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Railway Rolling Stock

Volume 227: debated on Monday 28 June 1993

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To ask the Secretary of State for Transport what action the Government are taking to ensure that the United Kingdom retains the ability to build railway carriage body shells.


To ask the Secretary of State for Transport when he expects the British Railways Board to announce the result of the tender process for new trains under the recent£150 million leasing facility.

The Government are providing record levels of financial support from the public purse. In 1992–93, British Rail investment stood at the highest level for more than 30 years. Investment of more than £3 billion is planned over the next three years, £2 billion of which will be on the existing railway. Later in the summer, British Rail will place the order for the £150 million leasing facility for new rolling stock, which we proposed in advance of privatisation. We have also recently announced measures to encourage the development of a rolling stock leasing market.

Is the Secretary of State aware that there have already been 532 casualties of railways privatisation, in terms of the number of jobs lost at the York carriage works because of lack of orders, and a further 364 redundancies at other Asea Brown Boveri factories around the country? Is he further aware that ABB is the last surviving rail company in Britain which manufactures railway bodyshells, and that unless the Government ensure that the company receives orders extremely quickly the York works will close? We shall then have to import railway bodyshells from abroad—at huge cost to our balance of payments—and commuters in the south-east will not get the decent, modern trains that they are looking for, deserve and want.

First, those redundancies have nothing to do with privatisation. Even if we had not put forward our reform proposals, the position, which is largely to do with the recession and the switch in priorities in British Rail investment, would be the same. I am aware of the situation at ABB, and have had recent discussions with the company. I hope that British Rail will proceed as soon as possible with the decision to be taken on the £150 million leasing proposals, and I have urged it to do so. It is for British Rail to decide where that order should be placed.

Will my right hon. Friend urge British Rail to get its act together and place the order for the new trains for the Kent link line with ABB York as quickly as possible? Does my right hon. Friend agree that the future of the ABB York workshop depends not only on that order, but on the new leasing market for trains and an increase in orders from overseas railway operators? Would not it help ABB's export drive if British Rail were to place the order now and demonstrate its confidence in the excellent ABB work force?

I know of, and pay tribute to, the interest that my hon. Friend has taken in ABB. I also pay tribute to the huge improvements in ABB's productivity since it went into the private sector. The prospects of ABB securing overseas orders are greater now as a result of that improvement in productivity. It should be asked why it was unable to compete in international markets much earlier.

I hope that British Rail will reach its decision as quickly as possible. The choice of where investment lies is, however, for British Rail. The tendering process is now under way. I hope that the tenders will be in very shortly and that British Rail will make its decision as speedily as it can. I entirely agree about the importance of moving to a private sector leasing market. That will be concentrated on rolling stock, and we have been developing our plans for that.

The Minister knows that £150 million is less than half of what is needed for new rolling stock and that it will not meet the cost of existing orders that British Rail is ready to place. Why does the Minister not admit, honestly, that other nations that have privatised their railways, like the Swedes, have accepted that they can do so only with massive investment in new rolling stock? How does the Minister think that his shadow organisations will create one penny more for investment when he knows that only more money will create new jobs and better rolling stock?

By attracting private sector capital to the future leasing market. Current investment is at record levels. British Rail investment is more than 50 per cent. greater in real terms than it was in 1979, and one and a half times greater than in 1969. British Rail has given priority in its current programme to infrastructure and signalling, but in recent years there has been a substantial investment in rolling stock—something like 90 per cent. of rolling stock in the regional railways is less than eight years old—and that must be taken into account when looking at the priorities.

My right hon. Friend may be aware that go-ahead is anxiously awaited for the leasing scheme for rolling stock on the Leeds-Bradford, Airedale and Wharfdale lines. Will he note that the go-ahead for that scheme would provide a valuable boost for the British train manufacturing industry and anxiously awaited new trains for a line, which is well used and would otherwise have to use 30-year-old stock?

I am aware of the situation. My right hon. friend the Minister for Public transport has taken a very close interest in the matter. There is to be a debate on the subject on Wednesday and my right hon. Friend will give a full reply then.

Does the Secretary of State accept that the blame does not lie with British Rail or the engineering company but with the Government, because they have accepted a tendered contract for the north-west line and Network SouthEast, which finished in December last year? The Government ordered a review and re-tendering. That delay has led to hundreds of workers being put out of work. Perhaps he will tell us how much more the re-tendering will cost the Government. Will it be between£10 million and£100 million?

No. If the hon. Gentleman is talking about the two alternatives for the£150 million rolling stock—the ICC 225s for the west coast main line and the Networkers—that is a new order. If the hon. Gentleman has in mind the decision on the ICC 225 or 250, the 225 was chosen. That reflects the fact that there has been a substantial decrease in British Rail's revenue as a result of the recession, which is probably more to do with present rolling stock investment than anything else. But there are also advantages in going for the ICC 225, because it has been impressed on me by rolling stock manufacturers that long runs of existing locomotives can often be a much more cost-effective way to deliver new orders.

Can my right hon. Friend confirm reports that his Department sees a strong economic case for both those contenders for the£150 million in the Network SouthEast programme and the west coast main line and that the 150 million is to be seen as the first stage of a continuing ordering programme, because that is what travellers on British Rail want and what the industry needs?

Of course, one would wish to undertake several areas of investment, and my hon. Friend is right that one would wish both to be done as soon as possible, but for the£150 million it will be a choice between the two tenders. My hon. Friend must realise that I cannot predict the outcome of future public expenditure rounds. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) must realise that one has to take into account overall public expenditure when making any decisions where public money is involved. However, we shall have to consider whether there would be an opportunity to repeat that kind of leasing operation or whether we should look entirely to the private sector which will finance future orders.