Rail chaos puts UK on track for some serious economic damage

Good connectivity is the lifeblood of a modern, thriving economy – so how much is the ongoing disruption costing UK plc?

Crunched up, sat on a suitcase by the door of an overflowing toilet. Two hours standing up. Or seated, but stuck in purgatory (somewhere near Hatfield), as the conductor tells passengers: “I’m sorry, we’re trapped”. And that’s if the train is running at all.

Britain’s railways shouldn’t be like this. In their 2019 manifesto the Conservatives promised a “transport revolution”, though it’s doubtful they planned this to involve a near rebellion on the 18:33 to Leeds.

Failing railways are, however, more than a vehicle for national annoyance. Good connectivity is the lifeblood of a modern, thriving, modern economy, and a powerful symbol of whether things are going in the right direction or not. Given our ongoing rail nightmare, it’s becoming clear the country is on track for serious economic damage.

Just how costly strikes, delays and cancellations are for the economy is tough to quantify with precision. But if the rail industry can talk up the economic benefits of new infrastructure when lobbying for funding – such as a £42bn boost for Britain from London’s Crossrail, and £92bn from HS2 – then the same must be true, to an extent, in reverse.

Train operators reckon passengers spent £133bn a year on food and drink, hotels, entertainment and shopping before the Covid pandemic, while suggesting that if 20% of rail usage switched to cars it could fuel an extra 1m tonnes of CO2 emissions a year and 300m hours of lost time due to extra congestion.

Some of those benefits are vanishing fast. Rail cancellations have hit a record high, with more than 314,000 fully or partly cancelled trains in Great Britain in the year to October. Rail users in the north of England are bearing the brunt, with Avanti West Coast, TransPennine Express and Northern the worst culprits.

an Avanti West Coast train
‘The combination of Avanti’s poor service and strikes has been devastating. The service is so poor and so unpredictable that people aren’t planning to travel.’ Photograph: Luciana Guerra/PA

Jeff Nash, owner of the Potbank aparthotel in Stoke-on-Trent, knows a thing or two about the costs of rail chaos. Just a 10-minute walk from the station on the site of the old Spode pottery works, the disruption is costing his business thousands of pounds in cancelled bookings.

“The combination of Avanti’s poor service and strikes has been devastating. The service is so poor and so unpredictable that people aren’t planning to travel.”

Recent strikes cost two days of bookings, losing him more than £3,000. The biggest losses come when big events are on, or Stoke City are playing at home. He’s also stopped making his own regular business trips to London.

“It’s the poor service by Avanti that’s worse than the strikes,” he says. “The website has no availability if you want to go to London in two weeks’ time. It asks you to register for notifications. As if it’s ‘don’t call us, we’ll call you if we’re going to run a train’. Then there’s a mad scramble, like you’re queueing for a Taylor Swift concert or something. But this is really important infrastructure we’re talking about.”

Analysts at the Centre for Economics and Business Research thinktank estimate that strikes alone could cost the economy almost £700m in lost output, by stopping people from getting to work who cannot do their job from home. Meanwhile, the hospitality industry says strikes could cost the sector £1.5bn, similar to the level of disruption caused by the Omicron wave of Covid last year.

The impact of disruption on the railways could be minimised. More people are able to Zoom in to meetings from home since the Covid pandemic, while some of the work of those who can’t get to work due to train problems will be carried out by other staff, or performed on another day instead.

Before the pandemic only about 10% of people in Britain commuted by rail (including the London Underground), mostly in the capital and big cities. Almost half worked in IT, finance and professional services, so are more likely to be able to work from home. And as anyone driving into a big town on a weekday morning knows, most people commute by car.

However, these are not excuses for allowing the railways to crumble. People taking fewer car journeys is vital for hitting net zero carbon, while face-to-face meetings will always remain important. Not all jobs can or should be done remotely. Even after Covid, good transport links remain a key reason for businesses and their people to pick one place or another to locate.

Speak to train operating companies and they would acknowledge there have been economic consequences from strikes and other cancellations, at a time when they want to encourage more people back on to the railways after Covid.

Reflecting lower passenger numbers, rail operators’ revenues are 20% down on 2019 levels, while strike action has cost up to £300m since June in lost sales. A spokesperson for the Rail Delivery Group, which represents operators, said it had spelled out to unions the impact that “destructive and counter-productive strikes” were having on the wider economy.

“The devastating impact of the pandemic simply made more urgent the case for long-needed reforms to working practices.”

The industry argues that reforms will help fund higher pay for an updated workforce, while putting the railways on a more sustainable footing, and cutting reliance on taxpayer subsidies after a £16bn bailout during the Covid pandemic. For its part, the government says it’s “committed to helping the industry reform and modernise” to ensure it can offer value for money.

However, there is a strong case for more investment by the state, not less.

While Boris Johnson’s levelling up agenda largely tried to make empty rhetoric look solid, where the former prime minister was right was to promote the importance of better transport for breaking down regional inequalities. It was a vote winner in 2019 that has resulted in zero change whatsoever.

Where Johnson got it wrong was to focus on investment in physical infrastructure, without giving enough thought to what really makes a good service work: its people. If by “modernisation” rail operators and the government mean inadequate pay, fewer staff and unreasonable changes to working conditions, they clearly do not recognise the importance of railways to Britain.

A rethinking of outdated transport ideas is required. Instead of allowing the rail network to wither on the vine while pumping more money into road building, the government must come up with real solutions. More investment in transport and people is key. There are heavy economic costs without it.


Richard Partington

The GuardianTramp

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