British Rail Engineering Ltd.

HC Deb 18 March 1987 vol 112 cc927-32 3.32 pm

Mr. Peter Snape (West Bromwich, East) (by private notice)

asked the Secretary of State for Transport to make a statement about the 1,600 redundancies announced today at British Rail Engineering Ltd. at Crewe, Derby, Doncaster and York.

The Minister of State, Department of Transport (Mr. David Mitchell)

At a meeting yesterday afternoon, British Rail Engineering Ltd. informed the national officers of the trade unions concerned that it would unfortunately be necessary to make a further reduction in the staff of the new build and repair group. These changes are largely prompted by further reductions in British Rail's repair requirements for coaches and locomotives and do not reflect any new policy initiatives.

The new build and repair group has around 13,000 staff, and the BREL announcement covers a reduction of 1,400 staff by March 1988. About 1,000 of the job losses are new—600 at Crewe, 350 at York and about 100 at Derby. A further reduction of some 350 jobs at Derby had already been announced last year but is being brought forward from 1988–89 to 1987–88.

The Government fully recognise the importance of the railways. British Rail is investing heavily in modernisation—a total of £3 billion since we took office, with a further £2 billion planned for the next five years. But, as the House will recognise, modern rolling stock needs much less maintenance and repair.

Three factors flow from BR's major investment in new rolling stock. First, from the moment that BR decides to order new rolling stock, heavy maintenance on the old stock ceases. Secondly, fewer modern vehicles are needed to provide the same level of service. Thirdly, new rolling stock itself requires less maintenance, and the design is such that much of it can be done by component exchange in the depots rather than in main BREL works.

Decisions on work load and employment are matters for BR and BREL. Naturally, both I and the Government greatly regret that further redundancies are now unavoidable. I say that because we recognise the human problems and personal difficulties caused by such a solution. I understand that BREL will be seeking voluntary redundancies and early retirements wherever possible.

Mr. Snape

Is the Minister aware that his latest batch of excuses just will not wash, that 87 per cent, of British Rail's locomotives and power cars entered service prior to the Government being elected in 1979; that the Central Transport Consultative Committee, in its latest report, draws attention to what it terms "massive overcrowding on trains" and demanded large-scale new expenditure on rolling stock; that if the Government were to implement a proper programme of mainline electrification and ensured that British companies were top of the list for new orders there would be a lot more business for British Rail Engineering Ltd. and better prospects for that company in the international market?

British Rail is about to put out to tender a major order for heavy freight locomotives. Will British Rail Engineering Ltd. take part in that tendering? If so, why is it once again running down capacity? The hon. Member for York (Mr. Gregory) said on local radio this morning that he would be in the House and would raise this matter to defend the interests of his constituents. Why is he not raising it, and why am I doing it for him? [HON. Members: "Disgraceful."] It is a fact. He said it on the radio this morning.

Mr. Speaker

Order. I remind the hon. Gentleman that that decision rests with me.

Mr. Mitchell

I am sure that the hon. Gentleman will wish to check whether my hon. Friend the Member for York (Mr. Gregory) also sought to table a private notice question. That must have placed you, Mr. Speaker, in a difficulty in having to choose between two applicants.

The hon. Gentleman said that the explanation that I gave to the House about the reasons for this reduction in jobs would not wash. He cannot deny that when new rolling stock is brought into operation there is immediately no need for old rolling stock to go for heavy maintenance. He cannot deny that new rolling stock requires less maintenance than old rolling stock requires. [Interruption.] There is no point in the hon. Gentleman shouting and blustering. He cannot escape the fact that, when he and others call for more investment in British Rail and when I accede to those requests, it inevitably means that less heavy maintenance is required.

Mr. Conal Gregory (York)

rose—

Mr. Speaker

Order. I must tell the hon. Member that he should not refer to any application that he may have made for a private notice question.

Mr. Gregory

I share with the whole House the sadness expressed in response to the private notice question. Redundancies are a matter of great concern to us all, including families, and I hope that we all sympathise with the families that are affected. If there have to be redundancies, will my hon. Friend give a commitment that he will ensure with British Rail Engineering Ltd. that they are on the most favourable terms possible and in line with redundancies in other nationalised industries? Concern about that has been expressed in the past.

Secondly, in his discussions with the management of British Rail Engineering Ltd., will my hon. Friend ask the company to put more resources into gaining a greater proportion of the export market in which there has certainly been a lacklustre performance?

Thirdly, given the success of bus deregulation, will my hon. Friend draw to the company's attention the possibility, as occurred some 15 to 20 years ago, of a greater amount of bus and coach heavy maintenance being undertaken to absorb the ups and downs in that sector?

This is a time of great concern and I hope that my hon. Friend will respond positively, thus reflecting the fact that the Government have invested substantially in British Rail resulting in the efficiencies that are now bearing fruit.

Mr. Mitchell

My hon. Friend asks about favourable terms for those who will lose their jobs. Certainly I shall respond to his request that I should discuss that matter with the chairman of British Rail. I know that British Rail will make every effort to find alternative employment for employees displaced from British Rail Engineering Ltd. British Rail hopes that the changes will be covered by voluntary redundancies and early retirement.

My hon. Friend asked about exports. British Rail Engineering Ltd. has put a big effort into exports, but the market is fiercely competitive. It submitted bids in 1986 for about £185 million worth of export work and members of staff have made no fewer than 300 overseas trips in the last six months in an endeavour to obtain export business. I hope that my hon. Friend will take some reassurance from that. I shall draw to the attention of the British Railways Board my hon. Friend's point about bus maintenance possibilities.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

Does the Minister recall that the Secretary of State came to my constituency as recently as 11 February and at a private meeting gave an undertaking to the Conservative party that there would be no change in the job position in BREL? Can the hon. Gentleman reconcile that with the fact that 400 recent job losses which were supposed to occur over three years occurred in less than six months? Yesterday, the chairman of BREL and of British Rail told me that another 600 jobs were to go in my constituency. How can the hon. Gentleman pretend that this is not the grossest betrayal of men who have worked hard in the industry all their lives and who have great expertise but will now be forced to tender even for work that they could do standing on their heads? How dare the Minister come here today and talk such arrant rubbish.

Mr. Mitchell

I am afraid that the hon. Lady has misunderstood what my right hon. Friend said in Crewe. He said that there was no change in the Government's policy. That is still the position. The redundancies do not arise as a matter of Government policy. They arise according to the level of demand for services provided by BREL for the British Railways Board. If the hon. Lady is as anxious as I am for work to come to Crewe, perhaps she will be a little more enthusiastic about the Channel tunnel, with all the work that it can bring.

Mr. Greg Knight (Derby, North)

Although the loss of any job is to be regretted, will my hon. Friend confirm that the main problem facing British Rail Engineering relates not to new build but to the reduction in maintenance work caused by advances in new technology and a fall-off in British Rail's freight business? Will my hon. Friend speak to British Rail and urge it to give employment priority to British Rail Engineering workers who are to be made redundant?

Mr. Mitchell

I can certainly give my hon. Friend the assurance for which he asks. I shall ask British Rail to ensure that, so far as is possible, those who are made redundant at BREL are offered other job opportunities on the railways. Nearly £600 million of investment in new rolling stock has been authorised in the past three years. That has a direct bearing on maintenance requirements.

Mr. James Wallace (Orkney and Shetland)

Clearly the job losses which the Minister has announced are appalling. I should like to extend the sympathy of my right hon. and hon. Friends to the communities, particularly the families, over which the cloud of redundancy now hangs.

Will the Minister confirm that one reason why Freightliner Ltd. has to close a number of depots in Scotland and in north-east of England is that it does not have resources available for investment in new rolling stock? Why are the Government presiding over a spiral of decline? Would it not be better if there was the political will to provide the resources for that new investment as this might not only stave off some of the redundancies which were announced today but put off the closure of depots which are threatened?

Mr. Mitchell

The closure of the Freightliner depots to which the hon. Gentleman refers is entirely a management matter. It was the judgment of those responsible that they would have a more efficient business which was able to win more business if they cut out some of their loss-making depots.

As for investment, the hon. Gentleman should know that I have not turned down any submission from British Rail Freight. It is for the railways to propose investment and for Ministers to respond to the proposal.

Mr. Robert Adley (Christchurch)

My hon. Friend does not need to hear about my credentials as a railway enthusiast. Is he aware that I have just come from Swindon? It gives me no great pleasure to say so, but when the works there closed it was considered to be a major disaster; in fact, the work force have almost all found other jobs in that growth area in a very short time.

There is, however, one thing that my hon. Friend could do. I should be very grateful if he would look at the question of railway investment and examine the criteria laid on British Rail by the Government which British Rail has to use in deciding what investment proposals to put to the Government. Does he agree that these criteria are extremely stiff? There are many investment projects which British Rail would like to undertake but which will not meet the Government's criteria. If he would ease the criteria, we could maintain more worthwhile investment in the nation's infrastructure through the railway system.

Mr. Mitchell

My hon. Friend and I share enthusiasm for railways. I recently visited Swindon myself to see the progress being made in job creation by British Rail as it seeks to ensure that alternative employment is provided for those who lost their jobs in BREL. My hon. Friend is quite right: it has had considerable success already, and a large number of people who lost their jobs have now taken up other employment.

As to the criteria for investment, the chairman has not approached us to ask for any change in them.

Mr. Ken Eastham (Manchester, Blackley)

Is the Minister aware that two years ago Mr. Bob Reid made some very boastful statements, telling the nation that he would buy 1,500 new locomotives and that everything would be rosy in the locomotive engineering industry? May I remind the Minister that, although he keeps on referring to lack of maintenance, engineers are quite adaptable and capable of changing from maintenance to new build? All these skilled men— electricians., coppersmiths, fitters, turners, and grinders—could be used on new build. Why does not the Minister do something about giving them some new locomotives to build instead of doing maintenance?

Mr. Mitchell

There are two parts to the answer. First, I do not give orders to British Rail. The British Rail chairman says to us that he wishes to invest in this, that or the other new rolling stock or to make some other major investment. If British Rail puts forward a further programme for new locomotives— we have already approved a substantial number— we would consider it very carefully. But every major investment in new locomotives will mean less heavy maintenance work.

Mr. Peter Rost (Erewash)

Does my hon. Friend agree that, if Opposition Members had supported the Government's efforts to speed up the Channel tunnel link instead of opposing it and filibustering, more jobs could now be saved at Derby and there would certainly be more orders?

Mr. Mitchell

My hon. Friend is quite right to draw attention to the potential value of the substantial amount of orders for BREL and other engineering works arising from the Channel tunnel. As to the proportion of those orders that BREL wins, it will, of course, depend on how competitive it is.

Mr. Ron Lewis (Carlisle)

Is the Minister aware that since 1979, when the Conservatives took over, British Rail Engineering Ltd. has closed roughly seven main workshops and shed about 20,000 jobs? The figures that British Rail has just announced will add to that total. Is he further aware that British Rail is now looking very closely at the west coast main line and has given notice that there will be a large number of redundancies on it, together with further closures such as at Kingmoor in my constituency? Is he proud of that?

Mr. Mitchell

Of course I am aware of the job losses and closures in British Rail Engineering Ltd. Indeed, I have taken a special interest in and followed a number of them, including Shildon, where work has been done to try to find alternative employment. I know of the closures, but I also know that that matter is directly related to the £3,000 million spent by British Rail on modernisation since 1979. I wish that the hon. Gentleman would stop spreading false rumours about the future of the west coast mainline.

Mr. Ivan Lawrence (Burton)

Is my hon. Friend aware that I have a number of constituents who work at the BREL factory in Derby and are therefore under threat, as does my hon. Friend the Member for Derbyshire, South (Mrs. Currie), who shares my concern in this matter? Would my hon. Friend consider what more assistance we might give to BREL in securing overseas contracts, particularly in the far east, by improving our aid and trade provisions, as recommended by the Select Committee on Foreign Affairs?

Mr. Mitchell

My hon. and learned Friend's final point is a different issue and I shall write to him about it. On the matter of exports, Ministers have been helping wherever British Rail Engineering Ltd. has indicated that such help would assist in clinching orders. Certainly that offer of assistance remains.

Mr. Michael Martin (Glasgow, Springburn)

Is not the Minister saying exactly what he said a year ago when he announced the closure and 3,000 redundancies at the Springburn works where, at the end of the month, we will be down to 300 employees? How can he tell the House that he will try to find alternative work within the railway industry when 3,000 people in my constituency left their place of work and will never see another job in British Rail?

Mr. Mitchell

The hon. Gentleman will know that there is a substantial number of job vacancies in British Rail, but not in Scotland, and that British Rail is having difficulty in filling them. As for his comment that I am saying the same thing today as I said 12 months ago, I do not think that consistency is necessarily wrong.

Mr. Joseph Ashton (Bassetlaw)

rose—

Mr. Dennis Skinner (Bolsover)

rose—

Mr. Speaker

Order. I shall call the two hon. Gentlemen, provided they ask questions about railway redundancies.

Mr. Ashton

Is it not a fact that it is the Conservative party's long-term policy to privatise and profitise any part of any nationalised industry that it can, including maintenance or contracts, just as it has done with the Health Service? Can the Minister give us an assurance that this is not the first step to reducing manpower in order to let the maintenance go to private enterprise?

Mr. Mitchell

The position on privatisation has nothing to do with the job losses that British Rail Engineering Ltd. has now announced. We have asked the chairman to tell us his proposals for the future of BREL. I have no doubt that he will consider, among other options, the possibility of privatisation, but I have no report or recommendation from him at this stage.

Mr. Skinner

Is the Minister aware that the people I have been able to speak to in my constituency who work at the Derby workshops and could well be affected by the announcement today said that there was a great opportunity for the Government yesterday to formulate a Budget that would have supported the infrastructure of Britain and provided jobs and would not have thrown those people on the scrap heap? It is nothing short of hypocrisy for the Chancellor of the Exchequer to go on television last night showing charts proving that Britain was providing more jobs than the rest of Europe put together, when we have this pathetic Minister coming to the House saying that another 1,600 workers are to be put on the Tory scrap heap. The truth is that the Government have written off millions of people in this country in the past eight years, and the railwaymen are now among them.

Mr. Mitchell

The hon. Gentleman wants increased expenditure on the railway infrastructure. I remind him that the increased expenditure for which he calls is likely to lead to a smaller requirement for maintenance and to fewer jobs for the people involved. In any case, I remind the hon. Gentleman that British Rail is in the middle of a massive modernisation programme involving expenditure of about £5,000 million, £3,000 million of which has already been committed.

Mr. Snape

On a point of order, Mr. Speaker. I understand that it is not customery for an hon. Member to refer to applications that may or may not have been made by other hon. Members. For that reason, I apologise to you for raising the matter and withdraw what I said.