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THE CHEEK OF IT
by Chris Cheek
Rail Perfect Storm to Welcome New PM
Strikes damage a fragile recovery as commuters continue to stay away, but that will be just one of the challenges facing the new PM
The new round of industrial action on the UK rail network is damaging the industry’s recovery from the Covid pandemic. This is clear from the updates on postCovid transport demand published weekly by the Department for Transport, where demand briefly reached an average of over 90 per cent of pre-pandemic levels for one week in June and another in July. Later in June, the figure dropped to as low as 65 per cent, and since mid-July, the numbers have languished in the low eighties.
Anecdotally, whereas previous rail strikes have caused gross inconvenience, this round has largely been met with a shrug of the shoulders from the public, who have just spent another day working from home. This may be one reason the public has tended to be more supportive of the strikers than in previous disputes. In June, according to the polling company YouGov, around a third of the overall population were supportive, but this figure rose to almost half amongst the 18-24 year olds. Older people were much less keen, with 77 per cent of 50-64 year olds opposing the workers’ action.
This has proved to be a difficult position for industry managers and especially the Government. Adept media performances from union leaders have tended to undermine or devalue media appearances by ministers whose authority has in any case leaked away with the resignation of the Prime Minister. This has left a sort of Zombie government, waiting for the conclusion of the Conservative leadership election, which may well have concluded by the time you read this article. At the time of writing, though, a ministerial team whose jobs may well disappear within weeks is not likely to be taken that seriously – even in a popular and successful government, which this one manifestly is not.
So what might we expect of a new administration? Well whoever becomes Prime Minister and whoever he or she appoints as Secretary of State for Transport is not going to make that much difference to the fundamentals of this crisis (except possibly by caving in completely to the union demands, a decision which would certainly be redolent of the 1960s and 1970s).
This is because the crisis facing the rail industry (and indeed the whole of the public transport sector) is driven by the pandemic. The sudden lurch in inflation has been driven by post-Covid supply chain problems given an added twist by the onset of the invasion of Ukraine.
The first cause is the structural changes forced on our society by Covid – especially
NEWS IN BRIEF
GET INVOLVED WITH STATION IMPROVEMENTS
Community volunteers are being sought to help drive improvements at Chelmsford station and help make it more welcoming to passengers by ‘adopting’ the station. The Essex and South Suffolk Community Rail Partnership, in partnership with Greater
Anglia, would like to hear from greenfingered local people who would be interested in helping to install and maintain floral planters at the station. Greater Anglia provides funding to help cover the costs of small projects, tools and materials to help improve the station environment through its Station Adoption initiative. Greater Anglia now has over 290 adopters at over 117 stations across Norfolk, Suffolk, Essex, Hertfordshire and Cambridgeshire.
290 ADOPTERS AT OVER 117 STATIONS
LEVELLING UP BID RECEIVES FULL SUPPORT FROM COMMUNITY RAIL LANCASHIRE
Community Rail Lancashire (CRL), along with the East Lancashire Community Rail Partnership (ELCRP), outlines their full support for the proposed access improvement scheme for Accrington railway station that has been developed as part of Lancashire County Councils Levelling Up Fund bid. Accrington Train Station has seen significant growth in recent years following the opening in 2010 of the new booking office facility and the introduction of the direct rail service to Manchester in 2015. However, access at the station needs improvement to make it more accessible for all members of the community, especially those with mobility impairments. These access improvements for Accrington Station have been included within the Round 2 bid submitted by Lancashire County Council.
the rise of homeworking in the wake of the lockdown. According to the ONS Labour Force Survey, the number of people working from home full-time doubled from 16 per cent of the workforce in 2019 to 32 per cent in the spring of 2022. In addition, the proportion of non-homeworkers who worked from home on at least one day a week had risen to 14.3 per cent. Regional analysis showed that this number was as high as 24.3 per cent in London and 16 per cent in the rest of the South East.
It does not take too much imagination to realise that, for an industry that relied so heavily on the commuter market (47 per cent of all trips) before the pandemic, this shift is a severe problem. Add to this the falls in public transport use for shopping trips and personal business following the growth in online transactions and in business travel as online meetings have grown in popularity, and you have the makings of a disaster.
Almost more importantly, this forces the industry to rely more heavily on its only other source of funding – the government. And the question which everybody is still facing is: how permanent are these changes in demand? After all, we have only had six months since the last of the Coronavirus restrictions were lifted and life has got back to ‘normal’. But the intervening months have been full of stories about further mutation of the original virus, rising infection rates and the widespread expectation that the onset of winter will see a revival of the disease in one form or another. Is it too soon to discern a permanent shift?
This makes any decision in Government to turn the taps off and starting to make permanent cuts in rail services doubly difficult – is it too soon? And if we reduce frequencies, do we get overcrowding again? And what about climate change and modal shift: how do we achieve our (legally binding) targets if the network is full? And in any case, compared with the huge costs of owning and maintaining infrastructure and rolling stock, does the marginal saving of cutting the odd train here and there actually amount to a hill of beans anyway?
As if these questions did not pose enough of a problem, we then have the cost issues as well. Rail industry costs are, like everybody else’s, being driven higher by the fuel and energy crisis. Government (BEIS) statistics show that between Quarter 4 2019 and Quarter 1 2022, the price of fuel oil rose by 47 per cent, and the cost of electricity by over 35 per cent.
Which brings us back to the question at the heart of the current industrial relations problems – staff and how to afford them. In this situation, there are only two ways that rail managers can give any pay increases: one is to generate sufficient improvements in productivity to fund the increases internally. This is being tried in Network Rail and fiercely resisted by the trades unions. The second option is if the spending is sanctioned by the Department for Transport (and behind them, the Treasury) and funded by the taxpayer; in current circumstances, it is no surprise that the Treasury is resisting this option.
An added complication to this saga – which has not been present for several years – is the overall level of public sector pay. This was a major issue in the 1960s and 1970s, when wages in the nationalised bus and rail industries were largely determined by successive governments’ anti-inflation policies. This meant that wages fell behind market levels, and caused huge staff shortages, especially but not exclusively in London and the South East.
The effective renationalisation of the railways we have seen over the last three years means that we are back in this situation: even if the funds were there, rail workers could not be given a big pay increase because it might mean that other public sector staff would expect the same rise, which other sectors such as the NHS or local government could not afford.
Whichever way you look at it, the rail industry is going to be one of the many problems that lands on the desks of the new PM and the Transport Secretary in September. Whether it’s future funding for the existing network, investment in HS2 and other expansion projects or how to fix the festering industrial relations problems, the questions will have to be answered – even if they seem quite minor in the face of the other crises which are looming on the horizon.
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