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Thursday, May 30, 2024

Labour Shadow Chancellor warns of looming job losses at Hitachi factory, calls for government action

Hitachi Rail could start redundancy process at County Durham plant as early as June, Rachel Reeves says

Hitachi could begin the process of laying off staff at its County Durham factory as early as June, according to Labour’s Shadow Chancellor.

The future of the huge train factory in Newton Aycliffe has been thrown into doubt amid worries about a gap in orders.

Labour Shadow Chancellor Rachel Reeves. Image: Wikipedia

And Rachel Reeves has now warned that the Japanese manufacturing giant could begin a redundancy consultation in just a couple of months’ time if the Government fails to act before then to protect the site’s future.

Labour and union leaders have been urging Tory ministers to trigger an extension to the company’s contract to build trains for the West Coast line in order to protect its 750-strong workforce.

Work on Hitachi’s existing contracts is expected to decline by this October, with the company warning it faces a production gap with no new deals in place in the short-term and has been “reviewing all remaining options”.

Ms Reeves, who visited the Hitachi plant on Wednesday and met with bosses, told the Local Democracy Reporting Service that a Labour government would seek to “salvage the wreckage” if the party comes to power later this year.

Speaking on a visit to Cramlington on Thursday morning, the Shadow Chancellor said: “The frustrating thing is that we are not the decision-makers today and there are decisions being made now that, if we were in government, would not be the decisions we were making. So the thing we are doing right now is putting pressure on the Government to bring forward new procurement, exercise the option to build the additional trains for the West Coast Line, and give greater certainty about the HS2 timetable.

“The sooner the election is, the easier it will be to undo the damage that the Tories are causing at the moment. The longer it is, the harder it will be to reverse it.

“The business said yesterday that the consultation on redundancies will start in June. I don’t know if there will be an election before June, I really hope there is, but the likelihood is that there won’t be.

“The contract that they have runs until October but after that they have no work until HS2. I want to come in and salvage the wreckage. I just hope there is something left to salvage by the time the Government calls a general election.”

Asked if a future Labour administration would realistically be able to return jobs to the plant if redundancies went ahead before an election is held, Ms Reeves added: “I really hope so. Part of the reason to go yesterday was to tell the management team,  and I also want them to pass on the message to the ultimate bosses in Japan, that change is coming. There will be a general election this year and if Labour wins that election we will make those commitments to them. We want to start working in partnership now to salvage the wreckage, but unfortunately the decision-makers today are making it harder.”

The Department for Transport called the Shadow Chancellor’s comments “inaccurate” and said they did not “reflect the complexity of the process”.

A spokesperson said: “Rail manufacturing plays an important role in growing the UK economy, supporting British jobs, and delivering better services for passengers.

“The Government is committed to supporting the entire sector and is working with all rolling stock manufacturers, including Hitachi, on the future pipeline of orders which we expect to remain strong in the coming years. More recently, new long distance trains have been procured on LNER and the tender process for new trains on TransPennine Express is live for all manufacturers to bid for.”

Hitachi said it was committed to finding a viable future for its factory.

A spokesperson said: “The North East skills base and supply chain we have built has delivered social value and levelling-up. Maintaining these benefits is in the national interest.

“Despite the lack of certainty, we remain committed to working with all stakeholders to find a viable way forward for our state-of-the-art manufacturing facility in Newton Aycliffe.

“Preserving regional skills and supply chain will allow us to be competitive in future procurements and support British economic growth.”

Ms Reeves was speaking at the Merit construction company’s base in Cramlington, which she visited alongside Labour’s North East mayor candidate Kim McGuinness and Cramlington and Killingworth parliamentary hopeful Emma Foody.

The Shadow Chancellor repeated her stated ambition to deliver 27,000 jobs in green industries across the North East.

She said there was “huge potential” for the North East to become the “clean energy power centre of the UK” – with developments in offshore wind, carbon capture and storage, and green hydrogen.

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