Refurbishing Trains: Contracts

Huw Merriman Excerpts

Thursday 7th December 2023 Commons Chamber

[Grahame Morris (Easington) (Lab)]

(Urgent Question): To ask the Secretary of State for Transport if he will make a statement on expediting the contract process for refurbishing existing UK trains.

[The Minister of State, Department for Transport (Huw Merriman)]

I thank the hon. Member for his question, which I will answer on behalf of the Secretary of State. The Department works closely with rolling stock owners and train operators to understand when new and refurbished trains are likely to be required, and to ensure a regular flow of work for train manufacturing companies. Trains are major assets, with a lifetime of 35 to 40 years, so there will naturally be peaks and troughs in procurement cycles. The average age of the current fleet is 17 years.

The Department has overseen the procurement of more than 8,000 new vehicles for the Great British mainline railway since 2012. Some of those are still being produced, including Alstom trains for South Western and West Midlands trains. Passenger travel habits have changed over the past three years, and while numbers are showing signs of improvement, we are still seeing reduced passenger revenue on the railway. We are aware that Alstom is facing difficult trading conditions. It is consulting its unions and employees on possible job losses. While it must be a commercial decision for Alstom, the Government have been working with the company to explore options to enable it to continue manufacturing at its Derby site. Officials from my Department and my right hon. Friend the Secretary of State for Transport have held regular meetings with senior management at Alstom. We have also convened a cross-Whitehall group to advise on ways to support continued production at Derby and how best to support those workers who could lose their jobs.

The fact remains that the market for passenger trains is competitive. The Department cannot guarantee orders for individual manufacturers. None the less, we expect substantial continued demand for new trains. Last month, LNER confirmed an order of 10 new tri-mode trains for the east coast main line, and on Monday, a tender for new trains for the TransPennine Express route was launched. Contract awards are also expected between late 2024 and early 2025 for major orders for Southeastern, Northern and Chiltern. In the meantime, the Government will continue to work with Alstom and other UK manufacturers to ensure a strong and sustainable future for the rail industry.

[Grahame Morris]

Thank you, Madam Deputy Speaker, for granting this question on a matter of some urgency. I thank the Minister for his response, and I must impress upon him and the House that the Secretary of State must expedite the contract bidding process for updating existing UK trains to ensure the survival of the UK-based train manufacturing industry. Without immediate plans to allow companies to bid for new contracts, make no mistake, thousands of skilled jobs in the UK will go. The urgency stems from the crucial role of the Alstom factory in Derby. It is the UK’s only end-to-end, design, build and test train manufacturing facility, making it integral to the UK’s rail manufacturing industries.

Some 3,000 people currently work directly at Alstom, and 15,000 jobs in the supply chain rely on the factory’s continued production. Nick Crossfield, Alstom’s managing director, gave evidence to the Transport Committee yesterday, and he was absolutely clear that the Government need to decide now on how and where they want trains to be made in the future. If this Government do not expedite the bidding process, trains will not continue to be manufactured in the UK. They will start to be manufactured in North America, South America or south- east Asia.

Alstom’s current and final contract for rolling stock is on the Elizabeth line and is due to expire in six weeks. That could mean an end to the rail manufacturing industry in the UK as we know it. Yesterday, I met Unite the union, of which I am a proud member, and rail workers from Alstom site in Derby, and they asked for our help in retaining their jobs. Also just yesterday, two of the supply chain companies that supply Alstom went into liquidation due to the uncertainty over future orders from the Alstom factory. Timing on this issue has never been more crucial.

[Huw Merriman]

May I again thank my friend the hon. Member for Easington for raising this important issue? This is a matter of grave concern. The site has been operating in Derby for many years. Indeed, I think he and I both went to that site when it was formerly owned by Bombardier as part of a Transport Committee delegation. That support is assured. I also make the point that I am meeting Unite the union next week. It has been in touch, and I will be pleased to work with it and everyone to see what more can be done to keep that plant open.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Chair of the Select Committee.

[Iain Stewart (Milton Keynes South) (Con)]

I know that the Minister is a great advocate of the work of the Transport Committee, and I strongly urge him to look at the transcript of the evidence we received yesterday from not just Alstom but others in the rail industry. The fact is that the medium and long-term prospects for the sector are positive. What we are facing is a short-term lull. I impress on him the urgency of working with the rolling stock companies—ROSCOs—and others to try to bring forward some refurbishment contracts that Alstom and others can bid for to help smooth out these peaks and troughs in the sector.

[Huw Merriman]

I thank my hon. Friend, the Chair of the Select Committee, for the work he does—that evidence session was particularly pertinent for highlighting the matters he allows that Committee to raise. I can assure him that the Secretary of State wrote to rolling stock owners in September to encourage them to discuss with train operators and manufacturers opportunities to ease short-term challenges in the supply chain, such as refurbishments or major overhauls. We recognise the issue, and have asked others to do their best to deliver on that.

[Rachael Maskell (York Central) (Lab/Co-op)]

I declare that I am a member of Unite the union, and met with trade union members yesterday. The urgency of this matter cannot be overstated—the clock is ticking, and those jobs will be consulted on in the very near future if contracts cannot be found. The Minister wrote in September, but what has he been doing over the past three months to bring forward contracts that will enable the plant to remain open?

[Huw Merriman]

As I have mentioned, we have written to ask rolling stock owners what more action they can take. Just on Monday, I was up in Yorkshire for the announcement of an extra £3.9 billion in funding for the TransPennine route upgrade. That also starts the tendering process for new rolling stock—29 new trains, with an option for another 26—and as I mentioned, we are looking for the tendering process for Southeastern, Chiltern and Northern to go forward as well, so orders are being put into the pipeline for train manufacturers.

[Greg Smith (Buckingham) (Con)]

From the generous time he has given me on this subject, my hon. Friend will know that overcrowding on the Chiltern line persists to a very serious degree, because the age of the rolling stock regularly leads to Chiltern having to run very short trains on the main line—trains that some people cannot even get on in the first place. As he looks at this important subject, will my hon. Friend do all he can to ensure that Chiltern can get trains refurbished and get new trains into the pipeline as soon as possible?

[Huw Merriman]

My hon. Friend is a champion for the Chiltern line, and he does indeed bend my ear on that subject—he is right to do so, because that line is getting busier now, which is a positive. That tendering process will be brought into being next year: we want to see Chiltern trains, and that process should allow them to be delivered.

[Ian Mearns (Gateshead) (Lab)]

We are not asking the Secretary of State to give one company special treatment over another—I should say that I am also a member of Unite the union—but I believe that the retention of British manufacturing capacity has to be regarded as strategically important for the United Kingdom. Will he allow us to go forward by granting all companies the opportunity to bid on new rail upgrade plans, such as Crossrail, Southeastern, and even the extensive Network North plans? Time is of the essence, and swift action from the Government can make a significant difference in securing the future of the UK rail manufacturing industry.

[Huw Merriman]

I can give the hon. Member that assurance. We will be bringing those contract tenders forward; we now have four train manufacturers, which is to be celebrated. We have CAF in south Wales, we have Hitachi up in the north-east, we have Alstom—of course—in Derby, and now we have Siemens in Goole. All those manufacturers are bidding, and the hon. Member is absolutely right that there must be a fair process for all, which will take place.

[Simon Fell (Barrow and Furness) (Con)]

It is not that long ago that we had the hated Pacer trains on the Furness line. We were very glad to see the back of those, but of course a new, shiny train is no good if it is not running. The Minister mentioned that if we are not seeing customer demand, that is going to hurt the industry, so could he speak to what the Government are doing to improve customer service and get the level of train service back up to where my constituents hope it will be?

[Huw Merriman]

We are aware that performance needs to be a lot better than it is currently, not just from train manufacturers but from Network Rail. Indeed, I was due to meet with the train operators this morning to discuss that issue; obviously, I have had to move that meeting, but I am very happy to meet with my hon. Friend so that I can take his particular points into account. We need to do more.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

[Simon Lightwood (Wakefield) (Lab/Co-op)]

The Alstom Litchurch Lane factory in Derby has been building trains for over a century, since the dawn of train travel. It has provided high-skilled jobs for the local community for generations and helps support other local companies that form part of its supply chain, and as Britain’s biggest train-building plant, it plays a pivotal role in supporting the growth of the midlands and our country’s manufacturing sector.

Following the Government’s chaos and indecision over HS2 and the lack of a long-term strategy, hundreds of highly skilled jobs at the plant are at risk, with no confirmed workload beyond the first quarter of 2024, and contracts to build trains for HS2 pushed back until 2026, creating a gap in orders. This news will be deeply worrying for those affected and their families in the run-up to Christmas. It will also be extremely concerning for local businesses that rely on the factory and the wider rail sector, and for the people of Derby.

The workers at Alstom have only days to get a decision out of the Minister before their livelihoods are put at risk—time is up. They deserve to hear from the Minister how this has been allowed to happen, and what action the Government are taking to pursue a deal to secure the Derby plant and ensure that as many jobs are protected as possible. What urgent clarity can the Government provide Alstom on the short-term rolling stock pipeline, including possible refurbishments?

I am pleased that the Minister confirmed that he will be meeting representatives from Unite the union, and I hope that he will commit to working with them to safeguard jobs. When can the factory finally get certainty on HS2 orders, so that it can plan for the future and secure jobs? How many more rail manufacturing jobs across the country are at risk following the Government’s recent decision on HS2?

Earlier this year, Derby was named the Government’s home of Great British Railways. Just seven months on, the future of its landmark factory is in danger. At the heart of this is the chaos and indecision of the Conservative party. The Minister owes the people of Derby and the country an explanation of what he plans to do to stop the Prime Minister’s HS2 fiasco leading to more job losses.

[Huw Merriman]

I will, if I may, deal with the matter of HS2 head-on. The shadow rail Minister made that same point, saying that this was somehow linked to HS2, and it has now been made from the Dispatch Box today. The Secretary of State responded to the shadow rail Minister, so I shall put this on the record. With regard to HS2, he said:

“I can assure you this is not the case. Alstom is part of a contract with Hitachi to design, build and maintain HS2 trains for Phase One only. Phase One of HS2 between Birmingham and London will continue”.

That position has been reiterated by Alstom’s chief executive. I gently point out to the hon. Member for Wakefield (Simon Lightwood) that this has nothing to do with HS2; that has been established, and it is erroneous to claim otherwise.

The hon. Member also has to bear in mind that we now have four train manufacturers. We cannot just award a contract to one manufacturer; there has to be a fair tender process for all the jobs across all four plants. The Department for Transport has won a case brought by one of the other train manufacturers, demonstrating that our tendering process is fair.

[Martin Vickers (Cleethorpes) (Con)]

My hon. Friend referred in his opening statement to a new order from TransPennine. He will be aware that there is severe overcrowding on the Cleethorpes-Manchester-Liverpool service, because the trains have been reduced from six carriages to three in recent months. Can he enlighten me as to when the new stock will be coming forward, as it will greatly please my constituents?

[Huw Merriman]

I hope my hon. Friend’s constituents will be comforted by the order, because it is not just an order for new TransPennine express trains but a complete upgrade of the TransPennine route. The UK Government are spending more money on the TransPennine upgrade than was spent on the Elizabeth line, and that will mean delivering a better service. I was with the managing director of TransPennine trains on Monday up in Yorkshire and we were discussing just that. We need to improve the service and the rolling stock.

[Wera Hobhouse (Bath) (LD)]

Upgrades to our trains must include electrification, but electrification is at a standstill, with only 101 miles of track being electrified this year. East West Rail will not be electrified as standard, and dirty diesel trains are still going through Bath. Will the Minister commit to a long-term plan for electrification?

[Huw Merriman]

The Prime Minister’s Network North plan did just that—electrification for Hull, between Sheffield and Manchester, and between Sheffield and Leeds. They are vast projects, not small projects. With regard to East West Rail, that is the upgrade of an existing line, which has its bridge sizes all the way through from Winslow to Bletchley, so it is difficult to put electrification on to that part. Let me remind the hon. Lady that there has been more than 1,200 miles of electrification in the past 12 years compared with just over 60 miles in the 12 years before that. I think that is a pretty good record.

[Rachel Hopkins (Luton South) (Lab)]

I, too, have met workers from the Alstom plant in Derby and, as a Unite member myself, representatives of Unite as well. It was pleasing to hear that workers, representatives and management are united in their desire to retain good, high-skilled manufacturing jobs and train production there. I want to press the Minister again about recognising the importance of retaining the only end-to-end train production facilities in the UK during this short-term blip in production, so to speak. Does he agree that this investment in public transport is vital if we want to tackle the net zero challenges we face?

[Huw Merriman]

The hon. Lady is correct: that is vital. The challenge, and it is a good challenge, is that we now have four manufacturers, and we need to help them with international orders. That is why I sometimes go abroad with trade envoys from those companies to export around the globe. The average age of our rolling stock is down to just under 17 years—six years ago, it was 20 years—and as it gets fresher, there is a challenge with pipelines as well. However, we are bringing contracts forward so that we can fill the order book better.

[Mr Toby Perkins (Chesterfield) (Lab)]

As a Derbyshire Member of Parliament, I can tell the Minister that there is huge concern about the future of Alstom. I think it is perfectly reasonable to say that the Government have lacked strategic direction on rail. They have gone from one project to another, and in the last few years there has been no sense of an industrial strategy. When we have had these debates in the past, Ministers were always blaming the EU and saying we could not support British manufacturing because of the EU. We are now out of the EU, and it seems to me that countries such as Germany are much better at supporting their manufacturing. Can we have a real sense of urgency from the Minister and an indication that the Government are going to make sure, strategically, that these jobs are saved?

[Huw Merriman]

I assure the hon. Member that the Secretary of State in particular has been meeting Alstom, and our officials and our director general meet Alstom, including with representatives. I will be doing so on Tuesday week. We will do everything we can to assist, but this is a commercial matter for the operator. As I have mentioned, I have been to that plant with the Transport Committee and seen what it does for the workforce and for the supply chain. We will be doing everything we can to assist Alstom in keeping that plant open.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his answers. With many of my constituents dependent on Government help and support for manufacturing industry, I can well understand union fears at the dithering and the effect on the workforce. It is necessary to refurbish a number of trains, so can the Minister outline how the Government will ensure that the much-needed refurbishment contracts can be organised to keep people in work, rather than paying out redundancy money to them only to rehire them six months later when things are arranged properly? That is the desire of every Member of this House.

[Huw Merriman]

Yes, indeed. As I have mentioned, we are bringing forward orders, and the Secretary of State has written to the companies that finance train manufacturing and refurbishment to ask what more they can do to bring forward that refurbishment. At the risk of repeating myself, the challenge we have, and it is a good challenge, is that we have four fine train manufacturers and we have rolling stock that is younger than it previously was. So the aim is to try to get orders out, which we are doing, but I reiterate that it is also important that we help our train manufacturers export orders across the globe so that they can manufacture not just for home but for abroad, and keep those jobs going.