Rail Services: East Durham Coastline

Grahame Morris Excerpts

Tuesday 1st April 2025 Westminster Hall

[Sir Jeremy Wright (in the Chair)]

I will call Grahame Morris to move the motion; I will then call the Minister to respond. I remind other Members that they may make a speech only with prior permission from the Member in charge of the debate and from the Minister. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.

[Grahame Morris (Easington) (Lab)]

I beg to move,

That this House has considered rail services on the east Durham coastline.

It is a pleasure to serve under your chairmanship, Sir Jeremy. Some hon. Members might be expecting me to start with an April fool’s joke, but after hearing about the state of rail services in my constituency, they will agree that no joke or exaggeration could be more ridiculous than the reality that my constituents face every day.

The service is characterised by delays, no-notice cancellations and dangerously overcrowded trains, particularly during peak periods, which all too often leave passengers stranded on the platform. In London, where the next service may arrive in a matter of minutes, that might not be an issue, but at Seaham and Horden, one cancelled service means at least an hour’s wait. Rail links should promote connectivity, providing opportunities to access education and employment. However, Northern’s failing services mean that my constituents cannot depend on transport links to maintain their employment.

[Chris McDonald (Stockton North) (Lab)]

Does my hon. Friend agree that what he has described not only affects his constituents in Easington, but extends down to my constituents in Billingham in Teesside and prevents our constituents from seeking employment and educational opportunities in the major conurbations of the north-east?

[Grahame Morris]

My hon. Friend’s point is well made. I completely agree: the problem affects not just my Easington constituency, but Hartlepool, Billingham and the Tees valley. Not only does it undermine local opportunities, but it damages our local economy and takes wages out of our community as people are forced to move closer to work or to areas with more dependable transport links.

The community welcomed the reopening of Horden station in June 2020, after a prolonged battle to secure much-needed transport investment, but it was meant to unlock economic opportunities in Middlesbrough, Sunderland and Newcastle. Instead, its unreliability and the lack of additional services have only worsened the pre-existing problems further down the line at Seaham. As a frequent passenger myself, I experience the chaos caused by cancellations and insufficient capacity. My constituents and I simply cannot depend on Northern with its cancellations, delays and dangerous overcrowding, particularly when there are only two carriages at peak times.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for raising the issue. As well as affecting people’s jobs and their ability to get to work, it has an impact on those in the countryside who need transport to get wherever they are going, whether that is for a doctor’s appointment, for work or for a visit to relatives. The impact is compounded for those who live in rural isolation. Given what the hon. Gentleman is outlining, does he feel that a commitment from the Government is needed to sort out the shortcomings of the rail line?

[Grahame Morris]

The hon. Gentleman is absolutely correct.

I welcome the Government’s recent decision to publish train cancellation and delay data, including monthly figures on the worst-performing stations, via the Office of Rail and Road. Holding operators to account is essential if we want things to improve, but the data does not capture the passengers who are left on the platform. Whether it occurs through cancellation or through dangerous overcrowding, the outcome is the same: passengers scramble to find last-minute alternative means of travel. In the past 12 months, 6% of trains were cancelled at Seaham and Horden, including at least one train every day on average, and only two thirds have run to time. With one train per hour, the cancellations and delays have huge impacts.

Northern’s performance is erratic. In September last year, there were 38 cancellations on the route. By October, the number had skyrocketed to 186, which is almost five times as many. By the end of 2024, the situation had further deteriorated, leaving residents with no reliable means of reaching work, school, health appointments or other vital appointments by train. Northern attributed that partially to staff sickness, with driver absences at 17.6% and conductor absences at 16.9%, but questions need to be asked about what is driving such high levels of sickness.

I have met the chief exec and senior officers on several occasions. Their proposed solution of relying on rest-day working is simply not sustainable, and I fear that it will increase staff sickness over the long term. This is a safety-critical industry. We need to ensure that staff are safely rested, not under pressure to work at unsustainable levels. The industry should not be running on voluntary overtime; it must employ enough staff to ensure resilience in the system.

A long-standing issue on the route is the lack of rolling stock. Until 2019, believe it or not, we were still served by the old Pacer trains from the 1970s. We now have second-hand ScotRail class 158s and 156s, which have been refurbished. In the north-east, we are more than willing to accept repurposed rolling stock, but only if the service is regular and reliable and if it meets our transport needs.

Another long-standing point of contention is the fact that Northern runs only two carriages, instead of four, during peak periods. The lack of carriages is not just inconvenient; it is a health and safety concern. In previous debates, I have raised the case of a young boy who fell unconscious on an overcrowded train. I cannot imagine the terror of someone watching their child going limp, with their eyes rolling back, and then collapsing, with no escape from an overcrowded carriage.

Overcrowding is still a concern. I happen to be a Sunderland supporter, but when Newcastle are playing, scores of people are left on the platform at Horden and Seaham because the once-an-hour two-carriage train is already crammed with people who got on at Stockton, Billingham and Hartlepool. My constituents are left feeling angry and frustrated.

The issue has been raised repeatedly since I became an MP in 2010, but very little has changed. I therefore welcome the new Government’s commitment to the creation of Great British Railways, because we cannot promote economic growth with failing public transport. We can get our broken railway system finally back on track by ending decades of waste and starting to restore public trust, but there is a lot more to be done.

Northern Rail returned to public ownership in 2020, after the previous franchise had taken millions of pounds in dividends in return for substandard services. There may no longer be dividends rewarding failure, but the service remains substandard. I thank the Rail Minister for meeting me and other colleagues recently to discuss the Government’s plan, which is fantastic, to procure 450 new trains for Northern. That is a very welcome step, but will the Minister confirm how many of those trains will be allocated to the east Durham coastline? Given the isolation that my constituents feel because of unreliable transport, will he prioritise east Durham for the delivery of newly procured trains?

The long-term investment in new rolling stock is essential and fantastic, but its impact will not be felt until at least 2030. Like many people, I believe that we need some interim solutions. In the time remaining, I will outline them, because I have been told time and again—not just by this Government, but by the previous one—to bring solutions as well as problems.

First, Grand Central, the open access operator, has submitted two applications to the Office of Rail and Road. One application seeks to extend its track access agreement beyond 2027, but the other proposes more services, including a new stop at Seaham station, which the current Grand Central service runs through without stopping. That would not only provide additional capacity to Sunderland and Hartlepool, where services are severely overcrowded, but create the first direct link from my constituency to York and London. As the Grand Central service already passes through Seaham, adding a stop would extend the journey by only a few minutes.

The benefits of that additional Seaham stop cannot be overstated. Grand Central is still awaiting a decision, so I ask the Minister kindly to provide an update from the ORR. I understand that the Government might be reluctant to expand contracts for open access operators, given the move towards public ownership and concerns about loss of revenue. To my constituents, however, Northern and Grand Central are not running in competition; they are simply providers of rail services that are desperately needed in my constituency.

My second suggestion is that we increase Northern services from east Durham to Middlesbrough and Newcastle. I was pleased to receive a positive response to my written question on the matter. The ministerial response confirmed that the Rail North Partnership, on behalf of the Department for Transport and Transport for the North, is examining a business case for increasing services at Horden and Seaham by December 2025. It also said:

“The analysis must balance the economic and social benefits of this enhancement with the performance of existing services and the financial impact on taxpayer subsidy.”

I gently remind the Minister that the economic and social benefits of this enhancement to my constituents must not be underestimated. We have very low car ownership in east Durham. For those without access to cars, it is incredibly difficult to get to Newcastle, Sunderland or Middlesbrough without spending hours on buses. People turn down jobs and college places because they simply have no reliable way of getting to them. That is a major barrier to economic growth.

A small but significant improvement would be to amend the timetable of the semi-fast Northern service between Middlesbrough and Newcastle. Since 2023, that two-hourly service, which is often a four-carriage train, has skipped Seaham and Horden despite high demand. The time saved by bypassing those two stations is between four to six minutes, but adding those stops would provide immediate relief to my constituents, with an additional train every two hours. All three of those solutions—Grand Central’s additional stop, increasing Northern services, and minor timetable adjustments—are needed while we await the arrival of new rolling stock beyond 2030.

If we are serious about local growth in east Durham, people must be able to travel out of their towns and villages to work, study and access local amenities—pubs, restaurants, cafés, medical facilities and shops. I wrote to the Secretary of State in January and February outlining these issues, and I would welcome the opportunity to meet Ministers to discuss them further.

The people of east Durham have waited far too long for a reliable rail service. They have endured overcrowding, cancellations and an outdated network that fails to meet their needs, and while I warmly welcome the Government’s commitment to procuring new trains and increasing services, some short-term action is also required. Reliable transport is not a luxury; it is a necessity for jobs, education and economic growth. I urge the Minister to prioritise east Durham and to work with me and other colleagues to ensure that Seaham and Horden finally get the rail service they deserve.

[The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)]

It is a pleasure to see you in the Chair, Sir Jeremy, and I congratulate my hon. Friend the Member for Easington (Grahame Morris) on raising the important subject of rail services along the east Durham coastline. I also thank other Members for their contributions today.

The Government’s mission for growth is our No. 1 priority. We are kick-starting economic growth across the country. This means more and better jobs and more money in people’s pockets, but as I am sure my hon. Friend recognises, we cannot have good and stable growth without a rail network that performs for his constituents in Easington and everyone across the north-east and the country.

Let me be clear: I am as frustrated as my hon. Friend by the poor service his constituents have experienced using Northern. He mentions overcrowded services, and I fully understand that passengers get frustrated when they regularly have to stand on trains, but I assure him that the Department requires its operators to plan services and rail timetables to meet passenger demand. We issue operators with guidelines on loading, including on standing time, and for most of the north that is currently 20 minutes.

However, services need to be operationally resilient and to provide value for money for the taxpayer as well as a reliable service for passengers. That means that it is not possible to guarantee every passenger a seat on every service, as that would require operators to maintain significantly larger fleets to meet demand at peak times, with trains then standing idle for much of the time. That being said, Northern, like all operators, takes its safety obligations seriously, and if my hon. Friend sends me more details on the specific safety cases he mentioned, I will be happy to take them up with Northern and write back to him.

None the less, it has been made clear to Northern’s management team that its current performance is not acceptable. That is why the Rail North Partnership, through which the Department for Transport and Transport for the North jointly manage Northern’s contract, issued the operator with a notice of breach of contract. We have required Northern to produce a detailed plan to improve its services for passengers, including the constituents of Easington.

That plan will require Northern to follow the necessary steps to match the Government’s ambition for transport across the north. Northern must resolve long-standing disputes with the National Union of Rail, Maritime and Transport Workers conductors to deliver a passenger-focused railway that runs seven days a week, whether on a Monday morning or a Sunday afternoon. It must develop its fleet and train crews and strengthen resources across engineering, control and operations. I also agree with my hon. Friend about the importance of resilience when staff go off sick, which is in Northern’s improvement plan.

[Grahame Morris]

I am grateful to the Minister for seriously addressing the issues that I raised, and I hope that he will address my other two principal suggestions. It is all very well talking about resilience, but people’s travel plans are formed by their experience. We are trying to grow the railway and the local economy, but when individuals go to the railway stations at Seaham or Horden with their families to go shopping in Newcastle or Middlesbrough and they cannot get on the train, that experience colours their judgment. The next time, instead of standing there in the rain for an hour, they will choose an alternative method; they will take the X10 or find some other means of getting there. We really need to up our game and provide frequent and regular services from these stations.

[Simon Lightwood]

I agree, which is why the Government are placing passengers at the heart of our plan for Great British Railways. I hear what my hon. Friend is saying very clearly.

The improvement plan aims to tackle the resilience issue by ensuring that the operator develops a structure, from governance to process, that enables the business to better manage staff sickness. I agree with my hon. Friend that the railway industry’s reliance on rest-day working to operate services is not sustainable. That is why the Rail Minister in the other place has instructed Northern to ensure that it recruits and trains to its full complement so that overtime can be used for additional tasks, such as training, rather than running services.

I am ambitious for Northern to get back on the path to delivery by meeting the steps in its improvement plan, which will result in a more reliable service for passengers and my hon. Friend’s constituents. Northern’s overall cancellations are at more than 8%. That is not acceptable, and I share Members’ frustrations. That is why the improvement plan also sets a clear target for Northern: 90% of all its trains should arrive within three minutes of the time listed on the timetable, and cancellations should be below 3%.

I turn to services, because I note my hon. Friend’s comments about the semi-fast Northern service between Middlesbrough and Newcastle. I assure him that the stops chosen reflect the aspirations for a semi-fast service between Middlesbrough and Newcastle, and were chosen in collaboration with Transport for the North and its members. I gently remind my hon. Friend that Transport for the North and its members have never requested additional stopping services on the Durham coastline. The current infrastructure could not support a two trains per hour stopping service as well as one train per hour on a semi-fast service. Given the line’s capacity constraints, including freight traffic and shared use with the Tyne and Wear Metro, adding stops at Horden and Seaham would require remodelling to assess its operational viability.

[Grahame Morris]

Will the Minister give way?

[Simon Lightwood]

I am going to make progress. My hon. Friend will forgive me.

I also note my hon. Friend’s support for new proposed services from Grand Central, and I recognise the important role that Grand Central has played in improving connectivity and choice for passengers in the north-east. That is why the Department has provided support in principle to Network Rail’s consultation on the application from Grand Central to extend its existing access rights for an additional 11 years. However, capacity constraints on the east coast main line mean that we cannot support Grand Central’s separate application to operate additional services. That was set out in our letter to the regulator on 4 February. I note that some of those services would call at Seaham, which is in my hon. Friend’s constituency.

I direct my hon. Friend to the improvements that the Government have already made to Northern connectivity and capacity. Although Northern’s procurement of new trains is at an early stage, and at this point I cannot say in detail where any of them will be running, I assure my hon. Friend that the new trains will have greater capacity and, over time, they will replace almost the entire Northern fleet, including those on the Durham coastline.

In Sunderland—home to the best football team in the world, as I am sure my hon. Friend will agree—we are carrying out the biggest overhaul of the railways in a generation to put passengers first and to deliver punctual, high-quality services. Grand Central trains already run to London five times a day on weekdays and four on weekends. That will only improve from December this year, when Grand Central will run an extra service to replace the withdrawn service from London North Eastern Railway.

Meanwhile, a regular metro service also provides connectivity to Newcastle, where two LNER trains per hour go to London. That will increase to three per hour from December this year. LNER continues to operate one return service from Middlesbrough to London, and although additional services to Middlesbrough are heavily dependent on changes to local station infrastructure, I remain ambitious for improvement.

I assure my hon. Friend that the Department remains supportive of a role for open access services where they provide improved connectivity and choice for passengers. However, we must ensure that they are a good use of taxpayer money and do not negatively impact the operation of the network. It must be noted that although the Department reviews open access applications as part of a standard process, access to the rail network is a matter for the regulator, and no decision on the applications from Grand Central has yet been made.

As I mentioned the east coast main line, I will reassure my hon. Friend about the Government’s commitment to invest in rail. The east coast main line will take advantage of a £4 billion investment when the timetable changes in December. That will mean 16,000 more seats daily between London and Newcastle, an hourly LNER service between both cities, more local trains north of Newcastle, new trains between Sheffield and Leeds, more services between Reading and York, and provision for additional services connecting Middlesbrough, Sunderland and Newcastle, and Nottingham and Lincoln. Again, I thank my hon. Friend the Member for Easington for securing this important debate, and I thank hon. Members for their brief but important contributions.

Question put and agreed to.

Oral Answers to Questions

Grahame Morris Excerpts

Thursday 13th February 2025 Commons Chamber

[Heidi Alexander]

I appreciate the right hon. Lady’s commitment to making the case for a new station at Aldridge, but I gently point out to her that in the 14 years of her party’s Government, including her own stint in the Department for Transport, the station failed to materialise. The West Midlands combined authority has had to prioritise the delivery of schemes that are in construction. That seems to me to be a reasonable approach, but I appreciate that she will continue to make the case for her own station.

[Grahame Morris (Easington) (Lab)]

Open access operator Grand Central already runs five services daily from Sunderland to London King’s Cross through my constituency, but unfortunately they currently do not stop. My constituents have endured years of poor rail services from Northern Rail, with just one overcrowded two-carriage train an hour, which is often cancelled or delayed. While I welcome this Government’s investment in 450 new trains for Northern Rail, we need some immediate solutions. Will the Minister urge the ORR to approve the application from Grand Central to allow these trains to stop at stations in my Easington constituency?

[Heidi Alexander]

Open access operators currently account for 1% of our railways, and they do not always have the same public service obligations as other train operating companies. We have always supported open access operators where they genuinely add value and do not divert revenue away from existing operators, all of which are supported by the taxpayer in some form. I would add that we need to make best use of constrained capacity on the rail network. Ensuring that the railway can recover from problems on the railways is also important to me.

Oral Answers to Questions

Grahame Morris Excerpts

Thursday 9th January 2025 Commons Chamber

[Heidi Alexander]

We have had decades of chaos on the railways, and railways that simply did not work for people. What is needed is a fundamental reset with the trade unions to deliver improvements for passenger services.

[Grahame Morris (Easington) (Lab)]

T4. From 7 November to 7 December, Northern Rail cancelled 460 services across the Tyne, Tees and Wear region. An average of 20 services a day were either cancelled or short-formed during this period.

[Mr Speaker]

This is topicals.

[Grahame Morris]

I know. Will the Secretary of State facilitate a meeting with the Rail Minister to put in place an urgent action plan and address the issues of staff shortages?

[Mr Speaker]

I know you could go on, but I am sure the Minister can answer that.

Transport

Grahame Morris Excerpts

Monday 9th September 2024 Commons Chamber

[Grahame Morris (Easington) (Lab)]

I will not detain the House too long—[Interruption.] Hooray! I just want to make a couple of points. As the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), indicated, we both served on the Transport Committee in the last Parliament, and the Committee did quite a detailed inquiry on the sustainability of fuels in all sectors. We made several recommendations, and I do not believe that there is a cigarette paper—perhaps that is a non-PC term—between the two sides of the House on the issue, but I want to ask a couple of questions.

This subject is really complicated and is plagued with acronyms—HEFA, SAF, ATF, eSAF, HPBM, Jet Zero. I will not be tempted into aviation puns, but there are some important stats. As the Minister stated, estimates suggest that the sustainable aviation fuel industry could create up to 60,000 jobs by 2050—the shadow Minister said that there would perhaps be 10,000 new jobs, but that is in a longer timeframe. The shadow Minister also said that the SAF industry could contribute as much as £1 billion to the UK economy, but by 2050, it could contribute as much as £10 billion, so it is clearly a very important sector.

I am concerned about ensuring that sustainable aviation fuels under this mandate be required to meet the strictest sustainability standards. We must ensure that they are green fuels, and that there is a staged progression towards jet zero—we have heard what that is: 2% from 2025, 10% by 2030 and 22% by 2040—and we really must ensure that the greener fuels are responsibly sourced from the most sustainable locations, preferably in the United Kingdom. We had a debate last week about the launch of GB Energy and the importance of not exporting the jobs created through our efforts on decarbonisation. Will GB Energy play a role in some of these new technologies? We may well develop a hydrogen fuel cell that can produce green hydrogen much more cheaply, but in the meantime, to plug the gap, we must ensure that efforts are made to onshore as many of the jobs and benefits of this exciting opportunity as possible.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

Bus Franchising

Grahame Morris Excerpts

Monday 9th September 2024 Commons Chamber

[Simon Lightwood]

The ability of local areas and local transport authorities to take back control of their bus services is crucial for rural areas, because they know their communities best. Those decisions should not be made from places in Westminster or Whitehall. Again, local transport authorities understand the specific needs of their local communities, be they rural or urban, and are best placed to make those decisions and design the network around those needs.

[Grahame Morris (Easington) (Lab)]

I welcome the statement and draw to the Minister’s attention the Transport Committee report, “Bus services in England outside London”, which was produced under the chairmanship of my hon. Friend the Member for Nottingham South (Lilian Greenwood), who is now Under-Secretary of State for Transport. There are some excellent recommendations in there. In regions such as Greater Manchester, the process of introducing bus franchising has been quite lengthy. Granting combined authorities the ability to directly award contracts would significantly shorten that timeline, allowing areas such as the north-east to bring about faster improvements. Will the Minister confirm that the better buses Bill will include provisions for direct award powers?

[Simon Lightwood]

I can confirm that my officials are investigating the means to do just that, and I will update the House accordingly as progress continues.

Passenger Railway Services (Public Ownership) Bill

Grahame Morris Excerpts

Committee of the whole House
Tuesday 3rd September 2024 Commons Chamber

[Helen Whately]

No, I will make some progress.

For the reasons I have described, we have also tabled amendments to put some conditions on franchises moving into the public sector. Under the Secretary of State’s plan, the running of trains on our network will increasingly be tasked to a little-known Government company called DFT OLR Holdings Ltd, or DOHL, the current operator of last resort. It seems to me a huge risk to expect DOHL to successfully take over and run every franchise in the country. DOHL has had, shall we say, mixed results with the franchises it has taken over, and expecting it to run a further 10 on top of the four it is currently operating strikes me as a lot to ask. I recognise that the Bill makes reference to that risk by providing for franchise extensions where it would not be practical to bring the service in-house, but under the current plans, that would be decided by the Secretary of State. It is not that I do not trust the right hon. Lady, but she has shown herself to have a great deal of confidence in public operators, in the absence of any substantial grounds for that confidence.

I have been told that there is no plan to increase headcount, budget or resources of any kind for DOHL as it takes on that increase in workload from four to 14 franchises. I welcome the Government making an effort to achieve efficiencies at the centre, but I struggle to believe that more than tripling the number of franchises brought in-house will not involve some increase in resources. We therefore think it would be prudent for the Office of Rail and Road to form an independent judgment on whether DOHL has the capacity and expertise to take on each new franchise as it comes up, and to run it, at a minimum, as well as it is already being run. That could be done well in advance of most contracts ending, so it would not really be a hindrance to the Secretary of State’s plan, but it would provide a great deal of reassurance to passengers, and all of us as their representatives, about the capacity of the Government to successfully take over the functions of so many train operating companies.

[Grahame Morris (Easington) (Lab)]

On impact assessments and how we can have confidence that DOHL will improve performance, we can look at past performance. I remind the shadow Minister that the operator of last resort currently runs 14 franchises. Since the east coast main line, which serves my region, was taken over by LNER, revenues have grown substantially. Since TransPennine Express was brought back into public sector operations in May 2023, we have seen cancellations decrease from an average of around 20% to 5%. In the last quarter, TransPennine, which is run by the operator of last resort, DOHL, was the most improved operator in terms of cancellation scores compared with the same period last year.

[Helen Whately]

I accept some of the points that the hon. Gentleman made. That is why I said that the record of DOHL had been mixed. Sometimes there has been improvement in performance, but that is not the case for all the franchises it runs. That is my reason for not being confident that it is the right organisation to take on such a large increase in its workload, particularly without any further increase in its resources, including some operators that are performing better than the train companies that he mentioned.

We want every contract that is awarded to place a duty on DOHL to look at how to modernise our network and to ensure that passengers are at the forefront of all decision making—passengers not just in urban areas and around London but, crucially, in rural areas and places that have traditionally been under-served by the rail network. Time and again, the Secretary of State has said that her No. 1 priority is passengers—that she will protect their interests above all else, and that it is for them that she is seeking this change. This is a chance to put her money where her mouth is and create a legal duty that promotes the needs of passengers in all future agreements with public sector operators. That will build in a layer of accountability on things that we all agree are important.

On amendment 8, public bodies marking their own homework is not something that Opposition Members believe leads to good results. I know from my time in government that independent scrutiny makes life harder for Ministers, but it also improves accountability, and with that outcomes. That is why we seek to introduce proper financial reporting and oversight for public sector operators. Under the franchise system, whatever its shortcomings, train operators are incentivised to increase passenger numbers and control costs. That has been an undeniable success of privatisation. Passenger numbers have doubled and costs have been controlled, increasing at a far slower rate than revenue.

In future, passengers and taxpayers will have to foot the bill for any loss of control on costs, any inefficiencies or any failures to innovate. That is a serious implication, and something we should do our best to protect people from. Creating, or recreating, some incentives is a good place to start. We will need to know how well the public train companies are performing—what they are doing to increase passenger numbers and drive growth in rail services, how reliable their services are, how well they are keeping costs under control, and how satisfied passengers are with the service they provide.

Our proposals will allow us to identify both good and bad performance, hold the managers of those companies to account and reward them accordingly, such as by linking managerial pay to performance. Those companies will no longer have shareholders to answer to, or the financial incentives that go with a senior role in the private sector. The Government have told us that part of their rationale for these changes is to better align the incentives of train operators with the interests of passengers, but the Bill currently provides no mechanism for that. We are not seeking to frustrate a change that this Government were elected to deliver; we simply wish to bring proper transparency and accountability to the process. That includes reporting on the costs involved in bringing operating companies into public ownership.

Government Members will no doubt point to the money that will be saved by removing management fees, but this equation is not one-sided. While the Secretary of State might be saving £150 million each year on fees, industry experts have predicted that the Bill could cost passengers and taxpayers up to £1 billion a year in lost productivity and growth—and that is before accounting for the Government’s taking on all the long-term liabilities of the companies. Pension obligations, rolling stock and long-term leases will all be transferred on to the Government balance sheet, and we have had alarmingly little information on what that figure will be.

--- Later in debate ---

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

I will not speak for a great deal of time, as this issue is largely devolved in Scotland. However, I welcome the Bill, and the Scottish Government have been keen to support it through a legislative consent motion. That supports the work that has already been done in Scotland. We have put the railway into public ownership as a last resort, but the Bill will provide stability going forward for the Government and the operator and enable them to do much better on medium and long-term planning, with certainty on what the future holds.

My amendment 6 brings into the debate the role of rolling stock leasing companies, or ROSCOs. Many Members on the Government Benches will agree that the ROSCOs are taking a huge profit out of the public sector. Rolling stock contracts in the past couple of years took more than £3 billion each year, and the amount of profit being taken from that is in the billions over the lifetime of the contracts. That money could be reinvested in the railways. I appreciate that it is not for this Bill, but I would like the Government to come forward with proposals on ROSCOs in the next Bill that will come forward later in the Session.

That is all I want to say at the moment. I do not intend to press my amendment to a Division, but I would like some assurance from those on the Government Front Bench that serious consideration will be given to how we deal with ROSCOs and the amount of profit being taken.

[Grahame Morris]

I start by declaring an interest. I am proud of the fact that I am a trade unionist and have strong links to the transport unions, particularly Unite, the National Union of Rail, Maritime and Transport Workers, and ASLEF. Indeed, as I pointed out on Second Reading, when I was a young fellow many years ago, my first job was on the railways, when they were part of British Rail. In those days, I was a member of the National Union of Railwaymen. More recently, I served on the Transport Committee for almost six years, and I am delighted that many of the arguments and issues that I and many other stakeholders raised in numerous sessions have finally found their way into a Government Bill and on to the Floor of the House of Commons.

--- Later in debate ---

[Andy McDonald]

The privatisation of the railways was a privatisation too far, even for she whose portrait should be removed. Does my hon. Friend agree that it is utterly ridiculous that the only nation state on the planet not able to run the railway in this country is this one?

[Grahame Morris]

Absolutely. If ever there was a charge of political dogma to be made, it must be about the fact that, under the terms of the privatisation, the British taxpayer and the British Government are not allowed to own a stake in our own railway. For too long, private companies have provided a substandard service while making substantial profits. Over the last seven years, the remaining private train operating companies—I apologise for misleading the Committee, but I misspoke earlier when I said that there were 14 of them; there are 14 franchises in total, four of which are operated by the state through the operator of last resort—have paid out an average of £130 million annually to their shareholders. Those companies are often owned by foreign Governments —in Germany, Italy, France and across Europe and the world. Meanwhile, passengers’ day-to-day experiences have been of overcrowded carriages, delays, service failure and, worst of all, some of the highest fares in Europe.

It is worth thinking about the costs, and the profits that some private train operators have been able to generate for shareholders. Figures released just this week show that Govia Thameslink Railway paid out a staggering £82.4 million in dividends, with £62.3 million of that being for the 2023-24 financial year. That represents a 268% increase from the previous year. In return for those princely profits, Govia consistently failed to meet two thirds of its customer service quality targets, as reported in the Financial Times. The situation was encouraged to persist under the last Conservative Government. I welcome the fact that Labour is making this a priority from day one, as that is fundamental to fixing the foundations and delivering the economic growth promised by the Prime Minister.

I support the comments made by my hon. Friend the Member for Derby North (Catherine Atkinson) and the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) about the rolling stock companies—the so-called ROSCOs. Many commentators see a problem with the newly formed Great British Railways having to continue to lease rolling stock from ROSCOs, as that would allow those companies to profit from taxpayers’ money. My view is that ROSCOs are an unnecessary link in the chain. I frequently raised the issue with experts and industry leaders on the Transport Committee, and I believe that we would benefit from meeting our rolling stock needs by placing orders directly with UK-based manufacturers such as Alstom and Hitachi, rather than enriching the ROSCOs.

Despite being in post for a relatively short time, the Secretary of State has made a strong start with the Bill. However, I urge her to consider the points raised by me and Members on both sides of the Committee about how we continue to procure rolling stock as we move forward. On Second Reading, the Under-Secretary of State for Transport, my hon. Friend the Member for Wakefield and Rothwell (Simon Lightwood), said that purchasing existing rolling stock would not be a responsible use of taxpayers money. I understand that, but will the Minister, in responding, clarify whether in the future, under GBR, there will be an option to purchase new rolling stock directly, instead of having to continue to lease through the ROSCOs?

As my hon. Friend the Member for Derby North said, the UK needs to upgrade to 4,000 units of rolling stock over the coming decades, with Network Rail estimating costs in the tens of billions of pounds, so this is an ideal opportunity to explore a new financing model for rolling stock. I am not naive—I understand the financial situation that we have inherited from the last Government—but I ask the Government to explore not-for-profit financiers if rolling stock cannot be nationalised under GBR. May I point out respectfully that Eurofima, a supranational not-for-profit financier, has stated that, for every £1 billion of financing on UK railways, it could save the taxpayer £350 million over 30 years due to its lower financing costs? That is compared to using the existing ROSCOs. Will the Secretary of State update us on the possibility of using not-for-profit financiers for rolling stock in preference to the ROSCOs?

I will take up the point made by the shadow Secretary of State about the pay review bodies. May I point out that they are not universally welcomed? I have been looking at responses to pay review bodies in the health service, and the last Government had a less than wonderful record when it comes to implementing the recommendations of pay review bodies, not least those relating to junior doctors. The Royal College of Nursing has said of pay review bodies that there is “nothing independent about them.” The chairs and members of pay review bodies are hand-picked by the Prime Minister and Government Ministers, and the terms of reference are decided by the Government. There is some scepticism about how independent they truly are, and about whether, when they make recommendations, the Government are obliged to implement them in full.

I ask the Minister if it is possible to provide a timetable for the next steps. When will future Bills be introduced to the House, and when is Great British Railways expected to be fully established? I acknowledge and express my appreciation for the engagement of the Front-Bench team. I stress that I support the Bill because I believe that it represents a critical step in fixing the long-standing issues in our rail system. The current privatised framework is giving a fragmented railway, and has failed to deliver value for money, an efficient service or customer satisfaction. I am pleased that we are moving towards a model that prioritises the needs of passengers over the profits of shareholders. Rethinking our approach to rail management and financing is a crucial first step towards fixing the foundations and putting Great British Railways at the service of the travelling public.

[Siân Berry (Brighton Pavilion) (Green)]

The Greens are not agnostic on privatisation. We very much support the principle of the Bill and look forward to its progress. I want to make a short speech on amendments 2 to 5, which I tabled. They are very simple and common sense; their goal is to leave open the opportunity for elected devolved bodies to set up companies that they own, in order to bid to run railway services under the overall guidance and wing of Great British Railways. The Bill, which restricts the definition of a public sector company to those owned by Ministers, either here or in Wales or Scotland, does not allow for that. That seems to clash with the direction of travel towards more public sector devolution, with which my party and I agree.

It would improve and future-proof the Bill if we amended proposed new section 30C of the Railways Act 1993 so that Ministers could in future choose a company set up or owned by combined authorities, or by groups of unitary, county, district or borough councils who decided to co-operate, ahead of further devolution, on improving their railways. Any decisions on the award of franchises, on the suitability of a body to run and own local railways, and on where investment should go would remain fully with Ministers. I tabled the amendments in a constructive spirit, and I hope that they will start a constructive conversation that will continue here and in the other place as the Bill progresses.

Passenger Railway Services (Public Ownership) Bill

Grahame Morris Excerpts

2nd reading
Monday 29th July 2024 Commons Chamber

[Grahame Morris (Easington) (Lab)]

Congratulations on your election, Madam Deputy Speaker.

I declare an interest, as I have a long association of mutual support and respect with the transport unions, particularly Unite, the RMT and ASLEF, and with all the trade unions more generally.

I welcome my right hon. Friend the Secretary of State to her new post, and I congratulate her most sincerely on prioritising the public ownership of our railways from the Government’s first day in office. This is a really important Bill, which gives me and many others on the left of the party hope and faith that this Labour Government, in which we have placed our faith, will deliver for us.

I had meant to wear my British Rail tie, because when I started work 45 years ago, or thereabouts—my goodness—I worked for British Rail in York and Scarborough. The tie is my treasured possession, but it is more elusive than a Conservative Back Bencher in a public ownership debate. I just could not find it.

I have spent quite a number of years on the Transport Committee, which scrutinised the last Government’s draft Rail Reform Bill. I welcome the Passenger Railway Services (Public Ownership) Bill, but it is clear to me that the franchising model has failed for three decades. It is now time to put passengers before private profits. By establishing Great British Railways, this Bill is the first step in taking back control.

A number of Members have raised points with which I agree, and I will mention them. I also take this opportunity to mention a local issue in my Easington constituency. The train stations in Horden and Seaham should provide easy access to Middlesbrough, Sunderland and Newcastle for employment, education and leisure. However, my constituents often experience unreliable and, at times, dangerously overcrowded services, with the chronic overcrowding meaning that passengers are often left on the platform or travelling in distressingly overcrowded carriages.

This could easily be solved by running four carriages instead of two, especially during peak periods when there is predictable demand, including on match days when my team, Sunderland, are at home at the Stadium of Light or when Newcastle United are at home at St James’ Park. Northern Rail invariably runs only two-carriage services at peak times, which seems incredible. I hope Northern Rail will address this issue.

I believe that running rail under one public entity will save taxpayers money and allow revenue to be reinvested in improving capacity and service frequency, both in my constituency and across the country. The British public have lined the pockets of private shareholders for 30 years. Over the past seven years, private train operating companies have paid, on average, £130 million to shareholders in dividends while taking public subsidies. Under the terms of the Bill, these profits will be reinvested in our railways.

We have seen how LNER, on the east coast main line, has paid more than £40 million to the Department for Transport since it has been in public ownership under the operator of last resort, but this Bill will go still further. There will be no more hefty management fees and performance bonuses to train operating companies, with more money paid back into Great British Railways.

I understand the safeguards for open-access operators, where they add value and capacity. In east Durham, Grand Central has applied to the Office of Rail and Road for four daily calls at Seaham station in my constituency, which would provide a direct connection to London, alleviating pressure on the overcrowded routes from Seaham to Sunderland. Open-access operators can benefit the network, so I hope the ORR approves these new services at the earliest opportunity.

I congratulate the Minister on building consensus with those on the frontline who run our railways, and I note the vocal support for the Bill from the RMT and ASLEF. I have long campaigned with the RMT and ASLEF for public ownership as the first step towards creating an integrated railway that prioritises passengers and our economic wellbeing over and above shareholder dividends.

The Secretary of State is on the right track—excuse the pun—and, while she is on a roll, I urge her to go a little further by reforming how we procure rolling stock, which Members on both sides of the House have mentioned. At present, the rolling stock companies lease trains to the operating companies at exorbitant prices. In fact, £409 million was paid in profits to shareholders last year, a 41.6% increase on the previous year. When Opposition Members ask where the money is coming from and how we will wring economies out of the system, there is £409 million that we could get out of the system relatively painlessly.

One of the original ROSCOs, Eversholt, is owned by CK Hutchison Holdings Ltd, a Hong Kong company set up by the billionaire Li Ka-shing, who also has shares in Northumbrian Water, which provides water and sewerage services in my region—another company that is failing the public by making millions from taxpayers. During the pandemic, the public purse subsidised train operating companies at unprecedented levels while the ROSCOs’ profits continued to soar. Yet with all operators set to be under public ownership by 2027, surely now is the time to reconsider how we procure trains for Great British Railways. Labour has a mandate for change. We can end the abuse of the British taxpayer inflating profits for privatised monopoly industries that should be publicly owned, including water, rail and energy. At least for rail we have begun the process of change.

To meet decarbonisation goals, the UK needs to upgrade up to 4,000 rolling stock units, which will cost tens of billions of pounds, so we will need a new financing model to meet those demands. With adequate planning, that could also mean ample orders to sustain our British-based train manufacturing industry and avoid the gaps in the order books we have recently seen at Alstom and Hitachi. I praise the Secretary of State and her ministerial team for the effort and energy they have expended in trying to seek a solution.

With Great British Railways, I urge the Secretary of State to ensure that ROSCOs do not continue to exploit the taxpayer and that we take back control of our rolling stock. The Great British public deserve better value for money. Public control of our train operating companies is the first step in delivering a better service. I look forward to working with my right hon. Friend the Secretary of State as we set out the finer details for Great British Railways. This is a transformative Bill for our railways—one of the most transformative Bills I have seen in my lifetime—and my right hon. Friend has my full support in delivering the modern and efficient rail service our country needs and deserves.

[Madam Deputy Speaker (Ms Ghani)]

I call Adam Jogee to make his maiden speech.

--- Later in debate ---

[Dr Mullan]

The challenge that Labour now has to face is whether they choose taxpayers or fare payers to meet the burden of the cost of the railways. In fact, in recent years we kept rail fare rises below inflation, and we have yet to hear a similar commitment from the Government.

The impact assessment on the policy is very clear about what the Government have committed to achieve: absolutely nothing. It says it in black and white, on page 3:

“specific quantified targets for each objective have not been set”.

So clearly that leaves us on the Conservative Benches to hold them to account. I have a number of questions that I hope the Minister can address in his closing remarks.

First, what will be the exact timetable for renationalisation? We might assume that the Government are rushing to do this so that they can begin with Greater Anglia and West Midlands Trains in September, but all they have said is that they want all the contracts nationalised by October 2027. The Minister will understand the uncertainty that will create for the sector, so can he confirm a more detailed plan to the House for making use of the powers they are asking for?

Secondly, what will be the approach on nationalising terms and conditions? The Minister will know there are a variety of working practices across the railway network, many of them clearly not in the best interests of passengers and taxpayers—for example, the varied approach on mandatory Sunday working, where clearly passengers would be better served by that becoming standard; or annual leave, where again passengers would experience less delays and cancellations if drivers were required to give a reasonable amount of notice. Will the Government introduce a standard contract that prioritises the terms and conditions across the industry that will benefit passengers and taxpayers, or will they be letting the unions dictate a standardised contract that puts the unions first and passengers last?

Thirdly, what plans does the Minister have to secure increased passenger numbers, by how much and by when? We have seen a huge increase in passenger growth since the introduction of the train operating companies. What will take the place of contract incentives to secure that growth in future?

Fourthly, on modernisation, people up and down the country have seen the explosion of technology into our workplaces, but all across the network modernisation is blocked and frustrated with demands of more money from the unions for the introduction of technology. What plans do the Government have, as they directly take over running the railways, to ensure that technological innovation can be implemented across the network without undue barriers or union demands getting in the way?

Fifthly, when it comes to funding, how will they be reallocating the theoretical money saved? They argue they will save £150 million from management fees. Reinvesting that across track and train would mean, in total, a 0.5% to 0.75% increase in the overall annual budget. They need to tell us what exactly it is they will be doing with that money that is apparently going to radically improve our railways.

Sixthly, what are the balance sheet implications? The franchising model allowed the purchase of new trains and other investments to be made with no impact on public debt. Will Labour be adding those costs to public debt in future as yet another excuse for their inevitable tax rises?

Finally, what are the Bill’s implications, direct or indirect, for open-access operators? Whatever the Government may say, I am afraid that the implication of their words and actions is that they do not want the private sector running train services, so are they going to turn their sights on those operators next? If they truly believe in what they are doing—if it is not just designed to appease the left wing of their party—they will have to justify their own inconsistency.

It seems pretty clear that this, the Government’s political priority, is the wrong approach at the wrong time. They should be focusing on getting their union backers to stop frustrating reform of our railways. They should be focusing on taking forward our plans for Great British Railways. They should, at the very least, be transparent with the public about the implications of this rushed plan for fares, punctuality and reliability. There is consensus in the House that a new way of working was needed, and we had begun the process of bringing that forward, but Labour Members are more concerned with re-fighting the political battles of the 1970s and 1980s. Whatever they may say, these are the same old ideas, this is the same old ideology, and this is the same old Labour party.

[Grahame Morris]

The hon. Gentleman is presenting an interesting proposal. He has talked of “evidence”. If we look back over the past few years, we see that 70% of train operating companies running train franchises in this country were Government-owned—owned not by the UK Government, but by the Governments of Germany, the Netherlands and Italy. Was this not dogma to prevent an evidence-based build-up around the east coast main line franchise, providing profit and an income stream?

[Dr Mullan]

Let me point out to the hon. Gentleman that we also saw an increase of more than 89% in passenger numbers on our railways, and a record level of investment. If taxpayers in other countries want to invest in our railway services, I welcome that. As the shadow Secretary of State said in her opening remarks, we have proved our lack of adherence to ideology by running, when necessary, a number of private sector operators. The point that the Labour Government have to answer is this: if they are so concerned about Avanti and other private sector operators, they have the necessary powers and could do that tomorrow. If they are so convinced of their ability to sort all this out simply through nationalisation—if they are so convinced that Avanti’s performance is one that requires them to step in—let them do it tomorrow. They are not in opposition any more, so they can take steps to do things that they criticise us for not doing.

However, I am afraid that this is the same old Labour: more government good, private sector bad; unions first, passengers last. We on this side of the House have seen it and heard it all before, and we will make sure that everyone knows what Labour has spent its time focusing on and what it has put first when legislating here, politics and ideology, instead of focusing on what will actually make a difference to passengers.

High Speed Rail (Crewe - Manchester) Bill (Instruction) (No. 3)

Grahame Morris Excerpts

Tuesday 21st May 2024 Commons Chamber

[Grahame Morris (Easington) (Lab)]

Thank you very much, Madam Deputy Speaker—I will respect your wishes. I had not intended to speak in the debate, so I apologise for being late. I serve on the House of Commons Transport Committee, along with colleagues who spoke earlier from the Government Benches. I also served on the HS2 hybrid Bill Committee that dealt with the section from Crewe to Manchester Piccadilly.

[Sir William Cash]

Is the hon. Gentleman actually involved with a Bill that is currently in existence, or is he suggesting that something should be done in respect of a Bill that is not the same as the Bill that was introduced in the first place?

[Grahame Morris]

My goodness, that is a complicated intervention—I am not sure that I am suitably qualified to answer it. I just thought that I might share some of my thoughts having served on the Bill Committee, without any particular axe to grind.

I served on the Bill Committee because I was asked to do so as a servant of the House, in order to consider the merits or otherwise of the various petitions. I do not know whether Members are familiar with the process. I am not suggesting for a moment that it is perfect, and I know that there are arguments for revising the hybrid Bill procedure, which is quite lengthy, but some right hon. and hon. Members have suggested—perhaps through a lack of understanding of the process—that it is a mechanism for steamrolling through opposition, and I can absolutely assure them that that does not happen. In fact, if anything, petitioners—who may be individuals, businesses, environmental groups, local authorities or groups representing commercial interests, such as the National Farmers’ Union—are given ample opportunity to make representations to the Committee through petitions, and then to speak to those petitions and articulate their arguments for mitigation, compensation and route variation.

[Jack Brereton]

Will the hon. Member give way?

[Grahame Morris]

I will, but I am conscious of time.

[Jack Brereton]

The hon. Member will know from Transport Committee visits that some of the commitments made in the hybrid Bill Committee have not been honoured. Does he share my concerns about that?

--- Later in debate ---

[Grahame Morris]

As well as having served on the hybrid Bill Committee, I serve on the Transport Committee, and part of that Committee’s duties is to scrutinise HS2 and hold the Rail Minister, who is responsible for the delivery of HS2, to account. Certainly, concerns were expressed to the Transport Committee that statutory undertakings and assurances were not honoured—at least not in the form in which they were presented to the Committee.

[Jim McMahon]

Will my hon. Friend give way on that point?

[Grahame Morris]

I will give way one more time, very briefly.

[Jim McMahon]

This was only separated out because, as in this debate, some tried to make out that residents were opposed to the project overall. However, my hon. Friend must have seen in the hybrid Bill Committee process that quite a lot of the opposition was about the operational performance of HS2 Ltd and the considerations for local people in construction traffic, delays and the rest of it, which probably could have been done much better.

[Grahame Morris]

I am grateful to my hon. Friend for that perfectly reasonable point. Indeed, it is certainly true of requests for variations to traffic in locations of construction sites and so forth. However, I only have a couple of minutes, so I do not want to be tempted on to the wrong track, as it were, and will just share a couple of thoughts.

I am a bit of a buff. I might be an anti-node, but I am familiar with the locations on the route.

This afternoon, those of us on the Transport Committee have been involved in the pre-legislative scrutiny of the rail reform Bill, and have been listening to representations from representatives of the Welsh Government and the sub-national transport bodies. They were commenting on the new structure and the new draft Bill, and there is general recognition—not just from Transport for the North in my region; we had witnesses from Midlands Connect and Transport East, as well as the Welsh Government—that there is a major transport infrastructure issue. For many decades, we have concentrated on north-south connectivity—principally on connectivity with the capital city. We have done that for sound economic reasons, but the case for east-west connections is supported vociferously by the metro Mayors of Manchester, Liverpool and West Yorkshire, and there are sound economic and connectivity arguments for addressing the need for those connections.

This mechanism is far from perfect. As a separate matter, the House should look at whether the pre-legislative scrutiny process can be truncated in some way to speed it up, but we must give petitioners—Members of Parliament, individuals and businesses—the opportunity to raise their concerns. Imperfect though the mechanism may be, and imperfect though I may be in advocating for it, it does have its merits when it comes to scrutinising major infrastructure schemes such as this one, so I will support today’s motion.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the Minister, I think the hon. Member for Easington (Grahame Morris) opened his remarks by saying that he might have been late for the debate. I can assure him that I have been told he was certainly in the Chamber at the beginning of the debate. Otherwise, I would not have let him speak. I call the Minister.

Oral Answers to Questions

Grahame Morris Excerpts

Thursday 16th May 2024 Commons Chamber

[Huw Merriman]

I promised my right hon. Friend from this Dispatch Box that the project would be delivered, and I continue to give him that assurance. I am sorry that there have been those delays. This week, I spoke to the team at some length about the station. My right hon. Friend knows that I will visit him at the station, and I will have some more concrete news for him then.

[Grahame Morris (Easington) (Lab)]

How reliable are the key performance indicators that the train operators are quoting, which the Rail Minister mentioned earlier? The Disability News Service reports that train companies are sending unreliable statistics from freelance mystery shoppers who pretend to be disabled and give overly positive feedback about the experience of disabled passengers. Does he share my concern about that, and what can he do about it?

[Huw Merriman]

Data from mystery shoppers, as the hon. Gentleman calls them, cannot be used unless those individuals have the disabilities that they claim to, but there are wider mystery shopping experiences that are undertaken. I will happily write to him—in fact, I will meet him, seeing as he is such a great man—and take him through the steps that are taken into account. I also thank him very much for doing what he always does, which is raising that matter with me last night, so that we could discuss it in advance.

Future of Rail Manufacturing

Grahame Morris Excerpts

Tuesday 23rd April 2024 Westminster Hall

[Grahame Morris (Easington) (Lab)]

I beg to move,

That this House has considered the future of rail manufacturing.

It is a pleasure to serve under your chairmanship, Sir Gary. I must declare an interest as a member of Unite the Union and chair of the Unite parliamentary group. I am also a member of the RMT and ASLEF parliamentary groups and I am on the Transport Committee.

For several years, industry organisations such as the Railway Industry Association, trade unions and manufacturers have urged timely action to prevent significant job losses in rail manufacturing here in the UK. The industry employs over 30,000 people in the United Kingdom and contributes at least £1.8 billion annually in gross value added. It is currently facing a very dangerous—indeed, critical—situation. The Minister, a former Chair of the Transport Committee, is very familiar with the situation. I have engaged with him on a number of occasions recently and in the Select Committee, so I am fully aware that he understands the nature of the problem.

In December last year, I raised an urgent question following evidence given to the Transport Committee by Nick Crossfield, the managing director of Alstom—Alstom is based in Derby. He impressed on the Committee the need for urgent action from the Government to expedite the bidding process for new British-manufactured trains. Four months later, it is clear that the Government have been too slow to prevent potential job losses at the Derby train manufacturer.

Similarly, I met workers at the Hitachi train manufacturing facility in Newton Aycliffe, next door to my constituency, who are also members of Unite the Union. They warned that we could see redundancies as early as June this year if the Government continue to drag their heels on extending the contract to build further trains for the west coast main line.

British railways are rooted in the north-east of England. The Stockton and Darlington railway was inaugurated in 1825 and was the world’s first passenger railway. It also linked the coalmines near Shildon in County Durham to the River Tees at Stockton, facilitating coal exports from Teesport. The Stockton and Darlington railway’s success, alongside growing demand for transport, spurred the development of a national railway network. The railways transformed Britain, enabling all social classes to travel further, and the network was developed to move coal from thriving collieries in County Durham to global markets. However, County Durham continues to struggle with the legacy of the loss of its coal industry, with limited skilled employment due to insufficient investment in levelling-up efforts, alongside a lack of a coherent industrial strategy under successive Conservative Governments.

In 2015, Hitachi opened a plant in County Durham, bringing skilled jobs to the region and reviving the north-east’s rail manufacturing tradition after 90 years. The 750 skilled jobs at Hitachi, and about 1,500 jobs in the supply chain, are fundamental to the success of the local economy.

Today, the excellent Sheffield Hallam University has released its “State of the Coalfields 2024” report, which shows evidence of a lack of jobs and businesses in the former coalfields despite recent growth. Job density in former coalfields is only 57 employee jobs per 100 working-age residents; that compares with a national average of 73 jobs per 100 residents, and an average in major regional cities of 88 jobs per 100 residents. There is a disparity, and a long way to go.

The report from Sheffield Hallam illustrates, as clear as day, the ongoing struggle for prosperity in former coalfield communities.

[Mr Kevan Jones (North Durham) (Lab)]

Would my hon. Friend agree that the issue is not just the number of jobs that 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. That helps not only Hitachi but the regional economy.

[Grahame Morris]

Absolutely. My right hon. Friend makes an excellent point about the broader benefits to the economy. Indeed, the loss of rail manufacturing in County Durham or Derbyshire would devastate their respective regional economies and threaten British rail manufacturing.

Alstom, Hitachi, Siemens and CAF—Construcciones y Auxiliar de Ferrocarriles—remain the only train manufacturers in the UK. A similar situation arose with the steel industry. To a reasonable person, it would seem illogical for the Government to permit the UK to lose its capacity to build trains, especially as our existing network is in need of modernisation.

The Minister and I have fenced about the age of the rolling stock and trains, but the UK still operates trains built before privatisation, with the average age of trains on the Chiltern line estimated to be 30 years; that was in March last year, from the Office of Rail and Road report. Additionally, nearly half all operators use trains over 22 years old. The Railway Industry Association has urged the Government to upgrade or replace approximately 2,600 vehicles by 2030, and to renew around 1,650 diesel trains that will be 35 years old after 2030.

The industry-wide consensus is that our rolling stock is outdated and inefficient. Therefore, my question to the Minister is: why are the Government not protecting British rail manufacturing, especially given the rising demand for new trains to enhance the passenger experience and to meet our net zero targets? In relation to our environmental targets, all 2,898 diesel and 912 bi-mode trains in the UK emit carbon dioxide and nitrogen oxides, with nitrous oxide—N₂O—having various health impacts and being up to 280 times more potent than CO₂ in warming the planet over a 20-year period. That is according to the latest Intergovernmental Panel on Climate Change report to the United Nations.

To achieve net zero by 2050, a solution must be found to replace diesel trains, which are currently used by 14 operators—especially since only 38% of the network is currently electrified. My constituents, who travel on unreliable, second-hand ScotRail Sprinter trains—no offence to my friend from Scotland, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands)—built in the 1980s, find it inconceivable that the rolling stock companies’ profits are sky high while our UK-based rail manufacturers are crying out for orders. Taxpayers are forced to travel on substandard trains purchased with Government funds, while subsidies remain at twice pre-pandemic levels. The system is inefficient and does not serve the taxpayer or the travelling public.

There are needless links in the chain. The Government should streamline the system by directly purchasing trains and bypassing the ROSCOs or rolling stock companies. Indeed, RMT president Alex Gordon and general secretary Mick Lynch have been vociferous, voicing concerns about leasing costs, which have risen by over 30% over the past five years while rail industry staff costs have remained static.

A decade ago, leasing rolling stock accounted for about 13% of train operating companies’ costs; today, it accounts for 25% or a quarter. Does the Minister think that is fair or are the Government protecting profits when other areas of the network, including the staffing elements, are facing dramatic cuts?

Clearly, there is something wrong with how we procure rolling stock in Britain. Despite needing modern, carbon-neutral and sustainable trains, the Government have ignored warnings from both Alstom and Hitachi. The Rail Industry Association warned the Government that recent administrations have been a “canary in the coalmine” before the potential decimation of train manufacturing in the United Kingdom. Unite the Union warns that the industry’s performance relies heavily on Alstom Transport and Hitachi Rail, which hold 55.3% of market share.

The industry’s fate is dependent on key players like Hitachi and Alstom. However, recent forecasts indicate a bleak outlook, with revenues projected to decline at a rate of 8.1% annually over the next five years. Hitachi and Alstom face challenges, as their order books require clearing past orders before they can commence construction and setting up production lines for the HS2 trains, which are currently 18 to 24 months behind schedule.

Government intervention must go beyond rhetoric to provide tangible support to the industry. We are not asking for a bail-out—just a commitment to honouring existing contracts, and to establish a sensible industrial strategy for the industry. Beyond extending existing contracts, a focused industrial strategy is imperative. Research conducted by Make UK reveals that 99% of manufacturers support the need for an industrial strategy. Six in 10 cite the lack of an industrial strategy as a factor affecting growth in the manufacturing industry. Some 87% believe a strategy would provide their businesses with a better long-term vision on which to decide investment in future employment plans. To prevent another Alstom or Hitachi scenario, we must reassure the industry that the Government are prioritising its interests. I am hopeful that the Minister is going to give us some positive news, but the consequences of inaction are dire. Jobs and livelihoods are at risk, and it is time now for some decisive action.

The industry requires a steady stream of orders to sustain manufacturing and maintenance bases, alongside a proactive approach to replacing retiring engineers. We must abandon costly leasing, opting for direct purchases through Government procurement to bolster UK train manufacturing, which must be central to a long-term rail and industrial strategy, driving economic growth, innovation, and meeting our future transport needs.

[Several hon. Members rose—]

--- Later in debate ---

[Grahame Morris]

The hon. Member is making some excellent points. On ROSCOs, I remind hon. Members that in the current year, I believe that they are making in excess of £400 million in profit.

[Gavin Newlands]

I would not disagree with the hon. Member on that.

To continue on ROSCOs, nobody has ever satisfactorily explained why we continue to have a system whereby rolling stock companies, which are all owned by private equity and investment funds, are the primary owners of multiple units, locos, passenger carriages and freight wagons, rather than the taxpayer, who ultimately pays for them. ROSCOs are generating almost risk-free profits for their owners, which are almost exclusively overseas funds, because ultimately, private rail operators have the Department for Transport as an operator of last resort. They were gifted BR stock at a bargain price and have spent the last three decades coining it in every time a new fleet is needed for an operator. That is just one example of the billions leaking out of the system to private finance that could instead be invested in the public rail network or in a sustainable and properly managed rolling stock procurement programme.

To conclude, the current model has failed. It was failing 30 years ago, it has failed since then, and it will continue to fail for the next 30 years unless this issue is specifically addressed in any rail reform package that is brought forward by this Government or any future Government.

--- Later in debate ---

[Grahame Morris]

Thank you, Sir Gary, for the exemplary way in which you have chaired the debate. I thank the Minister for his thoughtful and considered responses. We are all aware that he knows the solutions to the problem and we seek to push him to make the decisions that are required in the interests of retaining those jobs, directly and in the supply chain, as quickly as possible.

I thank my right hon. Friend the Member for North Durham (Mr Jones), my hon. Friends the Members for Portsmouth South (Stephen Morgan), for Stockton North (Alex Cunningham) and for Ilford South (Sam Tarry), as well as my colleagues and comrades from the Transport Committee, the hon. Members for Paisley and Renfrewshire North (Gavin Newlands), for Milton Keynes South (Iain Stewart), and for Sedgefield (Paul Howell). I particularly thank the respective Front Benchers for their responses.

Without action, we will be modernising or replacing our trains with imported units using taxpayers’ money to support thousands of jobs and apprenticeships overseas rather than in the UK. We implore the Minister to act, and to preserve the excellent jobs that we have in our existing manufacturing centres.

Question put and agreed to.

Resolved,

That this House has considered the future of rail manufacturing.