What does the general election mean for the UK Railway Industry?

Regardless of who comes into power in this year’s general election, the outcome is likely to be significant for the Railway industry. As a currently ‘undecided voter’ who works in Rail, I was keen to further explore the views, opinions, policies and promises being made by the 2 main parties and how they would directly influence the sector as a whole. Here are some of my thoughts and findings;

The Conservatives

Last Friday saw David Cameron donning a rather fetching high-vis jacket as he visited the Railway in Dawlish, an area that most will remember as being quite literally battered by the poor weather last year. Following that turbulent time, Mr Cameron was very quick to praise the ‘orange army’ of Network Rail engineers for their work on getting the line back up-and-running, and it would appear that the Conservative party have raised a number of interesting Rail issues in their bid for victory this year.

HS2 is clearly going to be a gigantic element of this election. The conservatives are keen to see the entire project completed as initially laid out and have recently criticised Labour for their potential stalling and/or cancelling of phase 2 of the project (essentially all parts of the route north of Birmingham), going as far as to say that Labour and Shadow Chancellor Ed Balls was ‘slapping the face’ of the Midlands and the North of the country.

Away from Infrastructure, the Conservatives are also appealing to the commuter vote by proposing a 5 year cap on Rail fares. The ‘fair deal’ initiative will, apparently, save the average commuter £400 over the 5 years and will also apply to the London Underground and Bus networks. It is no secret that Britain’s Rail fares are significantly higher than the rest of Europe and with some commuters spending up to 17% of their salary on Rail tickets, this could be very appealing. There is currently no real answer however on how the Tories intend to fund this freeze which is likely to cost around £200m per year.

There have, of course, been ups-and-downs for the Rail industry during this most recent government. Despite the current fares freeze proposal, the fact is that Rail fares have risen by 20% on average under the coalition government and, despite this not being the governments fault directly, a lot of voters who don’t quite understand the network will see debacles such as the delays and queuing in London this Christmas as a fault of the coalition government. That being said, projects such as Crossrail have provided many jobs and prospects for UK Rail and there is no escaping the fact that under the coalition government, the UK Rail network has seen some significant upgrades and improvements with rail passenger numbers up by roughly 3.5% year on year. In August last year, Rail Minister Claire Perry claimed that the UK had seen a ‘rail renaissance’ under the coalition government and whether you agree with this or not, there have been a lot of positives.

Labour

Having outlined the Conservatives criticism of Labour regarding HS2 earlier, it is only fair to give you the viewpoint from Labour themselves. Ed Balls has claimed that there are ‘big questions’ over phase 2 of the scheme and that it would make much more sense to move focus towards linking the East and West of the country, at the same time claiming that the coalition government had not made a convincing enough case for HS2. The general idea for Labour, or certainly as Mr Balls outlined it, is that the East-West link will do more good for the economy and provide better value for money for the taxpayer. This proposal, as some will think of as HS3, is likely to link Liverpool to Hull via Leeds and Manchester and according to Labour will have more of an impact than continuing HS2 past phase 1.

Labour’s manifesto, announced this week, includes a claim to “Reform our transport system in order to provide more public control and put the public interest first." Which is all good and well, but what are they actually proposing? Well, among other things, Labour will;

  • Conduct a full review of passenger rail franchises
  • Create a 'new National Rail body' which will 'oversee and plan for the railways and give rail users a greater say in how trains operate'
  • Allow public sector operators to compete for projects

To be honest this does throw up a few more questions than answers and we will have to wait for these details to be clarified in more detail.

Perhaps in response to the Conservatives Rail fares freeze initiative, Labour has also announced that they too plan to freeze Rail fares. Under a Labour government, Rail fares would be frozen until the end of 2016 or more specifically - 'A strict fare rise cap will be introduced on every route for any future fare rises, and a new legal right for passengers will be created to access the cheapest ticket for their journey'. This freeze will cost roughly £200m, a figure that Mr Milliband claims will be found through scrapping road building projects in Somerset and the South Downs.

The manifesto’s claim of having a “new legal right” for passengers to get the cheapest ticket for their journeys will appeal to a large number of commuters, and although their fares freeze is not as long as the Conservatives, at least they have justified where the money will come from for it. It is also clear that Labour is committed to improving the UK Rail network, albeit having a different focus to their fierce rivals. ‘Public sector operators’ and ‘a new national rail body’ are likely to raise a few eyebrows in the industry until more clarification is given.

And So …..

It should be pointed out that this is merely the tip of the iceberg in terms of Rail and the general election. The next few weeks should certainly be very interesting. As for myself? Still undecided I am afraid! But whatever the outcome, it is sure to be another interesting few years for the Railway industry and those that operate within it.

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