Darren Caplan is the Chief Executive of the Railway Industry Association (RIA). This is a sponsored post by the RIA.
As delegates arrive at the first in-person national Conservative Party Conference in two years this week, many will have travelled to Manchester by train.
What some of those rail travellers may not know is that over the past 18 months, the UK railway network was not just essential in transporting key workers and goods around the country during lockdown and restrictions, but that at some points last year, 25 per cent of all UK construction work was taking place on building, enhancing, and renewing the railway network. This provided crucial jobs and investment at a time when many economic and industrial sectors, through no fault of their own, were unable to function.
The Government deserves credit for funding rail at such a difficult time, ensuring NHS staff and care workers could get to hospitals and care homes, as well as enabling supermarkets to remain stocked and households to receive supplies which needed to be transported around the country, at a time when people couldn’t even go out to shops.
As we emerge from the pandemic and the economy opens up, rail can play an important role in the economic recovery. A new report commissioned by the Railway Industry Association, authored independently by researchers Oxford Economics, has looked at the last full year for which figures are available – 2019, the year before the pandemic hit – and the findings show that UK rail’s contribution to the economy was growing significantly:
- £43 billion GVA generated in economic growth, compared to £36.4 billion in 2016;
- 710,000 jobs supported, up from 600,000 in 2016;
- £14 billion in tax revenue secured each year, growing from £11 billion in 2016; and
- for every £1 spent in rail, £2.50 of income was generated in the wider economy, compared to £2.20 in 2016.
The report also looked at future scenarios for rail investment, based on National Infrastructure Commission research, which shows that every £100 million invested in rail supports 2,100 jobs in the rail supply chain alone. One can only imagine how much more of an economic powerhouse UK rail could be were it not for Covid.
Encouragingly, we are already seeing a strong recovery in rail passenger numbers and freight. Passenger numbers are now up to around 65 per cent of pre-pandemic levels and freight has returned to 100 per cent. It is increasingly clear – whether for leisure or business – people want to travel again after so long having not been able to. And more and more people are returning to workplaces, with much of the remote-working impact offset by an increase in leisure travel.
As Grant Shapps, the Transport Secretary, recently said, “If you think about other railway lines that were built 150 years ago – the West Coast, the East Coast Main lines – not two world wars, not recessions, not the Spanish Flu, none of these things stopped the inexorable growth in the need for people and goods to ultimately travel.”
As everyone now looks towards the Comprehensive Spending Review later this month, which will set out the Government’s spending plans for the next three years, it is vital we remember the role rail has played in the UK economy and can continue to play in the future. Particularly given the four “Gs”, that the Government is looking for in “Build Back Better” sectors, which can help the post-pandemic UK economy:
- Growth – as shown from the Oxford Economics report, rail is not just a strong sector in its own right, but it also catalyses substantial investment and growth in other parts of the economy too;
- Geography – there are few sectors that can level up like rail, which provides crucial connectivity across towns, regions, cities and communities;
- Green – investing in rail means investing in an inherently green industry, with rail contributing just 1.4 per cent of transport emissions despite carrying 10 per cent of all journeys; and
- Global – rail is a crucial export for the UK, and the railway industry globally is set to grow between 1- 2.3 per cent every year until 2025, meaning it is a market which really could help the Government achieve its “Global Britain” ambitions.
The Government has been supportive of the classic rail network in the last couple of years, but to enable rail to Build Back Better, there are some areas where we could collaborate better. The UK railway industry needs increased visibility of upcoming rail projects, including the publication of the much-anticipated Integrated Rail Plan for the North & Midlands and an update on the Rail Network Enhancements Pipeline (two years overdue!).
There needs to be a positive settlement for the next Network Rail funding cycle, Control Period 7, which seeks to maintain current levels of investment on Operations, Maintenance & Renewals. There also needs to be a commitment to delivering major rail projects, whether HS2 in full – including the Eastern Leg between Birmingham and Leeds – Northern Powerhouse Rail or the Midlands Rail Hub, to name just three.
The Government has already intimated support for a concerted programme of electrification investment, the roll out of battery and hydrogen trains, and digitalisation of the network (which increases capacity) – to enable rail to play its part in helping the Government reach Net Zero by 2050, this support now needs to be delivered on now. And if the Government wants to see greater rail-related exports to help achieve “Global Britain”, then rail needs to be included in the trade deals currently being negotiated and in future.
Finally, with the proposed changes to the railway industry suggested in the recent Williams-Shapps Plan for Rail, there is an opportunity to deliver even more from our rail network; but it does mean getting on with work now, and ensuring there is no hiatus in investment or work in rail whilst the sector restructures.
We hope that the opportunities provided by rail will be apparent to all those arriving in Manchester this week, whether travelling in by train or other modes. Now really is the time to seize these opportunities, so that rail can play that leading role in the UK’s economic recovery in the months and years ahead.
Join the Railway Industry Association, High Speed Rail Group and Rail Delivery Group at Conservative Party Conference – we are hosting the Rail Interview on Sunday, the Rail Debate on Monday lunchtime and the Rail Reception on Monday evening – all with a range of Ministers, politicians and stakeholders. Find out more here.