Putting the UK’s economic recovery on the right track
By World Infrastructure Journal-
A recent report commissioned by the Railway Industry Association (RIA) shows that rail is essential to driving growth in the UK – making the case for rail to become even more of a priority for policymakers.
In the wake of the new National Infrastructure and Construction Pipeline (NICP) plan, a report has been published that indicates transport should be an even greater area of priority. The plan, which intends to allocate £70 billion towards the update and expansion of transport networks between 2021/22 and 2024/25 (and £32 billion from then until 2029/30), currently places transport as an area of key priority. Research suggests, however, that the UK may be benefit intensifying that focus.
The latest research from Oxford Economics indicates that the impact of rail on GVA means that transport may be key to a successful economic recovery. Capable of driving growth and investment, as wells as creating jobs, the report shows that prior to the Covid-19 pandemic rail was growing year on year, “and supporting even more jobs and GVA than just a few years earlier”.
The study suggests that further investment in rail would offer an excellent return that would support the growth of other sectors. Darren Caplan, Chief Executive of the RIA, pointed out that the report showed, “every pound spent in rail generated £2.20 of spending in the wider economy [in 2016], yet by 2019 this had risen to £2.50”.
Oxford Economics reports that between 2016 and 2019 the GVA provided by rail grew from £36.4 to £43 billion. In that same time frame, the number of jobs created by rail increased from 600,000 to 710,000 and the tax revenue provided by the sector increased by £3 billion.
The report also investigated the potential for future rail investment. Using data from National Infrastructure Commission (NIC) research, the report suggested that a 50 per cent increase in rail investment would create an additional £5.6 billion per year between 2025 and 2029 for the wider economy, and 104,000 new jobs within the rail industry alone.
The report argues that “rail is not just an important sector in its own right, but is also crucial for UK plc more widely, its economy and connectivity”. It provides a convincing economic case for an industry that also provides significant environmental benefits, particularly through diverting passengers away from less sustainable modes of transport.
As the UK looks to balance its twin ambitions, to become a stronger economy but also a greener one, it would thus seem that rail ought to be seen as more than an auxiliary support to the government’s broader economic recovery ambitions. Instead, rail should be central to those plans. “With the right government policy and support, UK rail can continue to be the economic powerhouse the UK will need in the months and years to come. ”
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