Future of Rail Manufacturing

Huw Merriman Excerpts

Tuesday 23rd April 2024 Westminster Hall

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

With pleasure, Sir Gary. It is a pleasure to serve under your chairmanship. I start by thanking my good friend, the hon. Member for Easington (Grahame Morris), for securing this important debate on the future of rail manufacturing and for his engaging and impassioned speech. He is always a real warrior for the railway and the workforce. Rail remains a top priority for the Government. It connects people to places, delivers the goods we rely on and, as we have heard during the debate, supports jobs in our communities.

Turning straightaway to rolling stock manufacturing, since 2012 the Government have commissioned 8,000 new rolling-stock vehicles—that is out of the 15,600 we have in total. That has encouraged four train manufacturers to set up shop here in the UK. It is worth stating for the record, because it could have been missed in what has been said this afternoon, that in 2010 there was only one train manufacturer. We now are proud to have four. We are very keen to ensure that the four thrive and survive. I will come on to that point later in my speech.

These businesses are now assembling and building trains, while bringing growth to local communities. The average age of rolling stock has fallen from 21 years in 2016 to just under 17 years today. The hon. Member for Easington pointed to one particular train operator that has had a longer tenure, but I tend to look at the entirety of the network, and the average age is under 17 years, which is less than half the average life span for a vehicle, which tends to be 35 to 40 years. Britain’s modernised fleet of trains offers improved comfort and services to passengers across the country, while benefiting the UK rail supply chain, which came together to design, manufacture, paint and assemble the new trains. We have a workforce to be proud of. It is right that train manufacturing is a competitive, commercial market.

[Alex Cunningham]

The Minister was talking about the comfort of travelling by train. I would like to personally invite him to take a trip with me from Darlington to Saltburn on the train one day, and we will see what comfort we have to put up with in the Tees Valley.

[Huw Merriman]

Look, I travel by train all the time, not just on my own line, which I believe has the oldest train stock, but across the country. I spend every single week travelling by train across the country. I am sure at some point I will experience that part of the country as well. The facts do not lie. Out of our total of 15,600 trains, 8,000 are new trains that have been built since 2012. That shows that improvements are happening, but there is more to do, and I am always keen to do more.

It is vital that rolling-stock-owning companies continue to play their role. The private sector has invested around £20 billion to transform our train fleets for passengers. Trains are major assets, and there will naturally be procurement cycles. Our travel habits have changed since the covid pandemic. While passenger numbers are now stabilising, we are still seeing a reduction in revenue. Despite this, the order of 54 high-speed trains for phase 1 of High Speed 2 remains unchanged. There has also been a sizeable contract awarded recently to LNER, and there are upcoming procurements in the market being run by Northern, Southeastern, TransPennine Express and Chiltern. This process will be open to all manufacturers, as is right. Over the next two to three years, we envisage contracts being signed for over 2,000 new vehicles, with a total value of more than £3.6 billion.

Competitions for procurements to upgrade existing rolling stock fleets are also in the works. East Midlands, Chiltern and CrossCountry are due to modernise their existing fleets. With several other operators, such as Avanti West Coast and the Angel Trains Pendolino fleet, refurbishment is already under way. None the less, we recognise that some manufacturers face gaps in their order books over the next two to three years. I disagree with the claim by the hon. Member for Easington that the Government have not acted quickly enough on potential job losses at Alstom and Hitachi. The Secretary of State and I have been involved in discussions with both companies over several months.

This is a complex issue. There are no straightforward solutions, and any intervention must comply with the law while ensuring value for passengers, taxpayers and Governments. As I referenced in the Chamber last week, Siemens gave us a good example of that by challenging in court the award for HS2 that went to Hitachi and Alstom. The Department was found to have won on every single point. That acts as a guiding point for how we must make our tendering process work. If we do not make that work and we award contracts that are ruled unlawful by the courts, we create more uncertainty for the workforce, which we are doing our best to help.

[Alex Cunningham]

Will the Minister give way?

[Huw Merriman]

I have not got time, so I am sorry, I will not give way.

I am pleased to report my right hon. Friend the Transport Secretary had a constructive meeting last week with Alstom’s chairman and CEO and its UK and Ireland director. We have now entered a period of intense discussion with the company. It would not be appropriate to go into the details of those conversations at this stage. Work continues at pace, and I know the Transport Secretary plans to update the House at the appropriate time.

With regards to Hitachi, last week the Transport Secretary met Unite’s assistant general secretary and representatives from Hitachi’s Newton Aycliffe plant. I met a representative from Hitachi in Parliament yesterday as well. The Secretary of State was able to explain the facts of the situation and the Government’s position, facilitated by my hon. Friend the Member for Sedgefield (Paul Howell), who has assisted greatly. The Department remains keen to work closely with Hitachi to help the company find a solution. We strongly encourage Hitachi to continue to engage constructively with us.

The future for our plants is very much focused on exports, as it has to be. Now that we have four train manufacturers it is key for us to work with those manufacturers so that products that are designed and built in the UK are exported abroad and we can grow the plant. I will add that when it comes to rail infrastructure investment, we have published a £44 billion five-year funding settlement for Network Rail’s operations, maintenance and renewal activity in 2029, which provides further opportunities for UK rail manufacturers and suppliers.

The key to the future of rail manufacturing is to continue to invest in rail across the entire network. The £12 billion that we have just announced to help Northern Powerhouse Rail better connect Liverpool to Manchester and deliver new routes and stations across the north will provide more opportunities for train manufacturers and the rolling stock that they will produce. That is where the TransPennine route upgrade will help with the TransPennine Express order, which is to market. Of course, Network North also saw our commitment to deliver on the Ferryhill scheme, subject to a successful business case at each stage. I thank my hon. Friend the Member for Sedgefield for his unwavering commitment.

It has come up a number of times, so I will thank the Transport Committee for its work carrying through rail reform as the pre-legislative scrutiny Committee. I note there are six current or former members of the Committee in the Chamber for this debate. The Chair of the Committee, my hon. Friend the Member for Milton Keynes South (Iain Stewart), is spot on in saying that it gives us a longer-term, holistic approach to allow the railway to organise itself. One would hope that industry will be better supported by that holistic approach. I am very grateful for the work that the Committee is doing.

Time does not allow me to continue, but I shall conclude by saying that I cannot overstate the role of rail manufacturing in supporting a growing economy. We are really proud of the four train manufacturers we now have in this country. We want to do everything we can to work with them and the individuals working in the wider rail supply chain. Their jobs matter hugely to us. We understand the uncertainty and we are working hard to unblock it. That is why the Government are committed to working with businesses to overcome the challenges and maximise the opportunities ahead, both at home and abroad. We work towards our shared ambition to bring track and train together with rail reform, and support our fantastic rail and train manufacturers.