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Speaking in the Parliamentary debate on the ‘Future of the UK’s train building industry’, Maria Eagle MP, Labour’s Shadow Transport Secretary, has again called on Ministers to review the Government’s decision to award the Thameslink train contract to the German-based company Siemens. During the debate Maria Eagle MP also set three tests for the Government in carrying out future rail procurement: 

 

  • Ensuring a level playing field with other EU competitors in the way the European procurement directive is applied to the awarding of future train contracts.
  • Taking a long term approach to the rail capital investment programme, ending the stop-start approach that leaves manufacturers unable to plan ahead and hits investment in skills.
  • Reducing the number of train designs to enable longer, continuous orders to be placed and economies of scale to be achieved, as well as much needed interoperability.

 

Maria Eagle MP, Labour’s Shadow Secretary of State for Transport, speaking about the Thameslink decision, said: 

“It is not too late to look at the Thameslink decision again. It is not a done deal. Siemens has been named the preferred bidder but the actual contract has not been signed. Rail in the UK is thriving. It is set to have some of its best years ahead. It would be a tragedy if UK manufacturing workforce was not able to benefit from this exciting future, with high-end skills and secure jobs within a genuine rail manufacturing sector that builds, as well as maintains, Britain’s trains.

“It’s clear that the Department for Transport has not secured the most economically advantageous outcome either for the local community or the country as a whole. Despite what Ministers say, the Government is perfectly entitled to review the decision it has taken just as Labour commissioned an independent review of the entire Intercity Express project when in Government.” 

Setting three tests for the government in how it carries out future rail procurement, Maria Eagle MP said: 

“If we are serious about ensuring that the success of rail in Britain translates into a high quality sustainable train manufacturing sector, then the Government must learn the lessons of this procurement process. 

“First, the Government must look at how we operate contracts under the European procurement directive and identify why France and Germany manage to ensure that their trains are always domestically built.  In April, Germany’s national rail operator Deutsche Bahn placed a €5billion order for 200 high speed trains with Siemens. It would have been unthinkable for them not to have won that order. 

“Second, Ministers need to take a longer-term approach to capital investment programmes, not the stop-start approach we have now that leaves manufacturers unable to plan ahead and hits investment in skills. It’s 800 days since the last new rolling stock order was placed. That ‘feast-and-famine’ approach to procurement has blighted the sector for years and must change. A significant amount of the cost to manufacturers is in setting up the production line and Network Rail believes a fifth of all procurement costs could be eliminated if there was continuity of orders. 

“Third, the Department for Transport should reduce the number of train designs to enable longer, continuous orders to be placed and economies of scale to be achieved – as well as much needed interoperability.  The Competition Commission calculate the average cost per vehicle is over £1million, with 8% of procurement costs associated with the development of the bespoke model. Network Rail has recommended reducing the 64 different rolling stock classes currently operating on the network to just three. 

“These three changes would make a significant difference both to reducing cost, but also enable British based manufacturers to plan properly, skill their workforce adequately and secure the long-term work of the kind that is achieved in other sectors. In the meantime the Government must not just sit back helplessly as yet another UK manufacturing sector is lost.

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