East Midlands Rail Franchise

Debate between Andrew Jones and Paul Sweeney

Thursday 11th April 2019 Commons Chamber

[Andrew Jones]

I will agree that franchising is one of the best ways to deliver passenger service improvements and new rolling stock, so we agree strongly on that. The hon. Lady might wish to speak with her Front Bench. In terms of the delay on south eastern, it is a complex matter and it is still being evaluated. We will make the decision as soon as possible.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Is it not correct that the franchise system is a fundamentally flawed business model? Over the past 10 years, we have seen £3.5 billion extracted in dividends—money creamed off our railways that could have been reinvested had we had a proper model of public ownership and democratic accountability in our railway system. Indeed, Virgin Trains alone has extracted £53 million in the last year. It is a thoroughly inefficient system that needs to be corrected, and that includes ScotRail too.

[Andrew Jones]

The hon. Gentleman is wrong. He talks about the dividends that are paid, but he fails to remember one important point, which is the amount of investment brought in from the private sector through the franchising process. That has totalled £10 billion. Would the Labour party take that from taxation or other spending areas? Where will that money be found if we do not bring in private sector investment? Those are great questions which the Labour party is not addressing in its ill-thought-through, uncosted attempts at nationalisation.

St Rollox Railway Works: Closure

Debate between Andrew Jones and Paul Sweeney

Monday 14th January 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

It seems very late to be starting an Adjournment debate. Indeed, it is so late that we do not even have the hon. Member for Strangford (Jim Shannon) with us.

I start by congratulating the hon. Member for Glasgow North East (Mr Sweeney) on securing this debate and on the passionate way he has spoken about this important industry in his constituency. We had a very positive meeting with him, the company and the unions earlier today, and I entirely recognise the fact that Gemini Rail Services’ announcement on 12 December of a consultation on proposals to close the depot had serious implications for all the people who work there, their families and the neighbouring communities. I recognise the impact that this announcement will have had on them.

I should also point out, as I did earlier on, that the Government do not have control over the direction of Gemini Rail Services, which is a private business. As it clarified in our meeting, this was a commercial decision taken in response to market conditions and the changes we are seeing as our rail network modernises, with new rolling stock coming into service. The provision of railway services that both begin and end in Scotland is a devolved matter, as is economic development. I know that the Scottish Government have engaged with the company and the unions about the planned closure and are taking action, to which I will return a little later.

This debate provides us with the opportunity to consider both the importance of the rail sector to the UK economy and the rail industry’s prospects. Our rail industry is critical as one of this country’s most vital and intensively used transport arteries. We rely upon it for the rapid movement of people and goods to the right destinations at the right time reliably and safely, day after day. On those measures, the UK rail industry has been a great success. Despite a huge increase in rail usage, we have one of the safest railways in Europe, with over 80% passenger satisfaction and over a billion more passenger journeys a year.

The Government are investing a record amount of money. The budget for the next control period—CP6, starting in April this year—is £48 billion to boost performance and sustain growth. The budget for the Scottish rail industry will be £4.8 billion. The provision of rail services in Scotland is obviously a matter for the Scottish Government, but I wanted to highlight that significant figure. The CP6 funding settlement provides more funding than would have been allocated under the Barnett formula, so it is a generous settlement that provides ample funding for the Scottish railway.

[Mr Sweeney]

The Minister is making a number of pertinent points, but the fundamental crux of this issue is that while it is a private decision for a private company at this point, it is clear that the company, ScotRail and Network Rail could work collaboratively to restructure the site to put it on a sound commercial footing and allow it to win business competitively. This is not about bailing something out or state aid for a failing industry; this is a kernel of expertise and a centre of excellence that could thrive with a restructuring of ownership. That would require urgent, robust intervention from both ScotRail, Transport Scotland, the Department for Transport and Network Rail. Does he agree that that is the way to proceed?

[Andrew Jones]

I am coming on to that. My point is that as we start this period of high investment, both on a UK basis and within Scotland, we will need the workforce and the supply chain to deliver on those ambitions. Companies such as Gemini Rail Services and the works at Springburn and hundreds of other companies up and down the country, including train firms and those designing signalling, all contribute to the modern rail industry that we need. Partnership between the public and private sectors has delivered real improvements, and I will come on to the hon. Gentleman’s specific points.

The rail supply chain is a significant industry, and I do not think that people realise just how big it is. It employs over 225,000 people and adds £5.2 billion to our economy. I recognise that supply chain companies, in addition to being important players in the sector, are important within their communities, which was a key point made powerfully by the hon. Gentleman. That is why we have launched the rail sector deal. We need the industry and Government to create a partnership to deliver the jobs, skills and growth that we require. The deal is important and has several agreed outcomes, such as reducing the cost of digital signalling and ensuring that the supply chain better understands future demand, giving companies more confidence to invest in skills and innovation. Through the sector deal, the industry will deliver long-term education and a people strategy for the rail sector. These are important matters and, as the hon. Gentleman says, this plant can play a vital role, through the sector deal and through the supply chain work, in the rail industry of the future. The deal is about creating the capacity and capability for the rail industry to export more, helping to build more trading relationships with partners across the globe as we leave the EU.

I can understand why the hon. Gentleman has called this debate and why other colleagues have intervened, because this issue matters. No one wants to see industrial closures. That is especially true when there is such significant industrial heritage, which this plant very clearly has. From a basic human perspective, we all feel natural concern for all those who may lose their job, and there is also concern about the loss of skills from both the Scottish economy and the sector as a whole.

The company said earlier today that it is projecting a short way into the future but cannot see the supply chain or orders to keep the operation going, and it said that there might be some way of constructing a deal that would bring different parties together to construct an offer, and perhaps to change the nature of the work at the plant. I am very clear that that would be a fantastic opportunity, should it be possible. As I said in the meeting, I will write to the Scottish Transport Minister to highlight this debate and the concerns that have been expressed.

The hon. Gentleman talked of a consortium coming together for a deal, which would be a positive thing to happen. Speed will clearly be of the essence, and I will make sure that my communication with Mr Matheson, the Scottish Transport Minister, is prompt.

Network Rail could electrify part of its network to open more opportunities for electric rolling stock to be maintained at the plant. Such things need to be considered, but I entirely recognise the point about timeliness. Given the amount of money that rail electrification has been costing, £700,000 is a very small budget, but the point remains. Opportunity exists, and it should be taken.

[Mr Sweeney]

I thank the Minister for giving way once again. He says that urgency is critical in this situation, particularly when we have the sword of Damocles hanging over us with the serving of a statutory notice, which sets the clock ticking on a 45-day consultation, ultimately leading to the loss of those jobs, the dissipation of that skill critical mass and the closure of the site.

It is particularly concerning that the company instructed its facilities manager to dump £1.2 million of materials in the form of paint, gangway strouds and brackets, and so on. That is a huge waste that the company is already prepared to write off. It stripped all the signage from the site over the weekend, so it is clear that we need to act urgently to urge the company to delay this, because there is an opportunity to salvage the site. The company has to act fairly in engaging with all stakeholders, state and private, to form a solution that can retain the jobs and integrity of the site. Currently, the omens are not good. Will the Minister write to the owners of the company urging them to hold their fire for now?

[Andrew Jones]

In the meeting this afternoon, the company said it would be very happy to participate in the consortium the hon. Gentleman describes, which seems very positive. I hope all sides will enter this opportunity with their eyes open and with a constructive attitude.