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Rolling Stock Contracts

Volume 532: debated on Thursday 15 September 2011

1. What assessment his Department has made of the ability of British-based train manufacturers to win contracts for rolling stock. (71828)

2. What assessment his Department has made of the ability of British-based train manufacturers to win contracts for rolling stock. (71829)

Since privatisation, Bombardier, as the only current UK-based train manufacturer, has supplied the majority of new trains across the UK main line rail and London underground networks, with a combined total of over 4,500 new carriages ordered since 1996. Going forward, there are a number of contracts that the Department would expect Bombardier to bid for, including the Crossrail project for the supply of around 600 carriages, and it is already a pre-qualified bidder. The tender for this contract is due to be issued in 2012. There are also potential future orders for the London Underground deep tube lines.

I listened to what the Secretary of State had to say and, quite frankly, I could have predicted his response. Why is he not prepared to do anything to reconsider his disastrous decision to award the Thameslink contract to a company that intends to build these trains in Germany?

I sometimes get the feeling that I am talking to a brick wall on this subject. I have said it before and I will say it again: the criteria by which the bids were to be evaluated were laid down by the Government in 2008. The criteria have to be followed, although they might not be the criteria the hon. Gentleman would like. We have made a commitment to look at the way we specify the criteria in future public procurements, but on this project it is Labour’s mess and we are landed with it.

Tom Blenkinsop: I am sorry, but the right hon. Gentleman told the Transport Select Committee that there was an option to review or restart the Thameslink procurement process at any time during the year before naming the preferred bidder. Will he now admit that that was a terrible mistake, which has put at risk Bombardier, Britain’s last train manufacturer, and thousands of British jobs down the supply chain?

The only other option available to the Secretary of State—I have to repeat myself again—would have been to cancel the Thameslink procurement completely and abandon the project. That power exists, but there is no power to alter the terms under which the competition is conducted once it has begun. That was made very clear by the representative from the European Commission and by the academic lawyers who gave evidence to the Select Committee.

Will the Secretary of State confirm that he will look to include socio-economic conditions in future procurement contracts and to give them sufficient weighting that the full economic impact of the contract can be taken into account?

The Prime Minister has agreed that the growth review should include a review of public procurement in the UK, and that work is now under way. We will look at what happens in other EU countries that are similarly constrained by EU procurement rules, and we will look at best procurement practice in large commercial companies to maintain long-term best value. We will certainly look at the opportunities provided by, and the appropriateness of, including socio-economic criteria, where appropriate.

I am sure that the Secretary of State will want to join me in congratulating Invensys, based in my Chippenham constituency, on winning a multi-million pound signalling contract on the Thameslink project. A world leader in train-signalling technology, Invensys has in the past experienced some difficulty in winning domestic contracts. What steps is the right hon. Gentleman taking to ensure that recognition of UK engineering talent is more commonly the rule rather than the exception?

The general rule is that we would expect to evaluate bids for contracts on their merits. Companies such as Invensys and, indeed, Bombardier have won many contracts on their merits, but we will look at whether we should, in appropriate cases, include wider socio-economic issues and factors, which some other EU member states routinely do in their public procurement processes.

Yesterday, the Deputy Prime Minister made a speech about the importance of investment in infrastructure. Will the Secretary of State provide some examples of how that might lead to more opportunities for UK-based train manufacturing in the short term?

I am grateful to the hon. Lady for her question. We are sensitive to the pressures that the UK train manufacturing supply chain—not just Bombardier but the component suppliers—are under, and the Department is urgently looking at some other projects that might be advanced. In particular, the industry proposed a project to modify the cross-country Voyager train fleet so that it could run under electric power, which would provide—if Bombardier were to win the contract—a substantial piece of work for the crucial design department in Derby. That is at the heart of securing the future of that business.

Yesterday, the Deputy Prime Minister told the right hon. Gentleman to speed up delivery of Crossrail. Will he update the House on the new completion date for the project, which will, I presume, now be earlier than December 2019, the date to which he pushed it back after the election?

The Deputy Prime Minister did not tell me to speed up the Crossrail project. The thrust of his speech was the need to ensure that committed capital funds are spent on their intended profile. The requirements to keep demand in the economy mean that we must get those vital capital programmes spent on programme, and the Crossrail project is spending on programme and will deliver the completion of the project from 2016, with full running from 2019.

So the Deputy Prime Minister was wrong—there is no plan to bring forward projects and no plan for growth. May I ask the Transport Secretary about the procurement of trains for Crossrail? After his disastrous decision to award the Thameslink train contract to a company that will build the trains in Germany, putting at risk Britain’s train manufacturing industry, he has said that he is reviewing the Crossrail contract. As he has just confirmed that Crossrail is still being delivered on his slower timetable, rather than reviewing it for six months, why does he not scrap the process and start again, and this time ensure that Bombardier has a fair chance to secure the work. Finally—

The hon. Lady is all over the place. There is nothing to scrap in relation to the Crossrail rolling stock procurement programme, because we have not started that procurement yet. We announced that we will postpone the issue of the invitation to tender until the new year, in order that consideration be given to the findings of the growth review and how public procurement in this country can best support the strategic interests of the supply chain. The broader Crossrail project, involving a major infrastructure investment—the tunnels across London—is, as the hon. Lady and anyone who travels around London knows, already under way as is manifest in the large number of big holes in the ground.