St Rollox Railway Works: Closure

Paul Sweeney Excerpts

Monday 14th January 2019 Commons Chamber

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

It might be the small hours, but I rise to speak on no small matter. It is a very important matter facing Glaswegians in the future: that of Scottish engineering. The St Rollox locomotive and carriage works in my constituency, which has existed since 1856, is now under imminent threat of closure and I rise in support of the workers there, 200 of whom face the loss of their livelihoods, which is of great concern to the city of Glasgow.

The works were built in 1856, for the Caledonian railway. The new works were built on the site of the first railway in Scotland, the Glasgow and Garnkirk railway. To this day, it is still affectionately known as the Caley. Given that it has existed since the dawn of the railway age, it is very sad that we could be witnessing the end of an industry that is synonymous with the community of Springburn in which it was built.

During the second world war, St Rollox joined in the war effort, producing, among other things, Airspeed Horsa gliders for the Normandy landing airborne assault. Cowlairs, nearby, also produced 200,000 bearing shells for Rolls-Royce Merlin engines. For more than 170 years that community has been at the forefront of Scotland’s engineering excellence. Indeed, anyone growing up in the city of Glasgow will have visited, and will be familiar with, the city’s transport museum, and will have seen all the wonderful steam locomotives that were built in Springburn, more than 25,000 of which were sent to all corners of the earth. That is a real pedigree of Scottish engineering, which endures to this day. It would be appalling if the last vestiges of such a wonderful tradition were to be lost, and we, along with the trade unions, believe that that is entirely avoidable.

St Rollox has endured through nationalisation and privatisation. In 1948, when it was nationalised as part of British Railways, it became the primary Scottish centre for the repair of rolling stock, and it retains that role to this day. After British Rail Engineering Ltd was privatised in 1988, the site was operated as a rail maintenance facility by British Rail Maintenance Ltd, along with Eastleigh, Doncaster and Wolverton. It was then a nationalised industry, but during that period its size was reduced from 150 acres to about 15 today. In 1995 BRML was privatised and the site was sold to Babcock International and Siemens, along with the Wolverton site. The sites have been paired ever since. In 2002, both sites were sold to Alstom, a French-owned company, and in 2007 Alstom sold the site to a company called Railcare.

Railcare was placed in administration in July 2013. Although I was not a Member of Parliament then, I remember the great anxiety that that caused. However, from anxiety came great hope when, in August 2013, the site was acquired by a German-based engineering group, Knorr-Bremse. In 2018, it was sold to another German company, an industrial turnaround specialist called Mutares. In November 2018, just a few weeks after its acquisition, it was formed into a newco known as Gemini Rail, which was a wholly owned subsidiary company of Mutares but also associated with Knorr-Bremse—for instance, sharing the same company house number. It is clear this has been an exercise conveniently designed quickly to rationalise operations in the UK.

As at December 2018, St Rollox continues to carry out component and rolling stock repairs and overhauls. Recent work has included overhauls of class 156s, class 158s and class 320s for Abellio ScotRail. It is the largest rolling stock repair site in Scotland. Two smaller sites in Kilmarnock are operated by Brodie and Wabtec respectively, and are still operating at capacity.

In December last year, shortly after acquiring the site, the new owner announced very suddenly that it planned to close the works, stating that it was making losses of between £3 million and £4 million. Unite, which represents more than 90% of the workers on the site and which conducted an inquiry, believes that the actual losses amounted to only about £1 million to £1.5 million. After a meeting with the managing director of the site, it was conceded that the real losses made by the company that year were only £1 million to £1.5 million at St Rollox, but it was forecast that there would be larger losses in the future as the UK rolling-stock industry was transformed, with new stock coming on line, and there was less demand for repairs and maintenance of legacy rolling stock.

[Danielle Rowley (Midlothian) (Lab)]

My hon. Friend is making a powerful speech on an issue about which I know he cares deeply. Does he agree that this is another example of far-removed managers making decisions that have an impact on workers who keep our industry alive, and that we need to reverse that and put the power back into the hands of those workers?

[Mr Sweeney]

rose—

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I know how much fighting for good jobs in his constituency means to my hon. Friend, but I also know the history of St Rollox. My grandfather, Walter Freer, worked there in the 1920s, at the time of the Railways Act 1921. St Rollox was purpose-built for both locomotive and carriageway, and with wagon works. When I was a child, my grandad was Casey Jones, so I am proud to be here in his memory. That pride will also be shared by the community of Springburn. St Rollox railway is part of that community and has been since 1856, but now some want to close it down. There are similarities with my own community of Birkenshaw, Tannochside and Viewpark, where once the Caterpillar factory stood, the biggest European indoor factory at the time. It was 32 years today—

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[Hugh Gaffney]

Thank you, Mr Speaker.

Some 32 years ago the factory was taken over by the workers. They looked for a way out and I am going to offer the same thing to the workers in St Rollox.

[Mr Sweeney]

I thank both my hon. Friends for making those contributions, and my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) was typically passionate about this issue. I agree with the points both of them are making about workers’ control and workers having their livelihoods and value misrepresented by remote management. One of the big problems the St Rollox site has faced over the recent period under private ownership has been the increasing branch-plant relationship developed between the Wolverton site in Milton Keynes and the Springburn plant in Glasgow. All the white-collar operations have been moved to Milton Keynes and the entire operation is controlled at, and its centre of gravity has increasingly moved towards, Milton Keynes. There is not the same vigorous entrepreneurial spirit that once existed, fighting to bring in contracts, to expand the site and to invest in the site. It has increasingly been allowed to wither on the vine, and work has deliberately been turned away from St Rollox and Springburn, allowing it to almost become a self-fulfilling prophecy that it is destined for closure. That is not fair on the workforce. If they are given proper control of the site and an opportunity to flourish, I have every confidence that they could grow in the future.

The St Rollox site has a turnover of £20.4 million this year. The management accept that is enough to allow the company to wash its own face at St Rollox. It is believed that closing the site will leave Scotland’s railway at a huge strategic disadvantage in maintaining its own rolling stock, depending on railway maintenance facilities in other parts of the UK.

Unite the union, which is represented in the Gallery, and others are seeking a postponement of the serving of the statutory 45 days’ notice to allow more time for a rescue plan to be developed. It is understood that there is a series of contracts that could be bid for which would more than ensure the short to medium-term future of the works, although the company maintains that it would do little to address the fundamental issue of overhead costs to operate the site.

It has come to light that the compulsory consultation notice is likely to be served on the workforce this month. Apparently, this is due to the cost of overheads that Gemini, the new owners, is experiencing in running such a large and underutilised site. However, a solution is in the offing: transfer of the overall site operation and custody to ScotRail and/or Network Rail could see Gemini retain its operations as a tenant or ScotRail operate it entirely in-house as a standalone operation.

[Patrick Grady (Glasgow North) (SNP)]

I thank my constituency neighbour for giving way. Does the hon. Gentleman welcome the fact that the Scottish Transport Minister has also called for a delay to the statutory consultation, which he did after our counterpart in the Scottish Parliament, Bob Doris, raised this at First Minister’s questions? Does the hon. Gentleman welcome the efforts of the Scottish Government to bring all the stakeholders around the table to find a way forward for the site?

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[Mr Sweeney]

I thank the hon. Gentleman for his intervention. He raises the actions already taken so far; there has been a very rapid response from elected Members of all parties to address this critical issue facing such a strategic and iconic industrial facility in Glasgow.

I will come to the details of that action soon, but first I want to outline the extent of the work that could have been brought into the site but that curiously the current management has not been entrepreneurial enough to bid for, never mind secure. That includes class 320 work for ScotRail and its fleet owners Eversholt, which is potentially worth £6.5 million; class 156 work for Northern Rail, worth £3 million; class 156 work for ScotRail, worth £2 million; class 156 retrofitting for ScotRail, worth another £1.5 million; and class 153 ScotRail work, worth another £3 million. There is also exam and inspection work unable to be done at other ScotRail depots or in Scotland because they are at capacity and do not have the workforce. In addition, there is high-speed train conversion work also available and class 170 work worth another £3.5 million, as well as the Caledonian Sleeper work. There is a huge array of potential opportunities and investment to be brought into the site that it has not even considered bidding for. It is bizarre that the company would not be doing that if it is not a branch-plant economy and relationship.

[Chris Stephens (Glasgow South West) (SNP)]

The hon. Gentleman’s speech has been very passionate and I agree with a lot of what he has said. Does he agree that another danger is that the 45-day redundancy notice does not give enough time for a solution to be found for the company and the highly skilled workforce at St Rollox?

[Mr Sweeney]

I very much agree with the hon. Gentleman, who makes a pertinent point about the triggering of the HR1 statutory notice, which starts the clock ticking. In my previous job at BAE Systems, I remember when that clock was set ticking at a mass meeting in 2012. At that time, more than 1,000 jobs were put at risk on the Clyde, and I know how unpleasant that feeling was, especially just before Christmas. The workforce were really sold short by the management. In the morning they were given their Christmas hampers, and in the afternoon they were told that their works were closing down. What appalling corporate social responsibility that was.

This is a testament to the breakdown of trust between Gemini and the workforce, and we have to fight hard to delay the statutory notice as much as possible, because there is a viable solution. The site is fundamentally viable. Indeed, it is believed that one opportunity would be provided through the electrification of the line. We have recently seen investment in the Edinburgh to Glasgow improvements, and this is only a short distance away. It is less than a mile to the site, and the electrification of the line into the works would allow more work to be accessed readily without using shunters. A previous proposal was considered by the coalition Government, and it was anticipated that capital costs of approximately £700,000 would be required at that time. I urge the UK and Scottish Governments to instruct Network Rail to action an immediate feasibility study to look into electrifying the line into St Rollox under control period 6 of Network Rail’s funding.

I went to meet the workforce at the site, along with the MSPs from the area and the leader of the Scottish Labour party, Richard Leonard. We consulted the workforce directly, and a meeting was subsequently held with the Scottish Transport Minister, Michael Matheson MSP. He has confirmed that officials at Transport Scotland and Scottish Enterprise have been working towards pulling together several organisations that are members of the rail supply network, along with potential customers for the services that Springburn provides. He has also asked that Gemini postpone the commencement of the closure consultation to allow all the options to be explored, and we are absolutely confident that there is a viable future for this site. It is fundamentally viable, and it has improved massively. Indeed, I visited it when I was working with Scottish Enterprise, and I was very impressed by its modern nature, its highly efficient operations and the work that had gone into massively improving its efficiency, safety and costs over the period of ownership by Knorr-Bremse. I am hopeful that that can be sustained. There is a model for restructuring that could happen.

I had the opportunity to meet the rail Minister earlier today, and we discussed the opportunities for the site. There is huge disruption in the rail industry in the UK with the onset of new rolling stock, but this site has endured disruptions and changes across the railway industry from the dawn of the railway age. It was built when the first railway was constructed in Scotland, and it can endure again in the future. There is an opportunity to restructure the site and I am hopeful, as I know ScotRail is, that it can be a strategic component of Scotland’s rail industry long into the future. I believe that if the rail Minister is amenable to acting proactively and urgently with his counterpart in Scotland, we will be able to work collaboratively at all levels of Government to ensure that the site will endure for the next 150 years.

This is a huge opportunity for Scotland’s railway industry, and I would hate to see that value, opportunity and potential destroyed simply to serve the short-term benefit of a private operator that is clearly treating its workforce with contempt. I want that operator to understand that the opportunity to be involved in the site is not just in its own self-interest, and that it is also an opportunity to defend and promote the growth of Scottish railway engineering long into the future. The only reason that the community of Springburn exists is because of the railway industry, and to lose the last vestige of the purpose and unifying identity that underpins our community would be hugely tragic. The worst thing is that the site is not a lame duck; it is entirely viable but it has been sold out by a lack of effort and entrepreneurial spirit on the part of its private management. We must wrest back control of the site and relaunch it for the future, to ensure that Scottish railway engineering can thrive long into this century.

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

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

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

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

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

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

[Mr Sweeney]

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

[Andrew Jones]

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

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

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

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

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

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

[Mr Sweeney]

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

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

[Andrew Jones]

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