Rail Manufacturing: Job Losses

Huw Merriman Excerpts

Tuesday 16th April 2024 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

(Urgent Question): To ask the Secretary of State for Transport if he will make a statement on steps being taken to prevent job losses in the UK’s rail manufacturing sector.

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

Mr Speaker, before I start, may I thank you for having me up in your constituency of Chorley over the Easter holiday? I pass on my deepest condolences to you and your family for the loss of your father.

I thank the hon. Lady for her urgent question. I am responding on behalf of the Secretary of State, who will shortly be meeting the Alstom group chairman and chief executive to discuss a potential way forward. The Secretary of State will come to the House and make a statement at the appropriate time, noting the fact that they are sensitive commercial discussions.

As set out in the comprehensive open letter from the Secretary of State to the hon. Lady on 29 March, the Government are well aware that companies such as Alstom and Hitachi face short-term gaps in their order books. The letter set out clearly that these are complex problems to which there are not simple solutions, but the Government have been doing everything they can to support the workforce over many months, and continue to do so.

While Alstom is currently consulting its unions and employees on possible job losses, this 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. We have convened a cross-Whitehall group to advise on how to support continued production at Derby and how best to support those workers who are at risk of redundancy. We have held similar discussions with Hitachi, both in correspondence and face to face. We remain keen to work with Hitachi as it looks for commercial solutions to guarantee the long-term sustainable future of its Newton Aycliffe site. Hitachi is not currently consulting on any changes to its workforce.

The fact remains that the market for passenger trains is a competitive one. The Department cannot guarantee orders for individual manufacturers. Trains are major assets with a lifetime of 35 to 40 years, so there will naturally be peaks and troughs in the procurement cycle. Nevertheless, we expect substantial continued demand for new trains. In recent months, London North Eastern Railway confirmed an order of 10 new tri-mode trains for the east coast main line. A tender for new trains for TransPennine Express was launched in December 2023.

In January this year, I wrote to train manufacturers to outline the pipeline of current and expected orders for new trains. That included details of current competitions for Northern, Southeastern, Chiltern and TransPennine Express, and an expected procurement by Great Western Railway. The contracts are worth an estimated £3.6 billion, with more than 2,000 vehicles to be procured over the coming years. In the meantime, we will continue to work with UK manufacturers, including Alstom and Hitachi, to ensure that there is a strong and sustainable future for the rail industry.

[Louise Haigh]

May I add my personal condolences to you, Mr Speaker, for the loss of your great father? He was a fine man and a great champion for Warrington and for workers’ rights.

Britain’s rail manufacturing is in crisis. Two of our largest train manufacturers have warned that their very presence in this country is at risk. Alstom, in Derby, is staring down the barrel of 1,300 job losses, and Hitachi, in Newton Aycliffe, another 700. In their supply chains, it is more than 16,000 jobs. Alstom has been making trains in Derby for 147 years, but both Alstom and Hitachi are clear that their uncertain future is thanks to this Government’s inaction. Alstom’s managing director has said that “continued delay” in providing “certainty and clarity” from the Transport Secretary is to blame.

The fact is that the Secretary of State has known about this problem for months. I first raised Hitachi’s concerns with him in this House more than a year ago. Both manufacturers have said that the situation could be rectified by amending their order schedules for a small number of existing, privately financed trains, and we understand that the Transport Secretary has been privately promising them action on that for months. But crucial deadlines have been missed, avoidable job losses have already been made and local businesses have already been forced to close.

The Minister dismisses people’s livelihoods as “peaks and troughs”. In his letter to me of 29 March, the Transport Secretary, as usual, ducked all responsibility. He claimed that he has no influence over procurement contracts, yet his Department has varied contracts in the past. He claimed that this is nothing to do with his mismanagement of HS2, but both struggling manufacturers claim otherwise. He claimed that he is providing certainty for the industry, yet he is refusing to bring forward his long-delayed rail reforms, or set out a rolling stock strategy for the industry.

Britain was the country that created the railways, but that legacy is being trashed by a Conservative Government content to oversee its managed decline. Will the Minister and the Secretary of State finally take responsibility, put aside their ideological opposition to supporting British business, and finally step up for the people of Derby and Newton Aycliffe and for Britain’s railways?

[Huw Merriman]

The hon. Lady asks whether the Secretary of State will take responsibility and work on this matter. He is doing that right now. He is about to start a meeting with the chief executive and chairman. And that is not the first meeting: he has held eight meetings with Alstom and eight with Hitachi to find solutions. Our officials in the Department for Transport have worked incredibly hard, as has everybody in the whole Derby family—the train operator, the unions that I have met and the workforce. We are all rowing together to try to find a solution.

I have to say that it does not help to see this cause being used almost like a political football. As an example, I did not use the expression “peaks and troughs” when it came to dealing with individuals. I said that the procurement cycle leads to that. My words will be clear in Hansard, and I resent having them misinterpreted, because it impacts on people and their feelings. I find it quite irresponsible of the Opposition to do that.

Another example of getting the facts completely wrong is the continued mention of HS2. Let me be clear: the order for HS2 was for 54 trains. That order remains at 54 trains, because they were always for phase 1, which is going ahead. The schedule remains the same and the number of trains remains the same, so let us deal with the facts rather than the fiction and scaremongering that I hear so often.

When it comes to facts, let me say that three of the four train manufacturers we are proud to have in this country have been building their plant here since 2010, under this Conservative Government. No doubt they decided to do so because we have commissioned 8,000 new rolling stock vehicles since 2012. The average age of rolling stock was 21 years back in 2016; it is now under 17 years, because we are investing in rolling stock, and there will be more orders. None the less, it is a complex legal solution that requires sensible minds, and I am very proud that the Secretary of State is leading on that endeavour.

[Mr Speaker]

I call the Chair of the Transport Committee.

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

I am pleased that the Secretary of State and the Minister are taking charge of negotiations with Alstom, Hitachi and others. I appreciate that as commercially sensitive discussions are ongoing, the Minister is constrained in what he can say, but they need to be resolved soon. The wider issue is the peaks and troughs not just in rolling stock procurement, but in railway industry investment more generally. How does the Minister believe Great British Railways and wider rail reform will help to smooth out the peaks and troughs in the longer term?

[Huw Merriman]

I thank the Chair of the Select Committee for his work. The Committee as a whole has looked at this issue and really probed for solutions. On the GBR point, it is also providing the body of pre-legislative scrutiny of rail reform, and I thank my hon. Friend and his Committee for their work in that endeavour. He is absolutely right that a more holistic approach to the railway, in which track and train are integrated, will help us to make further decisions into the future and give more certainty with regard to orders. None the less, I have set out the orders that have been taken over the preceding years. The order book is healthy and we will look to get the tenders out this year and next for the train operators that I have mentioned.

[Mr Speaker]

I call the SNP spokesperson.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

My condolences to you and your family, Mr Speaker, on the loss of your father.

Clearly, the news coming out of Derby about the precarious nature of Alstom is grim, not just for the workers and the wider economy of Derby, but for everyone involved in the supply chain across the country, including 24,000 rail supply jobs in Scotland. The fact is that this was predicted; we have all known about it for months. These are skilled, well-paying jobs of the type that we are continually told the UK is in the market for.

Does the Minister accept that the stop-start procurement of new rolling stock is a direct result of the fragmented and disconnected railway system that has placed financialisaton and the Treasury’s miserly attitude to investment above rail’s key role in a decarbonised 21st-century society? Why are rolling stock leasing companies ruling the roost rather than straightforward procurement? How is it possible that the island that invented the modern railway—the 200th anniversary of the Stockton and Darlington railway is next year—could have next to zero train production capacity within a matter of months? We need a proper rail strategy and integration; when will that rail reform be put before the House?

[Huw Merriman]

Again, let us look at the facts. Since 2012, 8,000 new rolling stock vehicles have been manufactured—that is out of a total fleet of 15,600, so it is a relatively young fleet. Taking into account the fact that the fleet tends to last 35 to 40 years, and that it now has an average of 17 years’ service, I hope that the hon. Gentleman will see that there has been a substantial investment in rolling stock from the Government—the UK taxpayer—and from private train operators.

The hon. Gentleman asks when the legislation for rail reform will be brought forward. I am very keen for that to happen, and it is on its journey right now. The Transport Committee, of which he is a leading member, is providing the pre-legislative scrutiny. I very much hope that the Committee will finish its work in time for the summer recess, giving us two months to respond, and that there will be cross-party support in both Houses for what is I believe is sensible legislation that will allow us to deliver rail reform.

[Mrs Pauline Latham (Mid Derbyshire) (Con)]

Although Labour is playing party politics on this issue, it is really important for Derby and Derbyshire, including for the workers at Alstom and in the supply chain that feeds into it. Will the Minister confirm that Conservative Members of Parliament have been working with the Secretary of State over the whole period, and that he has been working with Alstom for many, many months to get this right?

[Huw Merriman]

I thank my hon. Friends the Members for Mid Derbyshire (Mrs Latham) and for Derby North (Amanda Solloway) for the amount of work that they have put in to press us, privately but firmly, to ensure that we are working on this issue, given their concern as constituency MPs. I could not credit them enough for the amount of work that has gone in on their side, and for doing it sensibly—and that includes those in Derby council, to whom we are grateful. I believe that this is the way to approach the matter. The number of meetings that we have had, the cross-departmental taskforce that is in place and the sheer number of hours that the officials have put in have all led us to a point where we very much hope to be able to provide a solution. The matter is complex—there are legal challenges and these types of contracts often end up in litigation, so we have to be careful with the process—but we are keen to find that solution. I thank my hon. Friends for their work.

[Dame Margaret Beckett (Derby South) (Lab)]

I was disappointed and sorry to hear what the hon. Member for Mid Derbyshire (Mrs Latham) just said, because, as she knows perfectly well, there has been a substantial amount of cross-party working on this issue over many months and years. Given that the factory is in my constituency, I find it a little disappointing that, although I am told that there have been many meetings between the Secretary of State and local Conservative members, at no point have he or his office chosen to involve me.

However, that does not matter at all; what really matters—and what I find most difficult about this whole issue—is that, over the years that I have been in this House, we have had so many of these conversations about failing industries. We ask what are the prospects for the future, and there is a struggle and, as always, an argument between those who want to look to the long term and those who want short-term financial savings. This is not an industry in which that is the problem. In the longer term, there will be millions of pounds’ worth of orders for rolling stock, because rolling stock renewal is needed right across the country, as everybody in the rail industry is aware. It is an industry with prospects and an ongoing, realistic vision of secure, high-value and high-reward jobs, yet one in which Government inaction is, I am afraid, putting those jobs at risk, particularly, as was said moments ago on both sides of the House, in the supply chain.

[Huw Merriman]

I thank the right hon. Member for the points she has raised. The discussions have been cross-party: the leader of Derby council has worked very closely with the Department to try to broker a solution. I will take away her point about meetings; I do not have that information to hand, but I will ensure she gets the meeting she has asked for.

The point I was making was that the comments from the Labour Front Bench do not help matters at all. This is a sensitive, commercially and legally challenging situation that we are trying to find a way through. We cannot find contracts just for one train manufacturer: we have four, and it has to be an open process, otherwise the matter ends up in court. Despite that, we are doing everything we can to find the right orders for those train manufacturers. As well as the letter I have written to all of the manufacturers, specifying the tender pipeline that is to come, the Secretary of State has written to all the entities that finance train operators, making the point that they should bring forward matters that they can see. That will help with refurbishment, as well as new rolling stock.

[Jason McCartney (Colne Valley) (Con)]

I thank the Rail Minister for the huge levels of rail investment going into my constituency. As he knows, alongside my hon. Friends the Members for Dewsbury (Mark Eastwood) and for Penistone and Stocksbridge (Miriam Cates), we secured £48 million of levelling-up cash for upgrades on the Penistone line, with stations at Honley and Brockholes in my constituency. I thank the Rail Minister for visiting Huddersfield railway station last year, and I am pleased to report that a major upgrade, which is part of the £11 billion trans-Pennine route upgrade, is under way at that station. Once that is complete, there will be major upgrades to Slaithwaite and Marsden stations, including disabled access. Rail investment is being delivered to my wonderful part of West Yorkshire.

[Huw Merriman]

I thank my hon. Friend; he is a champion of the railway, and it was an absolute delight to visit him at Huddersfield station and talk about some of those projects. Of course, his point is completely relevant to the matter before us. The trans-Pennine route upgrade, for which there will be more Government investment than there was for the entirety of Crossrail, allows us to put an order in for TransPennine Express trains, so there will be more trains manufactured as well as better stations, longer platforms and more resilience. [Interruption.] I thank that team, which is doing a brilliant job, which The Sunday Times has highlighted. Rather than chuntering, it would be nice if the Opposition thanked those who deliver railway projects to time and on budget.

[Grahame Morris (Easington) (Lab)]

My condolences on your loss, Mr Speaker. I thank you on behalf of the workforce for granting this urgent question, because the situation is becoming critical.

My union, Unite, tells me that there are over 900 people employed on temporary contracts at Hitachi in Newton Aycliffe and at Alstom in Derby whose jobs are already at risk. This is before any formal redundancies occur; Unite believes that that could happen as soon as June. I am well aware that the Minister knows that the industry needs a steady stream of orders to sustain train manufacturing here in the UK and preserve those vital jobs in areas such as County Durham, where we do not have an abundance of skilled employment, so in all honesty I earnestly ask the Minister to use his good offices to persuade the Secretary of State to intervene urgently and ensure a bright future for this vital UK train manufacturing industry.

[Huw Merriman]

I certainly take that point from my good friend. The hon. Member has worked tirelessly for the rail workforce, and I know that he means everything he says with passion and conviction. I have talked about the situation being a complex one from a legal perspective, and I would take him back to the contract award for HS2, which went to Alstom and Hitachi. That was challenged in court by Siemens; the Department succeeded on every single point, but that just shows how careful we have to be from a legal perspective during the tendering process, because it will end up in litigation. The worst thing would be to hand out contracts in a manner that is not legally fair and then find that they are being unpicked, which brings fresh uncertainty. Instead, we are looking at the entire order book to see where we can bring matters forward in the pipeline—matters that Alstom may be working on already. Where it is the fair and right thing to do, we are looking to see whether we can bring those contract orders forward in the pipeline.

[Maggie Throup (Erewash) (Con)]

The situation at Alstom is of great concern to a number of my constituents who work there. However, probably even more of my constituents work in the supply chain, so will my hon. Friend reassure me and my constituents that whatever the outcome of today’s discussions, that supply chain will not be forgotten?

[Huw Merriman]

My hon. Friend is absolutely right. We are talking not just about the jobs at the manufacturing plant in Derby, but about all the jobs throughout the supply chain. I work really closely with the supply chain and its trade representatives—the Railway Industry Association and Railfuture—and I am keen to continue to do so. Our work and our endeavour is to try to find a solution, not just for the workforce in Derby working directly for Alstom, but for those who are temporarily employed at Alstom and for the entire supply chain. That is why the Secretary of State is meeting Alstom right now, so that we can try to find a solution for them all.

[Wera Hobhouse (Bath) (LD)]

The Government’s inaction in signing off new orders for trains is now threatening hundreds of jobs in County Durham and wiping millions of pounds off the value of rail manufacturing companies. Inadequate supply to our rail infrastructure will have a big impact on decarbonising the UK transport system. Is the Minister aware of that, and what are the Government doing in the long term to invest in our rail infrastructure?

[Huw Merriman]

Thanks to the UK taxpayer, the Government have invested over £100 billion in the railways, and a lot of that investment has gone through to rolling stock. As I have mentioned, the rolling stock is now on average under 17 years old, with a life cycle that goes to 35 to 40 years. I will give the hon. Lady a good example of where the future is bright: in the area of innovation and technology. Great Western has just completed a battery trial for a train that has covered 86 miles, with stops, on just one single charge. My hope is that as well as new orders for trains, we will find new solutions for manufacturing rolling stock that is greener than it is right now.

[Peter Gibson (Darlington) (Con)]

My condolences to you, Mr Speaker.

Many of my constituents are involved in rail manufacturing, both at Hitachi and in the wider supply chain, and are genuinely concerned about the situation. Can my hon. Friend reassure me and my constituents that this situation is getting the full attention of the Secretary of State, and can he outline to the House why the issue is not as simple as the stroke of a pen, as alleged by the Labour party?

[Huw Merriman]

I can give my hon. Friend that assurance. He is absolutely right; this is a complex matter, and it is important that we get it right. We are working with Alstom, with the council, and with all other parties.

I should just correct the record: I am very happy to take up this issue with the right hon. Member for Derby South (Dame Margaret Beckett), but my understanding is that she met the Secretary of State for an hour on 25 March, which she said she had not.

[Dame Margaret Beckett]

indicated assent.

[Huw Merriman]

That is correct—good. I am glad I have got that on the record.

My hon. Friend the Member for Darlington (Peter Gibson) is absolutely right. This matter is complex and challenging, but I can tell you, Mr Speaker, and the House that the Secretary of State is working at full pelt on this matter with Alstom. I am hopeful that a solution will be found that will demonstrate all of that hard work.

[Lilian Greenwood (Nottingham South) (Lab)]

Derby’s Litchurch Lane is unique—the only site in the UK that designs, develops, builds and tests trains. As has already been acknowledged, the Alstom factory is a very significant employer, but it also supports thousands of good supply-chain jobs, particularly in Nottinghamshire and Derbyshire. Frankly, this Government will never be forgiven if that factory is allowed to close due to an entirely avoidable gap in orders. The Minister says that this matter is complex, but my question is simple: when does the Department for Transport intend to issue the invitations to tender for the promised new train fleets for Chiltern, Northern and Southeastern?

[Huw Merriman]

The answer is over the course of this year and next year for all of the train manufacturers that the hon. Lady has mentioned. I well remember the visit that both she and I made to the Alstom site with the Transport Committee. As she rightly says, it is a fantastic site, which is why we are working to find a solution. I am certainly encouraged by the conversations that have taken place. We know that everyone wants to find that solution—the Government certainly do—but the hon. Lady will know from all her work on the Transport Committee that legal challenges have to be dealt with in the correct manner. This matter is very sensitive, and it is market sensitive as well, so finding a way through which provides certainty and does not get unpicked is absolutely the right thing for us to do, and that is what we are doing right now.

[Nigel Mills (Amber Valley) (Con)]

The threat to the Alstom factory in Derby is of great concern to the employees in Amber Valley and those employed by the supply chain. Their mood is not helped by the fact that this appears to be a problem not with the quality of the trains, or even with their price, but with compliance with procurement rules that we ourselves put in place only a year or so ago. If it comes down to a choice between having all the i’s dotted and t’s crossed, or having that factory saved for the long term, can I urge the Minister to take a risk on the contract, sort that out later and save the factory, rather than prioritising the contract and risk losing the factory?

[Huw Merriman]

As my hon. Friend has described, this is a careful balance. I reiterate that if we were to award contracts outside of the usual process, other workforces would also be impacted, such as those in Newport, in Newton Aycliffe and in the Hull area. We have to take into account the whole workforce, as well as fair process on the contract. However, as he mentions, trains are being manufactured right now and rolling off the production line up in Derby—South Western trains and East Midlands trains—and they are good-quality trains. As I have said, the challenge is that we have produced a lot of trains over the years, and I really want to help those train manufacturers to export more, because that will fill up the order books so that they are not reliant only on the domestic market. As it gets fresher and younger, in rolling stock years, we need to find a solution outside this country.

[Andy McDonald (Middlesbrough) (Lab)]

I offer my condolences to you, Mr Speaker.

The Minister says this is a complex issue, but is it not rather simple? These companies will not be around to enjoy the sort of exporting opportunities he talks about if they do not sustain. On his answer to my hon. Friend the Member for Nottingham South (Lilian Greenwood), can he just apply his mind to what he said about the invitations to tender? If it is going to take that long to issue those tenders, these companies will not be around. It is not about them not competing; it is about their being able to compete and to be here. Can he not recognise that it is the constant chopping and changing in procurement that has landed the rail industry in this terrible situation?

[Huw Merriman]

I do not accept that. When I met the train manufacturers earlier this year, they said they wanted longer-term certainty, and the reason for setting out what is coming up next is to give them that certainly. Of course, train manufacturing is going on right now. For example, we have just seen the award to CAF for the 10 LNER tri-mode trains, so there is manufacturing and contracts are being awarded. I know I am repeating myself, but as the train rolling stock gets younger in age—it has a life of 35 to 40 years, and its average age is now under 17 years—by definition fewer orders tend to go through. However, it is important to have a future pipeline, which is why I mentioned the orders going to tender for this year and next.

[Matt Vickers (Stockton South) (Con)]

Hitachi provides opportunities and high-skilled jobs, benefiting people right across the north-east, including a number in my constituency. Can my hon. Friend confirm that he will continue to look at every possible option to protect these jobs and the north-east’s incredible manufacturing capabilities?

[Huw Merriman]

Yes, indeed. The team at Hitachi as well as Alstom will of course be working on the HS2 tender for 54 trains that will be coming their way. I am very keen to meet them, and I met Hitachi yesterday—albeit a different arm that is more on the signalling side. I am keen to work with the private sector. We are very proud of the train manufacturers we have in this country, and we want to ensure that they sustain and continue to get contracts, and not only from this country but, as I have mentioned, for exports. I really want to see exports, which is why I tend to go abroad to help champion exports in such markets.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

In 1823, Robert Stephenson and Company set up the world’s first locomotive factory in my constituency. Is the Conservative idea of an anniversary present to the north-east to end 200 years of railway manufacturing and innovation? The Minister has said this is complex and challenging, but for the sake of Hitachi workers and for our entire region, will he commit to the future of railway manufacturing in the north-east?

[Huw Merriman]

These are private sector companies. They of course rely on Government-funded contracts, but ultimately they are private sector companies, and this is a matter for them. Our job is to support them, and I have described the order book we have put through since 2012. Of course, any Government or Government in waiting actually have to follow the correct process with our officials and to do things properly, and it is rather telling that the Opposition do not seem to know how proper governance operates. I would just remind the hon. Member that, since 2010, three of our four train manufacturers have built their plants under a Conservative Government, because they know that this Government are good for business and invest in the railways, as the £100 billion invested since 2010 demonstrates.

[Paul Howell (Sedgefield) (Con)]

My constituency incorporates the Newton Aycliffe Hitachi factory. As has been mentioned, it is the home of the railways—200 years ago, the first train went on the line just next to the site of the Hitachi factory. We are founded in railways, we want to be in railways, and we always will be in railways. However, the Opposition are treating this as a political football, as the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) has just done. Everybody is saying that this is so simple and can be done at the stroke of a pen. It could not be done at the stroke of a pen when Nexus had the same situation in Newcastle. [Interruption.] No, it was not, and the Opposition had the pen then.

Right here and right now, I am very concerned about what is happening with Hitachi, as I obviously am about Alstom and the supply chains. I have met the unions—I have met Unite several times—and I will continue to do so. It is important that we are all engaged in this properly, and confidentially where appropriate. I have been completely irritated by the number of times the Opposition have said that the Government are not engaged. For most of the time I have been engaging confidentially, as Hitachi has asked. Everybody, including the Prime Minister, has been to Hitachi to understand what exactly the situation is. What we need now is for the unions to be engaged and for Hitachi to use all its innovation and skills. Can I ask the Minister to ensure that he is fully engaged, and will he explain to the Opposition why, if this was so easy, we would not just do it?

[Huw Merriman]

I thank my hon. Friend because—as he puts it himself, but he is being too modest—he is working with us constantly to ensure that Hitachi’s concerns are addressed. We have met Hitachi a number of times. We have great faith in its leadership, and we work closely with them. It is not consulting on any changes to the workforce at the moment. As I have mentioned, it has a share in the order for the 54 HS2 trains. He is absolutely right that the way we will fix these issues is to provide certainty through the tenders coming forward, to continue to invest, to try to get more exports for these train operations, and to work together in a collegiate way, not with scare stories. That is something I am determined to do, and I thank him for the work he does to that end.

[Alex Cunningham (Stockton North) (Lab)]

This is political, because this Government have got form in failing industry in the north-east. They abandoned primary steel making on Teesside, they failed to back local investors in the Sirius mine and they allowed the world-renowned Cleveland Bridge & Engineering Co. to collapse, despite promises to save it. Now they are at it again, and this time it will affect countless people from my constituency, which is the home of the first passenger railway. In a statement made just an hour ago, Hitachi has said it wants to continue to explore solutions so that the skills and investment it has in the region are retained. There is no doubt that these are at considerable risk. Is the Minister really prepared to fail Hitachi, and provide yet another example of how the Tories have abandoned the north-east?

[Huw Merriman]

The hon. Member’s argument is slightly punctured by the fact that Hitachi built its plant after the Conservative Government came to power, because it understands that we support businesses, attract businesses and want them to succeed not only with domestic orders, but with export orders. To say that we are abandoning it, when I have just described how we have had 8,000 new rolling stock vehicles produced since 2012 and the average age has gone down from 21 years to 16.8 years, rather demonstrates that he does not know what he is talking about.

[Greg Smith (Buckingham) (Con)]

My hon. Friend is absolutely right that this is a complex scenario, but there really is no need for us to be in one of the troughs in the supply chain at the moment. Chiltern Railways has massive overcrowding because its stock is the oldest fleet, and it is desperate for more trains on the network. We also have East West Rail about to launch with borrowed diesel trains, rather than the new hybrids or hydrogen trains that are fit for the modern age. As my hon. Friend looks at what can be brought forward, will he prioritise Chiltern and prioritise getting the trains that people want to see on East West Rail?

[Huw Merriman]

I know that my hon. Friend, who is another excellent member of the Transport Committee, has written to the Secretary of State, and we are lining up a meeting to discuss Chiltern’s rolling stock. He knows I am very keen to find a solution with some rolling stock that is available, and I am looking to take that forward. He asked about the situation with East West Rail. The consultation will go forward this summer. I have referred to the testing of a battery-powered train that went for 86 miles, and I believe the route from Oxford to Cambridge is 84 miles, which suggests that could be an answer to the point he rightly makes.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I have been chair of the all-party group on manufacturing for some time, I worked in manufacturing at one stage, and I represent the fine manufacturing town of Huddersfield—despite other claims in this House, I am the Member of Parliament for Huddersfield. But this is about job losses and is the Minister aware that under this Government, since 2010, the manufacturing sector in our country has been shrinking and shrinking? Now, less than 10% of people in this country make anything. That is a dire situation, and we see it not only in rail but in defence. The town I represent makes the engines for tanks, guns, ships and all of that sort of stuff, but they do not get the orders in time. The fact of the matter is that all our wonderful manufacturing towns and cities are in peril under this Government. What is the Minister going to do about it?

[Huw Merriman]

That is the same Huddersfield that I visited with the team from the trans-Pennine route upgrade. We are investing between £9 billion and £11.5 billion in upgrading that route, which not only will make it better for rail passengers, but will provide thousands of jobs, the bulk of them from the local workforce, of which the trans-Pennine route upgrade team is very proud. That rather demonstrates that what the hon. Member has just stated is not backed up by the facts.

[Sam Tarry (Ilford South) (Lab)]

During the pandemic the Government rightly stepped in to support train operating companies through huge subsidy, which essentially meant subsidising the profits of those companies. The Minister will also know that since British Rail was privatised, the ROSCOs—rolling stock companies—have been highly profitable and lucrative businesses, in my view with very little value for the taxpayer whatsoever. Will the Minister therefore consider two things: first, in this situation with Hitachi and Alstom, seriously consider direct Government intervention to stop these companies going to the wall before they can get the next orders in; and secondly, urgently convene a meeting of local businesses in both those areas with all the rail unions, from Unite to the Transport Salaried Staffs Association, ASLEF, and the National Union of Rail, Maritime and Transport Workers, bringing them together to discuss how we jointly work together to make sure that our brilliant and long-held and highly skilled workforce is not just thrown on the scrapheap for decades to come?

[Huw Merriman]

A lot of the finance I talked about and the orders that have been brought forward, which is why we have a relatively young fleet, are the result of train operators being able to use their own balance sheets in order to invest. Rail finances are back to only about 80% of where they were pre-covid because of changes in working patterns; that has been more of a challenge, which is why the Government and the taxpayer take on more of the burden. On meetings with the unions, I should reference the meeting I had with union representatives from Alstom and the workforce, who were superb. They wanted to do their business in a sensible, calm way while also challenging, and rightly so. That provides us with the motivation to try to intervene and deliver a solution, and that is what the Secretary of State is doing right now.

[Liz Twist (Blaydon) (Lab)]

The potential loss of jobs at Hitachi will hit the north-east economy as a whole, and it is vital that we maintain rail manufacturing capability there. What are the Government going to do to ensure that we do not lose that facility because of a gap in orders? What will they do to ensure that does not happen and to save those jobs?

[Huw Merriman]

It is important to note that Hitachi is not currently consulting on any changes in the workforce, but it is of course concerned and it speaks to hon. Members in this place to put those concerns across, and I welcome that approach. Where train operators have rolling stock that is older and needs renewing, we are putting them out to market—those operators are TransPennine, Northern, Southeastern and Chiltern. Bringing those orders through will assist, but I come back to the export part of this: if our fleet is getting younger, meaning there will not be as many orders, we really need to see our four great manufacturers being able to export more abroad to deliver for UK plc.

[Mike Amesbury (Weaver Vale) (Lab)]

What further discussions are the Minister and Secretary of State going to have with the manufacturing and rail unions on this matter?

--- Later in debate ---

[Huw Merriman]

As I have already stated, I have met the Alstom unions myself—I am always very happy to meet the unions, as indeed is necessary. At the moment, however, our work is with Derby City Council and, more importantly, with Alstom, which ultimately will make the decision. It is a private operator and it will be a decision for Alstom, but we want to show what we can do to help with orders and other assistance. We have been working across Government to provide that reassurance so that we can work towards Alstom not only keeping the plant but investing further in it and bringing more of its enterprise into the UK.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his answers; I do not think anybody in the House could doubt his commitment or that of the Government to improving things, and we thank them for that. What is the Government’s strategy for supporting manufacturing companies throughout the United Kingdom to make improvements to attract business and sustain contracts? Will the Government commit to ensuring that all Government contracts are fulfilled with British-manufactured products as standard, in order to give confidence to investment in British manufacturing?

[Huw Merriman]

I thank the hon. Member, who always puts his points with great kindness and consideration—as a result, he makes better points than some that get chucked around here. I can assure him that I have written to the train manufacturers, met with them and listened to them, and they have said that they want certainty and to know what the pipeline is. We have been working with the Treasury to bring that pipeline forward. The Secretary of State’s letter adds another angle: what we are doing there is writing to the ROSCOs to finance train refurbishments and see if those can be brought forward. So we are doing everything we can from our side—within the difficult legal and commercial situation we find ourselves in—to do things correctly, to bring those orders through, and to give more certainty so that those companies will continue to invest in the UK.