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Darren Caplan is the Chief Executive of the Railway Industry Association (RIA), the national trade association for UK-based suppliers to the railway industry.
On Wednesday, Chancellor Jeremy Hunt delivered his Spring Budget. Rail didn’t feature high up on his list of priority areas, especially given the news that part of construction on HS2 Northern Leg will be delayed by two years had already been pre-briefed.
However, building more capacity on the UK rail network has never been more urgent. Contrary to often misleading reporting, passenger numbers have been returning to rail travel in droves, and rail plays a key role in helping to power the UK economy and decarbonisation.
Just over a year ago, at the start of 2022, passenger numbers were barely half of pre-pandemic levels. Yet a year on, Department for Transport data shows that on Friday 10 February, passenger numbers hit 100 per cent of pre-Covid levels for five days in a row, which of course included weekends and the alleged WFH days of Monday and Friday. On Wednesday 22, they reached 103 per cent.
Further, revenues have been hitting 90 per cent of pre-Covid levels too, with every prospect this will increase in the future too.
This return to rail has taken place with the background of widespread industrial action on the network, some passengers having poor customer experiences, and the uncertainty over rail restructure hanging over the organisations which are delivering services.
Clearly, the story is that as we recover from the pandemic, people are going back to their previous routines of working, visiting friends and family, and enjoying leisure and hospitality. The remote working revolution has been over-reported too, with so-called hybrid-workers increasingly spending more time in the workplace.
According to the Office of National Statistics Opinions & Lifestyle Survey, only ten per cent of people are actually work remotely every day, over 50 per cent go to the workplace every day, and at the time of writing around 35 per cent of workers using public transport to get to work.
So despite the sometimes negative noises, rail does not need post-pandemic managed decline. It needs the exact opposite: sustained investment to keep up with growing demand.
The Government has already partly recognised this with its commitment in November to major projects: schemes like HS2, Northern Powerhouse Rail and East West Rail.
Last December’s announcement that rail Operations, Maintenance and Renewals is to be maintained in the next five-year control period (CP7) to at least the levels of the previous five years (including a small real-terms increase) is to be welcomed.
However, supporting British rail is not just important to enable passengers to get from A to B. It is also sustaining an industry which is significant for UK plc, as well as one which has generally paid for itself through £14bn in annual tax revenues.
Oxford Economics showed in 2021 that the railway industry supports 710,000 jobs, £43 billion in Gross Value Added, and for every £1 spent on rail, £2.50 is generated in the wider economy.
Not only is growing rail imperative to catering for growing passenger and freight numbers on the railway, but it can also play a strong helping-hand in powering the British economic recovery too. It should not be seen as a cost on the public purse, in the way that it is sometimes portrayed.
Finally, investing in rail is also crucial for the Government if it wants to hit its decarbonisation objectives, getting all diesel-only trains off the network by 2040 (2035 is the Scottish Government target) and to making rail Net Zero by 2050.
Rail plays a small part of the carbon problem, but can be a big part of the solution. To take just one example, a single freight train removes up to 76 lorries from the roads, significantly cutting carbon emissions.
Yet at the current level of investment in, for example, electrification and battery and hydrogen powered trains, the 2050 target will be nowhere near hit.
Currently the UK has only 38% of track electrified compared to 57 per cent in mainland Europe; and, according to Office of Rail & Road data, between 2020 and 2022 the amount of electrified track actually fell by 7km, from 6,049 to 6,042!
So the Railway Industry Association and our members have six key asks of the Government.
Commit to investment pipeline certainty and transparency
Certainty and visibility of future investment plans generates best value for taxpayers and investors. It is crucial for making sure the industry gets the right skills and equipment in the right places to deliver efficiently.
Invest in major infrastructure projects
Major rail projects are transformational for the communities they connect, wider economy, and in transitioning the UK to clean transport. Recent Government commitments to HS2, East West Rail, and Northern Powerhouse Rail are welcome, and other major schemes should be a question of when, not if.
There is no question that the UK will need this capacity, and early and consistent commitment is the way to secure best value for money and catalytic benefits from the economy.
Accelerate decarbonisation and green growth
On the current trajectory of investment, the UK will not meet its legal obligations on Net Zero. Starting a steady programme of investment now will reduce more carbon sooner and be much more cost-effective than investing later.
RIA’s RailDecarb23 campaign calls for:
Get on with rail reform
While the Government’s recent commitment to Great British Railways is very much welcome, we still need clarity on detail and a long-term strategy for rail. Lack of clarity about the structure of the railway can deter investment and prevent rail from attracting the finest talent.
Innovation is essential, not just for boosting efficiency and productivity, but for the railway to rise to challenges such as climate resilience. There is significant progress in research and development, however a step change in behaviour and approach is needed to ensure adoption of new technologies.
Grow British rail exports
British rail has a global reputation, so there is great potential to grow rail exports, boosting trade and also increasing resilience of the UK’s supply chain e.g. creating new SME jobs. The Global Market Study conducted by European trade association UNIFE last autumn forecasts rail markets to grow by three per cent every year to 2027.
So it is clear that for reasons of capacity, the economy, and decarbonisation, we need to continue as a country to invest in rail.
The strong passenger return to rail makes this all the more imperative, given that rail is a long-term game and the work to grow rail – both on the rolling stock and the infrastructure side – needs to take place straight away if we are to have the capacity we need both now and in the future.
The Government has made a good start on this in terms of committing recently to some major projects and funding the classic network in the coming years.
It now needs to go further by delivering on the six asks above, to really enable rail to deliver for passenger demand, help to power a strong economic recovery, including enabling levelling-up, and play what could be a significant role in the Government’s aspirations on Net Zero.