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Future of Rail Manufacturing
23 April 2024
Lead MP
Grahame Morris
Easington
Lab
Responding Minister
Huw Merriman
Tags
EconomyTaxationEmploymentTransportForeign AffairsBusiness & Trade
Word Count: 8969
Other Contributors: 7
At a Glance
Grahame Morris raised concerns about future of rail manufacturing in Westminster Hall. A government minister responded.
Key Requests to Government:
Why are the Government not protecting British rail manufacturing given the rising demand for new trains and environmental targets? The Minister should streamline procurement by directly purchasing trains, honour existing contracts, and establish an industrial strategy to prevent further job losses and ensure sustainable development in rail manufacturing.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The rail manufacturing industry in the UK employs over 30,000 people and contributes at least £1.8 billion annually to the economy. The situation is critical with potential job losses at Derby train manufacturer and possible redundancies at Hitachi's Newton Aycliffe facility as early as June this year due to delayed government action on contracts for new trains. Railways have been vital in the north-east of England, including the Stockton and Darlington railway inaugurated in 1825, which facilitated coal exports from Teesport. However, former coalfields face a job density disparity with only 57 jobs per 100 working-age residents compared to a national average of 73 jobs.
Alex Cunningham
Lab
Stockton North
Mr. Cunningham expressed concern over the potential managed decline of Britain's rail manufacturing sector, specifically highlighting Hitachi Rail's situation in Stockton North where a £110 million train manufacturing facility is at risk due to a lack of future contracts and Government action. He noted that the company has 750 skilled workers and supports 1,400 jobs but faces a production gap from March 2025 onwards. Hitachi Rail proposed additional work and hybridisation solutions for maintaining skills, which were declined by the UK government citing legal risks. The hon. Member for Stockton North (Alex Cunningham) intervened, agreeing with his colleague's view on balancing risk in procurement to prevent losing key skills such as those at Hitachi's Newton Aycliffe plant. Alex Cunningham intervened to invite the Minister to experience the poor train conditions on a journey from Darlington to Saltburn. He also requested an intervention, but the content was not provided in the transcript.
Gavin Newlands
SNP
Paisley and Renfrewshire North
The hon. Member for Paisley and Renfrewshire North (Gavin Newlands) expressed concern over the dysfunction of the rail system, particularly with regard to job threats in the rail industry and the impact of ROSCOs on rolling stock procurement. He highlighted historical parallels from a 1994 debate about similar issues affecting the rail manufacturing sector.
Iain Stewart
Con
Glasgow South
Rail rolling stock manufacturing in the UK has a bright future with significant new orders from HS2 and other rail operators. However, the industry currently faces short-term challenges due to fluctuations in procurement orders. The creation of Great British Railways offers an opportunity to create a long-term horizon for investment, but different parts of the industry need to work together to achieve this goal.
Kevan Jones
Lab
Durham North
Would my hon. Friend agree that the issue is not just the number of jobs 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. Mr. Kevan Jones congratulated his hon. Friend on securing the debate and highlighted the significance of Hitachi's investment in Newton Aycliffe, which supported 700 jobs and the local supply chain. He emphasised that this was a political decision as it relates to ensuring consistent orders for UK factories, including Newton Aycliffe, to maintain long-term supply chains and retain skills.
Paul Howell
Con
Sedgefield
Emphasised the historical importance of rail manufacturing in the north-east and praised Hitachi's role, noting its £3.6 billion-worth rolling stock orders, resilience in supply chains, and commitment to developing skills for the future.
Sam Tarry
Lab
Brent East
Sam Tarry expressed concern about the lack of long-term orders at rail manufacturers, highlighting that Alstom and Hitachi Rail dominate around 55% of the market. He pointed out the negative impact on jobs when contracts are given to foreign firms, citing a loss of over 12,000 jobs in the supply chain from Siemens winning a Thameslink contract. Tarry also mentioned ongoing redundancies at companies such as Hitachi Rail and Alstom with nearly 900 people employed on temporary contracts being particularly vulnerable.
Stephen Morgan
Lab
Portsmouth South
Stephen Morgan highlighted the crisis in rail manufacturing, mentioning 1,300 jobs at risk in Derby and 700 in Newton Aycliffe. He criticised the Government's lack of industrial strategy, which led to delays and uncertainty, causing skilled workers to leave for other industries and supply chain companies to go bust. He noted that without certainty and stability, the British rail sector could lose decades of expertise and face rising costs due to reduced competition.
Government Response
Huw Merriman
Government Response
With pleasure, Sir Gary. I start by thanking my hon. Friend the Member for Easington (Grahame Morris) for securing this important debate on the future of rail manufacturing and for his engaging and impassioned speech. Rail remains a top priority for the Government, connecting people to places and delivering goods while supporting jobs in communities. Since 2012, the Government have commissioned 8,000 new rolling-stock vehicles out of 15,600 total, encouraging four train manufacturers to set up shop in the UK. The average age of rolling stock has fallen from 21 years in 1970 to just under 17 years today, with improvements continuing. Private sector investment of around £20 billion transformed our train fleets for passengers. Despite revenue reduction post-covid pandemic, contracts worth over £3.6 billion are expected for new vehicles and refurbishment of existing fleets, including orders from Northern, Southeastern, TransPennine Express, and Chiltern. The minister disagrees with the claim that the Government has not acted quickly enough on potential job losses at Alstom and Hitachi, mentioning ongoing discussions to help the companies find solutions while ensuring value for passengers, taxpayers, and Governments. The Department remains keen to work closely with manufacturers like Hitachi to help them find a solution. Rail manufacturing's future focuses on exports, as it has to be, and the £44 billion five-year funding settlement for Network Rail's operations provides further opportunities for UK rail manufacturers and suppliers. The minister concludes by saying that working towards bringing track and train together through rail reform will support our fantastic rail and train manufacturers.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.