Darren Caplan, Chief Executive of the Railway Industry Association looks at the role the rail industry will play in the UK’s economic recovery
As you’ll be reading this, you’ll likely be at – or may soon be attending – Railtex/Infrarail, a leading UK rail trade fair, and one which the Railway Industry Association (RIA) is happy to support. Railtex/Infrarail will be one of the first physical industry events many people have attended since the Coronavirus pandemic hit in March last year, having spent the past 18m months staring down a webcam to countless online meetings. I’m sure you’ll agree with me how great it is to once again be out and about, seeing old friends and colleagues and being able to network and engage with others, in a way that is simply impossible to recreate virtually.
There is also no better example of why our rail industry is so vital to the UK economy, and why it will continue to be well into the future. Between 7-9 September, rail professionals will arrive in Birmingham from all over the country, utilising our fantastic railway network to get to the trade show and using the show as an opportunity to showcase their fantastic goods and services. The UK railway industry should be proud of the role it played in getting us here, hopefully as we emerge on the other side of the pandemic. During the height of the various lockdowns and restrictions, the rail network’s role as a critical piece of infrastructure was clearly demonstrated. The industry helped transport key workers and resources around the country at a vitally important time. The sector also supported the UK when many parts of the economy – through no fault of their own – were shut down. At one point during the first lockdown last year, rail accounted for 25 per cent of all construction work taking place in the UK. We are grateful to Government and clients across the country for supporting the industry at such an important time.
The role of rail in an economic recovery As the world returns to something like normality, rail has just as important a role to play, particularly as the economic recovery will be the key issue of the coming years. Rail is a perfect candidate to lead this recovery, thanks to what we, at RIA, call the 4 ‘Gs’.
First, Growth: For every £1 spent in rail, £2.20 is generated in the wider economy. So the more we invest in rail, the more we will clearly boost investment, jobs and economic growth around the country more widely. Secondly, rail is Geographically spread. Our railway touches almost every part of the country, from Penzance to Paisley, so rail investment can benefit places that often can’t be reached by other Government policies, helping to support areas with high unemployment or social deprivation.
Thirdly, rail is Green. As RIA’s Rail Decarbonisation 21 Campaign highlights, rail contributes just 1.4 per cent of transport emissions despite carrying ten per cent of all journeys and accounts for just 0.5 per cent of all UK emissions. With the UK needing to reach Net Zero by 2050, and remove all diesel-only trains off the network by 2040 in England and Wales and 2035 in Scotland, we need to get on with further electrification and fleet orders of battery and hydrogen rolling stock.
And finally, rail is Global. Simply, the world is investing in rail – with the European rail body UNIFE estimating that even with the impact of the pandemic the global rail market will grow between one to 2.3 per cent each year up to 2025, and could grow at a value worth up to 204 billion euros per annum. Supporting the UK rail industry therefore not only helps deliver greater connectivity for passengers and freight at home, it also builds a competitive, global sector, supporting rail suppliers to develop capabilities that they can export abroad.
The continuing role rail will play
For these reasons – and many more – we can’t take our foot off the pedal when it comes to rail investment. In 2020, RIA published its ‘10 Reasons to Invest in Rail’ document, which has recently been updated, setting out that we believe rail has an essential future as the backbone of the UK’s transport infrastructure. The report can be found at www.riagb.org.uk/10reasons and whilst I won’t list all the reasons here, there are a few which are particularly pertinent.
One key reason is that rail is a long term game. When asked recently whether rail projects were still worth developing at a Transport Committee session, the Transport Secretary Grant Shapps answered strongly: ‘I think absolutely, unequivocally, yes. 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.’
The Transport Secretary is correct. Whilst habits may change, people will still very much look to travel whether for leisure or work after the pandemic. No online experience will beat heading to a country retreat for a holiday or meeting a business associate to thrash out a deal in person. What’s more, after every economic recession in recent history – in the 1980s, 1990s and 2000s – rail passenger numbers have bounced back after an initial slump. Another key reason is the long term nature of rail project investment. Parts of the UK rail network are nearing 200 years in age and are still in as much use (if not more) than when they were first built. Rail projects take time to deliver, so we’re not building projects for now, but for future generations. To make long term investment decisions on the future of our railway based on the two years of the pandemic would seem highly questionable.
What does rail need to lead the recovery?
Of course, the industry cannot deliver a recovery on its own – instead we need to work with clients like HS2, Network Rail and Transport for London and with the Government, to deliver a world-leading rail network. Crucially, rail suppliers need certainty from clients and Government as to what projects are coming down the line. That’s why RIA has been campaigning for the publication of the Integrated Rail Plan on the North & Midlands and for the Rail Network Enhancements Pipeline, a list of planned rail upgrades up to 2024. On the latter, the delay has seen over a £1 billion removed from the enhancements budget, but (at the time of writing) industry still has little idea of how this reduction in funding will impact projects, and which ones will be going ahead. Certainty and visibility is vital – it allows suppliers to plan, invest in staff and processes and thereby become more efficient, leading to greater cost effectiveness for rail projects. We also need to ensure we continue delivering on planned projects, meaning we deliver the full HS2 network – including the Eastern Leg – Northern Powerhouse Rail, Trans Pennine Route Upgrade, East West Rail and Crossrail 2.
We also need to ensure that we are decarbonising the network, so there needs to be a rolling programme of electrification and fleet orders of low carbon rolling stock such as battery and hydrogen trains. Our Rail Decarb21 campaign (www.riagb.org.uk/RailDecarb21) has been building up a coalition of support for these asks, with now three Parliamentary committees backing the campaign’s recommendations, including the Transport, Public Accounts and House of Lords Science & Technology Committees. There is also backing from across industry, with 17 organisations from across the rail sector signing a letter to the Transport Secretary calling for a rolling programme of electrification. It was therefore really positive to see the Government back these asks in the Transport Decarbonisation Plan published in July, and we look forward to working with them in the coming weeks and months to deliver on that strategy.
Rail is also an export. The Government should ensure rail has a ‘front and centre’ role as a key sector in Free Trade Agreements; after all, the sector exports some £800 million a year in goods and services and the Rail Supply Group’s Export Survey found that priority markets for UK suppliers align clearly with those of the Government – Australia, the United States, India and Canada etc. were all in the top ten. When asked which markets we could see greater rail exports to with support from industry and Government, Australia, the US and India came up as the top three. In particular, the Government can support the industry by reintroducing the recently closed Tradeshow Access Programme (TAP) which provided small amounts of funding for SMEs to exhibit at overseas trade fairs. TAP was highly successful – many rail companies report how the Programme has led directly to orders overseas, helping boost UK plc’s exports potential. RIA – along with trade bodies from across the economy – is urging the scheme to be reinstated or a similar programme introduced.
So as the sector joins Railtex/Infrarail this month, I really do look forward to catching up with many of you in the industry who I have only been able to see online over the past year. This tradeshow will reveal so much of the fantastic products and services that UK rail has to offer; and it shows we remain a vibrant sector and that we will continue to be a vital part of the economy well into the future. I hope that you’ll have a great show, meet both old and new friends and colleagues and that – together with Government and industry – we can help lead the economic recovery the UK so crucially needs in these uncertain times.