Hundreds of jobs secured as £500m train deal gives ‘lifeline’ to rail workers

6 December 2024, 19:52

A new £500m contract for 14 new trains from FirstGroup will secure hundreds of jobs at Hitachi’s County Durham factory.

Hitachi's £500 million deal with rail operator FirstGroup will secure hundreds of jobs at the factory.

Its Newton Aycliffe plant will build 14 new trains, with an option for an additional £460 million investment.

Sir Keir Starmer said a deal struck by Hitachi has given a lifeline to hundreds of jobs at a County Durham train factory and will relieve the anxiety of rail workers.

Declining orders had left the plant and its 700 workers uncertain about their future.

Hitachi's UK and Ireland director, Jim Brewin, said the contract was a "positive step forward" and “just recognition for the hard work and patience of our teams.”

But the chairman of the Japanese company warned that if the northern leg of HS2 is not revived by Labour, jobs at the factory could be in jeopardy.

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The Prime Minister visited the factory before the election and accused the then-government of leaving Britain's rail manufacturing sector "teetering on the brink".

He returned to the site on Friday, saying that workers had been "anxious" when he last spoke to them "because they feared there was going to be a gap between the contract they're working on now and the next contract".

He added: "They knew what a gap means, which is that people might lose their job - huge impact.

"I stood before them and said, 'if we win the election and form a government, I give you my word that we will do everything we can to try and make sure there's a deal that gets to fill that gap, takes away the anxiety'."

Starmer said the Government can be involved in such private sector deals by "setting the strategy, being clear about the orders that we need, a longer term strategy and doing the encouragement that is needed to ensure these deals take place."

However, Hitachi's chairman Toshiaki Higashihara warned that if Labour does not revive the Birmingham to Manchester leg of HS2, which was cancelled by former prime minister Rishi Sunak, jobs could again be at risk.

"If [the northern leg] stays cancelled, then the volume of work at Newton Aycliffe goes down," he told the Financial Times.

"So the issue is rising in terms of the extent to which we must think about manpower,” he continued.

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"If the Labour government doesn't re-examine plans within one year, it's going to be a problem."

Sir Keir replied that the last government made a "complete mess" of HS2 but did not appear to suggest that he would consider reinstating plans for the northern leg.

Downing Street has previously rejected reports that Labour could reverse the decision and extend the line beyond its current planned stretch.

Sir Keir said on Friday: "We are committed, obviously, to the stage between London and Birmingham.

"We've got a strategy for rail across the country, which is then going to be measured in years, not months, not chopping and changing.

"And we will work with Hitachi and others to make sure that we get the rolling stock we need where we need it.

"And it'll be the same as we've done with this deal, which is understanding what's needed, working with the sector, not against the sector, but being a government that does actively pursue these jobs."

A Department for Transport spokesperson said: "We are committed to boosting infrastructure and growth across the country, with today's announcement of £500 million investment for Hitachi helping secure the future of Newton Aycliffe.

"This Government inherited a very difficult financial position but we remain fully committed to delivering HS2 from Euston to Birmingham, which is what Hitachi and Alstom have been contracted for rather than the northern leg."

Friday's deal will see FirstGroup lease 14 new trains, a total of 70 cars, for use on its new Carmarthen-London route and other Hull Trains and East Coast Mainline services.

He also thanked local MPs and North East Mayor Kim McGuinness, saying they had "worked tirelessly in support of this private sector investment".

Ms McGuinness hailed the deal, saying it was "great news for Christmas for workers at Hitachi in Newton Aycliffe".