The Economic Contribution of UK Rail, published 2021
FOREWORD DARREN CAPLAN, CHIEF EXECUTIVE, RAILWAY INDUSTRY ASSOCIATION (RIA) The railway sector has always been a source of economic growth, jobs and investment for the UK. Not only does the railway network support passengers and freight users to get where they need to be, but it is the backbone of the economy, with a strong rail supply sector behind it. This report shows that rail’s impact grew even stronger in the year before the Coronavirus pandemic hit: in 2016, for every £1 worth of work on the railway system itself, £2.20 of income was generated elsewhere in the economy, whereas by 2019 this had grown to £2.50 of income generated. This means that not only is rail an important sector in its own right, but it is also crucial for UK plc more widely; and, pandemic notwithstanding, this importance was growing. This study, The Economic Contribution of UK Rail, commissioned by the Railway Industry Association (RIA), provides independent analysis by Oxford Economics on the state of the sector in 2019. It is the second such study, the first one published in 2018 following evaluation of UK rail’s economic contribution in 2016. Of course, much has changed in the UK since 2019. The Coronavirus pandemic impacted almost all aspects of the economy. In rail, the various restrictions and lockdowns since March 2020 saw passenger numbers significantly reduce on the rail network, as Government guidance urged the public not to travel. Although, at the time of writing, passenger numbers had started to return significantly. During the various lockdowns, rail played an essential role, helping key workers and goods travel around the country at a critical time, and supporting the economy when other sectors, through no fault of their own, were unable to function. 2020/2021 also saw the railway network being renewed, rail projects progressed, and new and refurbished rolling stock fleets built and developed, supported by strong leasing and asset management. The railway industry welcomed the support the UK Government and rail clients like Network Rail, HS2 and Transport for London provided the sector during those first 18 months since March 2020. With restrictions, at the time of writing, easing and as more of the population are vaccinated against the virus, RIA is confident passenger numbers will return back to their long-term upwards trend. DfT figures in August 2021 show the number of journeys being made by train recovered to 60% of prepandemic levels, and this was before the expected autumn ‘return to the workplace’. Even with the advent of flexible working, it is likely the majority of people who have the option to work remotely will still spend a significant amount of time in workplaces, meaning the return of commuting; and early indications are that very many more leisure journeys than previously are taking place in the evenings and at the country. The indications are that rail will still be a vibrant transport mode, and historically, there is little actual evidence that – as with previous pandemics, wars, and economic crises – passenger numbers will not return to previously high and increasing levels. Indeed, both the 2021 Williams-Shapps Plan for Rail and the Government’s Transport Decarbonisation Plan describe rail as the backbone of the transport system, the important role rail will play in reaching zero carbon emissions, and the potential for rail growth. Given the data of this study is from 2019 – the latest date where detailed economic data is available – the impact of Coronavirus is not captured. This report instead shows a growing, vibrant sector before the pandemic hit in 2020 – one that had grown considerably since 2016 and which is supporting £43 billion in economic production (GVA), compared to £36.4 billion in 2016, 710,000 jobs, compared to 1
