The franchising system in this country has clearly failed. His constituency, like mine, is next to two large conurbations, Tyneside and Teesside, and his constituents should be able to travel there easily. Again, if it was in the south-east of England, they would be able to do so.