Transport and Local Infrastructure

Debate between Phil Wilson and Christian Matheson

Thursday 19th May 2016 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

I want to talk about the importance of rail manufacturing, and primarily about the importance of Hitachi to the local economy in my constituency. The Hitachi Rail Europe factory in Newton Aycliffe opened last year and is creating 730 jobs, with many more in the supply chain. The factory is a superb, modern facility. Costing £82 million, it is the largest private sector investment in the north-east of England since Nissan. The factory’s first task is to build the next generation of inter-city trains for the Great Western line, which will begin entering service next year. It will then build trains for the east coast main line from 2018. For those who use the service on a regular basis, that day cannot come too soon. The company has also won contracts for commuter trains in Scotland and on the trans-Pennine route.

Hitachi built the first bullet train in Japan in the 1960s, and I understand it is now on its seventh series of bullet trains. I want to see that technology brought to Britain and manufactured in Newton Aycliffe. Hitachi’s expertise means that it could manufacture the rolling stock for HS2 in Newton Aycliffe if it wins the contract. That would provide a great boost to manufacturing in the north-east and the rest of the UK. I see the 730 jobs that are already to be created as a minimum.

There are other areas of expansion. Hitachi Rail Europe has that name for a simple reason: it sees the UK and the north-east as its launch pad for exporting rolling stock into the European Union. That is one reason why our continued membership of the EU is vital. Hitachi has shown great confidence in UK manufacturing’s capabilities, and I can only endorse its faith in the workforce of Newton Aycliffe and the surrounding area. It has moved its global rail headquarters to London and opened a European rail research centre there, and for one primary reason: because the United Kingdom is part of the European Union. I worry about future investment in the Hitachi plant if we leave the EU.

What I am saying is not meant to be part of some “Project Fear”, but as the MP for Sedgefield, which includes Newton Aycliffe, I feel that it would be irresponsible of me not to express my deeply held worries about the future of Japanese investment if we leave the EU. Those worries find their source in statements made by the chairman of Hitachi, Mr Nakanishi. In an interview with the Financial Times on 12 October 2013, under the headline “Hitachi president warns UK against leaving the EU”, he said that he did not expect the UK to leave the EU, but that if it did,

“I would have to reconsider how to manage our railway business.”

In an article that he wrote for the Financial Times on 11 May this year, Mr Nakanishi stated:

“Britain is the centre for Hitachi’s two largest overseas infrastructure projects, in rail and new nuclear power. We invested in the country as the best base for access to the entire EU market. For our manufacturing and supplies we depend on skills and parts that come from within the UK and from Europe. Take away its EU membership, and the investment case looks very different.”

Some who want to see Britain leave the EU play mischief with major foreign investment and become cavalier with quotes and facts, picking only those that support the argument they wish to promote. For example, Matthew Elliott, the chief executive of Vote Leave, insinuated at the Treasury Committee’s public hearing on 9 May, through selective quoting, that nothing would change with Hitachi if the UK left the EU. The recent and consistent statements of the chair of Hitachi prove that there would be repercussions for further investment in the UK if we left.

As this speech is not part of a so-called “Project Fear”, I will say that if Britain votes to leave the EU on 23 June, it will not mean that the Hitachi factory in my constituency closes on 24 June. However, I am deeply concerned about its ability to generate more jobs and expand in the long term, and therefore to create economic growth both locally and nationally, if it does not have unfettered access to the EU marketplace. In a recent survey that I undertook of businesses in my constituency, more than 50% of respondents said that leaving the EU would have a negative effect on their investment plans for the future.

[Christian Matheson]

Is my hon. Friend aware that I made exactly the same point at a meeting of the all-party aerospace group about a large employer next to my constituency, Airbus? This is not simply about Hitachi, in his constituency; major manufacturers and their suppliers right across the UK have the same fears.

[Phil Wilson]

That is absolutely right. I made the specific point about Hitachi because it is based in my constituency, but it is fair to say that for a lot of foreign investors, our being part of the EU is key to their future plans.

I am disappointed that some Members are prepared to play fast and loose with the facts. The hon. Member for Uxbridge and South Ruislip (Boris Johnson) was recently quoted in the Daily Mail as saying that big businesses

“agree with an open-border immigration policy because it means they don’t, for instance, have to worry too much about us getting local people. They think they can just get a steady supply of unskilled…labour from abroad”.

That is a slur on the good name of good employers such as Hitachi, which built its factory in the north-east because of the local people’s skills and application to their work. Some 95% of Hitachi’s workforce at Newton Aycliffe come from the north-east, and they are skilled and well paid.

Because of its commitment to the local people, Hitachi—along with Gestamp, the major employer in the town, employing 1,300 people—has sponsored a university technical college, built overlooking the Hitachi factory. UTC South Durham will have more than 60 young people passing through its doors once it opens in September, and that number will build up to 600 local teenagers, who will be equipped with the essential skills required for the world of work. That is all possible because of Hitachi, Gestamp and Sunderland University’s belief in local people, but also because we are part of the European Union.

Hitachi has written to its workforce outlining the company’s position on Europe, not to bully but to inform. It is what a responsible employer does. It has made it absolutely clear that the decision on 23 June is one for the British people, but that it would be remiss of it as a responsible employer not to state its position. Some of the text of the email that Hitachi has sent its employees reads:

“Like many other international companies we invested here because of the UK’s strong economic fundamentals and rich access to talent. We are also in the UK in order to have access to the entire EU and European market. In particular for our manufacturing and supplies we depend on skills and parts which come from within the UK and Europe at large.

We can understand that the EU is not perfect but the UK’s departure from the EU would create huge uncertainty for all Hitachi businesses in the UK in terms of economics, trade, skills and talent, and would affect the stability that the company needs for continued investment and long-term growth.

We also believe that it would have negative impact upon the UK economy and carry significant risks for the remainder of the EU. Therefore we believe that a strong and united Europe with the UK in a single, open market offers the best conditions for Europe’s prosperity, and for Hitachi’s business.”

The matter could not be made clearer.

Like a lot of people, I campaigned long and hard to ensure that the Government went ahead with the deal to bring Hitachi to the north-east, because of the jobs and investment that it would bring. I am not prepared to stand idly by and watch that new inward investment—not just Hitachi, but other major investors—be threatened by our leaving the EU, and that is why I will be campaigning for a remain vote on 23 June.