Rail Manufacturing: Job Losses

Louise Haigh Excerpts

Tuesday 16th April 2024 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

(Urgent Question): To ask the Secretary of State for Transport if he will make a statement on steps being taken to prevent job losses in the UK’s rail manufacturing sector.

[The Minister of State, Department for Transport (Huw Merriman)]

Mr Speaker, before I start, may I thank you for having me up in your constituency of Chorley over the Easter holiday? I pass on my deepest condolences to you and your family for the loss of your father.

I thank the hon. Lady for her urgent question. I am responding on behalf of the Secretary of State, who will shortly be meeting the Alstom group chairman and chief executive to discuss a potential way forward. The Secretary of State will come to the House and make a statement at the appropriate time, noting the fact that they are sensitive commercial discussions.

As set out in the comprehensive open letter from the Secretary of State to the hon. Lady on 29 March, the Government are well aware that companies such as Alstom and Hitachi face short-term gaps in their order books. The letter set out clearly that these are complex problems to which there are not simple solutions, but the Government have been doing everything they can to support the workforce over many months, and continue to do so.

While Alstom is currently consulting its unions and employees on possible job losses, this must be a commercial decision for Alstom. The Government have been working with the company to explore options to enable it to continue manufacturing at its Derby site. We have convened a cross-Whitehall group to advise on how to support continued production at Derby and how best to support those workers who are at risk of redundancy. We have held similar discussions with Hitachi, both in correspondence and face to face. We remain keen to work with Hitachi as it looks for commercial solutions to guarantee the long-term sustainable future of its Newton Aycliffe site. Hitachi is not currently consulting on any changes to its workforce.

The fact remains that the market for passenger trains is a competitive one. The Department cannot guarantee orders for individual manufacturers. Trains are major assets with a lifetime of 35 to 40 years, so there will naturally be peaks and troughs in the procurement cycle. Nevertheless, we expect substantial continued demand for new trains. In recent months, London North Eastern Railway confirmed an order of 10 new tri-mode trains for the east coast main line. A tender for new trains for TransPennine Express was launched in December 2023.

In January this year, I wrote to train manufacturers to outline the pipeline of current and expected orders for new trains. That included details of current competitions for Northern, Southeastern, Chiltern and TransPennine Express, and an expected procurement by Great Western Railway. The contracts are worth an estimated £3.6 billion, with more than 2,000 vehicles to be procured over the coming years. In the meantime, we will continue to work with UK manufacturers, including Alstom and Hitachi, to ensure that there is a strong and sustainable future for the rail industry.

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[Louise Haigh]

May I add my personal condolences to you, Mr Speaker, for the loss of your great father? He was a fine man and a great champion for Warrington and for workers’ rights.

Britain’s rail manufacturing is in crisis. Two of our largest train manufacturers have warned that their very presence in this country is at risk. Alstom, in Derby, is staring down the barrel of 1,300 job losses, and Hitachi, in Newton Aycliffe, another 700. In their supply chains, it is more than 16,000 jobs. Alstom has been making trains in Derby for 147 years, but both Alstom and Hitachi are clear that their uncertain future is thanks to this Government’s inaction. Alstom’s managing director has said that “continued delay” in providing “certainty and clarity” from the Transport Secretary is to blame.

The fact is that the Secretary of State has known about this problem for months. I first raised Hitachi’s concerns with him in this House more than a year ago. Both manufacturers have said that the situation could be rectified by amending their order schedules for a small number of existing, privately financed trains, and we understand that the Transport Secretary has been privately promising them action on that for months. But crucial deadlines have been missed, avoidable job losses have already been made and local businesses have already been forced to close.

The Minister dismisses people’s livelihoods as “peaks and troughs”. In his letter to me of 29 March, the Transport Secretary, as usual, ducked all responsibility. He claimed that he has no influence over procurement contracts, yet his Department has varied contracts in the past. He claimed that this is nothing to do with his mismanagement of HS2, but both struggling manufacturers claim otherwise. He claimed that he is providing certainty for the industry, yet he is refusing to bring forward his long-delayed rail reforms, or set out a rolling stock strategy for the industry.

Britain was the country that created the railways, but that legacy is being trashed by a Conservative Government content to oversee its managed decline. Will the Minister and the Secretary of State finally take responsibility, put aside their ideological opposition to supporting British business, and finally step up for the people of Derby and Newton Aycliffe and for Britain’s railways?

[Huw Merriman]

The hon. Lady asks whether the Secretary of State will take responsibility and work on this matter. He is doing that right now. He is about to start a meeting with the chief executive and chairman. And that is not the first meeting: he has held eight meetings with Alstom and eight with Hitachi to find solutions. Our officials in the Department for Transport have worked incredibly hard, as has everybody in the whole Derby family—the train operator, the unions that I have met and the workforce. We are all rowing together to try to find a solution.

I have to say that it does not help to see this cause being used almost like a political football. As an example, I did not use the expression “peaks and troughs” when it came to dealing with individuals. I said that the procurement cycle leads to that. My words will be clear in Hansard, and I resent having them misinterpreted, because it impacts on people and their feelings. I find it quite irresponsible of the Opposition to do that.

Another example of getting the facts completely wrong is the continued mention of HS2. Let me be clear: the order for HS2 was for 54 trains. That order remains at 54 trains, because they were always for phase 1, which is going ahead. The schedule remains the same and the number of trains remains the same, so let us deal with the facts rather than the fiction and scaremongering that I hear so often.

When it comes to facts, let me say that three of the four train manufacturers we are proud to have in this country have been building their plant here since 2010, under this Conservative Government. No doubt they decided to do so because we have commissioned 8,000 new rolling stock vehicles since 2012. The average age of rolling stock was 21 years back in 2016; it is now under 17 years, because we are investing in rolling stock, and there will be more orders. None the less, it is a complex legal solution that requires sensible minds, and I am very proud that the Secretary of State is leading on that endeavour.