Exiting the EU and Transport

Debate between Andy McDonald and Baroness Winterton of Doncaster

Wednesday 23rd November 2016 Commons Chamber

[Dame Rosie Winterton (Doncaster Central) (Lab)]

As my hon. Friend the Member for Middlesbrough (Andy McDonald) and other hon. and right hon. Members have made clear in this welcome debate, Brexit has huge implications for our whole transport network, but I want to focus on the rail freight sector. I was disappointed that the Secretary of State did not include rail freight as one of his priorities, and I suspect that the rail freight industry will be disappointed, too. When the Minister replies to the debate, I hope he will reassure us that the Government take the industry’s concerns seriously.

I have previously raised in the House the situation of DB Cargo UK, a company with headquarters in my constituency that has recently announced 893 redundancies. In a letter to the trade union ASLEF, the company said that as well as falling demand from the coal and steel industries, Brexit has caused a slowdown in demand for the movement of freight by rail. I have discussed the problems facing the rail freight industry with the relevant trade unions and also this week met the chief executive officer of DB Cargo UK, Hans-Georg Werner. I hope Members and the Minister will agree that rail freight is a key service for those doing business in the UK, enabling the import and export of goods through ports and the channel tunnel and, crucially, the movement of goods within the UK. Rail freight depends on the total volume of UK trade as well as the modal share between rail and road. It is a good barometer of the health of the economy as a whole.

[Andy McDonald]

Does my right hon. Friend agree that sustaining the rail freight industry is vital for the maintenance of the infrastructure itself and that we neglect that issue at our peril?

[Dame Rosie Winterton]

My hon. Friend makes an absolutely correct point. That is why we need to use this debate to highlight some of the infrastructure issues we face and to try to tease out of the Minister what the autumn statement might mean for the rail freight industry.

At the moment, the Government are giving little clarity as to what they are looking for from future trade agreements, but it is clear that some options, particularly those with increased trade tariffs, could be challenging for the UK market as a whole and for rail freight in particular. We know that uncertainty about what trade agreements will be reached in those Brexit negotiations is having a detrimental effect on business. The rail freight industry has been especially affected by the slowdown in the construction industry, where there is a nervousness from investors; as we wait for the Government to set out their negotiating position, investment decisions are being put on hold. Whether we are to remain in the customs union and whether we are to maintain access to the single market could have massive impacts on our customs and excise regime, which would naturally have an impact on points of entry, such as ports.

We must also consider the direct impact of European legislation on the rail freight industry. Much railway legislation derives from European law and provides a number of essential protections for rail freight, for example, on track access and charging. It will be vital that these protections continue in any revised legislation. I know the industry considers it essential that a coherent and holistic approach is taken, with any change in law being specifically linked to a change in Government policy for the railways, rather than having piecemeal changes. That applies to legislation on rail freight through the channel tunnel. Many railway standards are also set at European level, particularly technical standards for interoperability, which aim to improve the cost-effectiveness of railways and the ability to operate across Europe. I hope the Minister can assure me that discussions with the industry are being held about any revisions to infrastructure standards, to protect the ability of freight to operate efficiently.

There is a real need for the Government to provide reassurances to the rail freight sector, so that business confidence remains strong and investment is supported. Rail freight operators need confidence to plan ahead, when buying new wagons, for example, investing in new terminals to support future traffic and looking at expanding in areas such as the automotive industry. Again, the Government need to work closely with the rail freight industry to make this happen and deliver solutions that support growth.

One such solution is, of course, HS2, which has the potential not only to provide business for the rail freight industry during construction, but in the longer term to free up capacity for rail freight. Again, I hope the Minister can assure the House that the Government are talking to the industry about the potential for rail freight in HS2.

There are many other areas of European law that affect the rail freight industry, especially workers’ rights and environmental legislation. Workers’ rights and protection are particularly important in this industry not least because of safety considerations—something of which we are too well aware at the current time. I hope that the Minister can assure me that he is discussing these issues with the relevant trade unions.

My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), the Chair of the Transport Committee, made some very good points with regard to environmental legislation. Rail freight is vital in cutting emissions, and we need assurances that, once we have left the European Union, we will mirror agreements under the EU and work actively to help the industry by investing, through Network Rail, in projects that increase capacity, improve connectivity and encourage intermodal solutions to help cut emissions. I hope that, in the process of doing that, we will look across Europe for good examples. In Austria, for instance, I understand that subsidies are available for trains that carry road freight vehicles, and we need to consider whether we should be emulating such practices as we go forward. Will the Minister tell us what planning has been done to improve not only freight productivity, but that link with environmental targets?

On the autumn statement, will the Minister tell us what its implications are for the rail freight industry? I am not sure whether I heard the words “rail freight” mentioned during the statement. I know that the Chancellor said that it will be about departmental decisions, but, again, because the Secretary of State did not mention it in his opening remarks, can the Minister shed a little light on what he thinks the Department is looking at with regard to rail freight, and also what the process will be for coming to those decisions? Investment was talked about, but we need to see that applied to the rail freight industry.

As we have seen today, the process of leaving the European Union will be complicated, fraught with uncertainty and might have considerable unforeseen consequences for our economy’s productive capacity. The need to secure the most advantageous deal for business is understood, but of course the shape of that deal is what will be contested over the coming months. I hope that we can agree that there is an overriding need to reduce uncertainty for business as a whole and for the rail freight sector in particular. It is essential that the Government have serious discussions with the rail freight industry and the unions, which represent those who work in the industry, about the post-Brexit future, so that the best possible outcome of Brexit negotiations can be achieved. Again, I hope that the Minister, in his reply, will be unequivocal about his commitment to openness, transparency and the fullest possible consultation with all those involved in this vital industry.