Rail has an important role to play if we are to rebalance Britain’s economy.
There is much political consensus around the need to rebalance Britain’s economy. The question is how?
Infrastructure investment is one of the few tools politicians are willing and able to use and rail investment is at the centre of this, unpinning both the Chancellor’s Northern Powerhouse and One North’s plans to bring together city authorities in Manchester, Liverpool, Leeds, Newcastle and Sheffield.
This attention is long overdue and timely. As new research commissioned by Campaign for Better Transport shows, the north’s rail network has been getting a raw deal for decades, denied the programme of renewal and upgrades seen on much of the south east’s network.
The Invitation to Tender to run Northern Rail and TransPennine Express services from 2016 is expected imminently.
This will need to redress cost cutting going back 40 years, which has resulted in widespread use of low quality diesel Pacers trains, de-staffing of stations, and removal of station buildings.
Reversing all of this will come with a hefty price tag. Previous failure to invest means Northern Rail is lumbered with aged rolling stock, 87 per cent of which needs to be refurbished or replaced by 2020.
The prime minister has said the cost of replacing outdated trains is one ‘everyone has to share’. This implies Northern Rail fares will be raised to pay for improved services.
This would be unfair, demonstrating an approach not applied anywhere in the country.
For instance, when a major part of the Southern’s train fleet became due for replacement 15 years ago, the total costs were far higher than those needed to update Northern Rail’s crumbling fleet, and came hand-in-hand with a major re-electrification programme.
Yet recognition of wider benefits meant no thought was given to asking southern commuters to pay higher fares for significantly improved services.
So, why is the Northern Rail franchise being treated differently from Southern? The answer – based on the Department for Transport’s analysis – seems to be the belief that Northern Rail is heavily subsidised compared with other franchises and must do more to pay its way.
This logic has already been used to introduce an unfair and counterproductive evening peak ticket price on Northern Rail, increasing some fares by up to 117 per cent for passengers travelling both into and out of many city centres.
Northern Rail’s fares were not low to start with. When the differences in average wages are taken into account, Northern Rail passengers already pay significantly more per mile than their London commuter counterparts.
In reality, Northern Rail’s relatively high subsidy is a direct consequence of the large geographic area it serves, the complex nature of its network (with no single ‘hub’ network to operate) and the fact that, with shorter trains, its revenue per train is lower than the national average.
It is also worth noting that the higher earning intercity network in the north was separated out as TransPennine Express when the franchise was created a decade ago so no cross subsidy can be achieved, unlike many other franchises.
Failing to make the necessary upgrades to services and rolling stock on Northern Rail would also undermine the benefit from big investment which has already been committed.
The Northern Hub around Manchester, and north west electrification schemes are already underway and will come on stream in the 2020s. These are designed to greatly improve the frequency and quality of services, but this will only be realised if the Department for Transport commits to more and better trains as part of the new franchise.
Rail has an important role to play if we are to rebalance Britain’s economy. The government must support growth through high quality, more sustainable transport infrastructure. That means investing to create modern, high capacity rail services for the north of England, of the type which already benefits most of the south east.
Andrew Allen is a policy analyst at Campaign for Better Transport. Follow them on Twitter
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