Rail Manufacturing: Job Losses

(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.

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.

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?

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.

I call the Chair of the Transport Committee.

I am pleased that the Secretary of State and the Minister are taking charge of negotiations with Alstom, Hitachi and others. I appreciate that as commercially sensitive discussions are ongoing, the Minister is constrained in what he can say, but they need to be resolved soon. The wider issue is the peaks and troughs not just in rolling stock procurement, but in railway industry investment more generally. How does the Minister believe Great British Railways and wider rail reform will help to smooth out the peaks and troughs in the longer term?

I thank the Chair of the Select Committee for his work. The Committee as a whole has looked at this issue and really probed for solutions. On the GBR point, it is also providing the body of pre-legislative scrutiny of rail reform, and I thank my hon. Friend and his Committee for their work in that endeavour. He is absolutely right that a more holistic approach to the railway, in which track and train are integrated, will help us to make further decisions into the future and give more certainty with regard to orders. None the less, I have set out the orders that have been taken over the preceding years. The order book is healthy and we will look to get the tenders out this year and next for the train operators that I have mentioned.

I call the SNP spokesperson.

My condolences to you and your family, Mr Speaker, on the loss of your father.

Clearly, the news coming out of Derby about the precarious nature of Alstom is grim, not just for the workers and the wider economy of Derby, but for everyone involved in the supply chain across the country, including 24,000 rail supply jobs in Scotland. The fact is that this was predicted; we have all known about it for months. These are skilled, well-paying jobs of the type that we are continually told the UK is in the market for.

Does the Minister accept that the stop-start procurement of new rolling stock is a direct result of the fragmented and disconnected railway system that has placed financialisaton and the Treasury’s miserly attitude to investment above rail’s key role in a decarbonised 21st-century society? Why are rolling stock leasing companies ruling the roost rather than straightforward procurement? How is it possible that the island that invented the modern railway—the 200th anniversary of the Stockton and Darlington railway is next year—could have next to zero train production capacity within a matter of months? We need a proper rail strategy and integration; when will that rail reform be put before the House?

Again, let us look at the facts. Since 2012, 8,000 new rolling stock vehicles have been manufactured—that is out of a total fleet of 15,600, so it is a relatively young fleet. Taking into account the fact that the fleet tends to last 35 to 40 years, and that it now has an average of 17 years’ service, I hope that the hon. Gentleman will see that there has been a substantial investment in rolling stock from the Government—the UK taxpayer—and from private train operators.

The hon. Gentleman asks when the legislation for rail reform will be brought forward. I am very keen for that to happen, and it is on its journey right now. The Transport Committee, of which he is a leading member, is providing the pre-legislative scrutiny. I very much hope that the Committee will finish its work in time for the summer recess, giving us two months to respond, and that there will be cross-party support in both Houses for what is I believe is sensible legislation that will allow us to deliver rail reform.

Although Labour is playing party politics on this issue, it is really important for Derby and Derbyshire, including for the workers at Alstom and in the supply chain that feeds into it. Will the Minister confirm that Conservative Members of Parliament have been working with the Secretary of State over the whole period, and that he has been working with Alstom for many, many months to get this right?

I thank my hon. Friends the Members for Mid Derbyshire (Mrs Latham) and for Derby North (Amanda Solloway) for the amount of work that they have put in to press us, privately but firmly, to ensure that we are working on this issue, given their concern as constituency MPs. I could not credit them enough for the amount of work that has gone in on their side, and for doing it sensibly—and that includes those in Derby council, to whom we are grateful. I believe that this is the way to approach the matter. The number of meetings that we have had, the cross-departmental taskforce that is in place and the sheer number of hours that the officials have put in have all led us to a point where we very much hope to be able to provide a solution. The matter is complex—there are legal challenges and these types of contracts often end up in litigation, so we have to be careful with the process—but we are keen to find that solution. I thank my hon. Friends for their work.

I was disappointed and sorry to hear what the hon. Member for Mid Derbyshire (Mrs Latham) just said, because, as she knows perfectly well, there has been a substantial amount of cross-party working on this issue over many months and years. Given that the factory is in my constituency, I find it a little disappointing that, although I am told that there have been many meetings between the Secretary of State and local Conservative members, at no point have he or his office chosen to involve me.

However, that does not matter at all; what really matters—and what I find most difficult about this whole issue—is that, over the years that I have been in this House, we have had so many of these conversations about failing industries. We ask what are the prospects for the future, and there is a struggle and, as always, an argument between those who want to look to the long term and those who want short-term financial savings. This is not an industry in which that is the problem. In the longer term, there will be millions of pounds’ worth of orders for rolling stock, because rolling stock renewal is needed right across the country, as everybody in the rail industry is aware. It is an industry with prospects and an ongoing, realistic vision of secure, high-value and high-reward jobs, yet one in which Government inaction is, I am afraid, putting those jobs at risk, particularly, as was said moments ago on both sides of the House, in the supply chain.

I thank the right hon. Member for the points she has raised. The discussions have been cross-party: the leader of Derby council has worked very closely with the Department to try to broker a solution. I will take away her point about meetings; I do not have that information to hand, but I will ensure she gets the meeting she has asked for.

The point I was making was that the comments from the Labour Front Bench do not help matters at all. This is a sensitive, commercially and legally challenging situation that we are trying to find a way through. We cannot find contracts just for one train manufacturer: we have four, and it has to be an open process, otherwise the matter ends up in court. Despite that, we are doing everything we can to find the right orders for those train manufacturers. As well as the letter I have written to all of the manufacturers, specifying the tender pipeline that is to come, the Secretary of State has written to all the entities that finance train operators, making the point that they should bring forward matters that they can see. That will help with refurbishment, as well as new rolling stock.

I thank the Rail Minister for the huge levels of rail investment going into my constituency. As he knows, alongside my hon. Friends the Members for Dewsbury (Mark Eastwood) and for Penistone and Stocksbridge (Miriam Cates), we secured £48 million of levelling-up cash for upgrades on the Penistone line, with stations at Honley and Brockholes in my constituency. I thank the Rail Minister for visiting Huddersfield railway station last year, and I am pleased to report that a major upgrade, which is part of the £11 billion trans-Pennine route upgrade, is under way at that station. Once that is complete, there will be major upgrades to Slaithwaite and Marsden stations, including disabled access. Rail investment is being delivered to my wonderful part of West Yorkshire.

I thank my hon. Friend; he is a champion of the railway, and it was an absolute delight to visit him at Huddersfield station and talk about some of those projects. Of course, his point is completely relevant to the matter before us. The trans-Pennine route upgrade, for which there will be more Government investment than there was for the entirety of Crossrail, allows us to put an order in for TransPennine Express trains, so there will be more trains manufactured as well as better stations, longer platforms and more resilience. [Interruption.] I thank that team, which is doing a brilliant job, which The Sunday Times has highlighted. Rather than chuntering, it would be nice if the Opposition thanked those who deliver railway projects to time and on budget.

My condolences on your loss, Mr Speaker. I thank you on behalf of the workforce for granting this urgent question, because the situation is becoming critical.

My union, Unite, tells me that there are over 900 people employed on temporary contracts at Hitachi in Newton Aycliffe and at Alstom in Derby whose jobs are already at risk. This is before any formal redundancies occur; Unite believes that that could happen as soon as June. I am well aware that the Minister knows that the industry needs a steady stream of orders to sustain train manufacturing here in the UK and preserve those vital jobs in areas such as County Durham, where we do not have an abundance of skilled employment, so in all honesty I earnestly ask the Minister to use his good offices to persuade the Secretary of State to intervene urgently and ensure a bright future for this vital UK train manufacturing industry.