Rail can drive growth and jobs across the country – now we need to unlock its potential
Manchester Piccadilly Station. Photo credit: Chris Chambers Yorkshire / Shutterstock.com
Robert Cook, Policy & Public Affairs Director
| Railway Industry Association
From connecting people with opportunities to supporting businesses and investment, rail has a key role to play in delivering the Government’s economic ambitions – but this requires confidence to invest.
With the Labour and Conservative Party Conferences getting underway in the next fortnight, much of the political discussion in Liverpool and Birmingham will focus on one central question: how can the Government deliver economic growth and create better opportunities across the country?
We at the Railway Industry Association (RIA) believe UK rail has a significant role to play in answering that challenge.
Too often, the railway is viewed simply as a transport service, moving people and goods from one place to another. But its importance goes far beyond connectivity. The rail network connects people to jobs and opportunities, helps businesses reach customers and markets, and supports a substantial industrial base across the country.
Better rail connections make it easier for people to access employment opportunities, help businesses attract workers from a wider area and support investment in towns and cities that might otherwise struggle to realise their full economic potential. These benefits are important in all of the nations and regions of the UK, where improved connectivity can clearly help unlock economic potential and support jobs and growth.
UK rail supports 640,000 jobs with more than 275,000 working in the supply chain. These supply jobs include major manufacturers, engineering firms and infrastructure and software specialists, as well as the myriad small and medium-sized enterprises that form the backbone of the supply chain. Together, they provide highly skilled, high-value employment in communities throughout the nations and regions.”
These are precisely the types of jobs the political parties should want to encourage. Rail supply chain roles are almost 30 per cent more productive than the UK average, while the wider rail industry generates some £41bn in economic value and £14bn in tax revenues each year. The businesses involved develop a skilled workforce which is also capable of supporting UK exports. For every job directly employed on the railway, a further four jobs are supported elsewhere in the economy.
Demand for rail continues to grow. Passenger levels are already at a historic high, and scenarios for future growth range from 37-97 per cent by 2050 compared to pre-pandemic levels. The Government has also set an ambition for 75 per cent freight growth by 2050. This trajectory requires clear planning and investment now.
The potential for rail to support growth extends beyond trains and tracks themselves. More than 85 per cent of the population live within five kilometres of a railway station, making stations strategic assets for unlocking new homes, commercial developments and regeneration projects. With the right approach, stations can play an important role in driving local growth, bringing together housing, employment and investment in well-connected locations. RIA has called for Station Investment Zones to help unlock this potential by bringing together the railway, local authorities, developers and investors.
Yet realising these opportunities requires one essential ingredient: confidence.
Businesses investing in and around the rail sector need certainty about future priorities and future work. That is why the ongoing debate around rail reform is so important. We welcome the creation of Great British Railways, but to get the economic benefits, the legislation and practical steps to set up this new entity need to ensure the industry has the certainty needed to continue investing in people, skills and innovation.
To unlock rail’s contribution to growth, Government should:
- Protect five-year funding cycles
Five-year funding periods, within a clear long-term plan, are essential, and the current draft legislation should be strengthened to safeguard this.
For businesses in the rail sector, funding periods are about much more than railway planning. They provide the confidence companies need to make long-term decisions. Businesses need to understand where future work is likely to come from so they can recruit and train staff, invest in equipment and facilities, develop innovative technologies and strengthen domestic supply chains.
This matters because rail projects often require years of preparation and substantial upfront investment. Without a clear pipeline of work, companies face greater risks and may delay investment decisions. Smaller businesses can be particularly vulnerable to uncertainty, despite often being among the most innovative parts of the sector.
- Make Great British Railways easy to do business with
There are huge opportunities to use procurement strategically to support high-quality jobs across the country, but to keep costs under control we must move away from piecemeal procurement and establish steady programmes of investment.
- Set out long-term investment pipelines
A stable and visible programme of investment delivers benefits not only for suppliers but also for taxpayers and passengers. It allows businesses to plan more efficiently, retain skills, improve productivity and deliver better value for money. By contrast, stop-start investment can increase costs, reduce efficiency and make it harder to maintain critical capabilities.
The stakes are significant. Rail already makes a major contribution to the UK's economy, but it can do even more. Alongside the Government's new ambitions for increasing rail freight and supporting economic growth, there is an opportunity to maximise the value of existing infrastructure, unlock development around stations and support high-quality employment across the country.
