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‘Dither and delay’ will collapse Britain’s train-building industry, minister warned

Prime Minister Rishi Sunak and Paul Howell MP during a tour of the Hitachi Rail factory in Newton Aycliffe - Andrew Parsons CCHQ / Parsons Media
Prime Minister Rishi Sunak and Paul Howell MP during a tour of the Hitachi Rail factory in Newton Aycliffe - Andrew Parsons CCHQ / Parsons Media

The fate of 20,000 train manufacturing workers is in jeopardy because of the UK’s “dither and delay” in delivering a coherent industrial strategy, the Government will be warned.

Manufacturers and financiers are to tell Huw Merriman, the rail minister, that Britain’s long history in building trains is now under threat during crunch talks on Monday.

Executives from Britain’s three main train manufacturers - Alstom, Hitachi and Siemens - are expected to underline the increasing attractiveness of moving UK operations abroad because of the vast subsidies on offer in the EU and America.

The three businesses employ 20,000 skilled workers across UK sites, with thousands more jobs indirectly impacted at British suppliers.

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Mr Merriman will be urged to reboot an estimated £4.5bn pipeline of train-building contracts “or else”, according to a source close to the talks. The rail minister will meet manufacturers in the morning and leasing firms such as Eversholt and Porterbrook in the afternoon.

Alstom and Hitachi are understood to also demand assurances from Mr Merriman that their £2.7bn contract to build trains for the Government’s HS2 is not in jeopardy.

Whitehall sources this weekend said that Mr Merriman will insist that the Hitachi-Alstom HS2 joint venture will not be impacted by the delayed rollout of HS2 that was announced last week. Trains will still be needed for testing services and for the section between Old Oak Common and Birmingham, they said.

Although Britain’s train building plants retain a history that can be traced back to the 19th century, all three of the main train makers are now in the hands of foreign-headquartered multinational companies.

France’s Alstom, which last year acquired Bombardier, owns one of Britain’s best-known works in Derby. Another at Newton Aycliffe is in the hands of Japan’s Hitachi. Siemens has a large plant in Goole that was opened by Boris Johnson in 2020.

New trains have previously announced new trains on a number of lines such as South Western Railway, Great Western Railway and Chiltern Railway - but have been subsequently shunted into the sidings.

In part, this is a function of the scrapping of franchising in May 2021. Under the old structure, train operators would include plans to buy new trains - known as rolling stock - in their tenders to the Government.

Since the end of franchising, Whitehall has been responsible for finalising new train orders.

One senior industry figure said: “The simple fact of the matter is that years of dither and delay, from electrification and signalling upgrades to orders for rolling stock, has ravaged the UK rail industry.

“The opportunity to revive UK rail is unparalleled but it will take more than lukewarm words from the Government. We need to see urgent action. Without urgent action companies will begin questioning their investment strategies in the UK."

Another source added: “The news this week that HS2 will be delayed and descoped is likely to see a significant reduction in the amount of rolling stock required for the route. This represents a further blow to the UK rail manufacturing sector and supply chain which employs 20,000 people and relies on capital deployed by world-class financiers.

“There is a very real danger this government's feast and famine approach to rolling stock procurement is repeating the mistakes of the late 1990s and early noughties which saw a more than 1,000 day hiatus in UK train orders.

“Ahead of the Budget the Chancellor and his colleagues need to make some decisions on the near £4bn future train procurement pipeline or risk capacity and capital flight to countries with an actual industrial strategy and plan.”

A Government source said that more than 5,300 trains had been built in the UK since 2010. “We encourage those manufacturing in the UK to continue to use the UK as a base from which to export,” they said.

A Department for Transport spokesman added: “The Department’s rail investments will continue to support manufacturing across the country.”