With the General Election 2019 just weeks away, the major political parties have begun to release manifestos.
Our Infrastructure, Projects & Energy team considered some of the key promises made about healthcare in a recent insight. Here, our attentions turn to a further major factor in the build up to the election – the rail industry – as we look at what the result of the General Election may mean for commuters, fares, HS2 and other future rail infrastructure based on promises made at the time of writing.
The Liberal Democrats' manifesto was released on 20 November and included a number of headline policies surrounding the future of the rail industry. These include a promise to freeze fares on peak-time and season tickets for the duration of parliament, in response to criticism of fares increasing when train operators' performance has been worsening. This will be funded by £1.6 billion in taxes collected over the parliamentary term.
One of the key causes of more disruption to the railways over the past decade is increased passenger use – in a context of serious constraints on capacity needed to run trains. A key part of the strategy to relieve this capacity problem is HS2, which is currently under review, which we discussed in a recent insight. The Liberal Democrats have committed to completing HS2, with the intention of putting more trains on the tracks and improving services. In addition, £15 billion investment in the rail network has been promised over five years should the Liberal Democrats win the election. This would increase the amount spent on rail infrastructure by two thirds, based on Network Rail's spend last year
Labour's manifesto was released the day after the Liberal Democrats'. Jeremy Corbyn has promised a programme of nationalisation should Labour win the election, with BT Openreach having been the headline target. Labour has made it clear that, as part of a set of new fiscal rules, a number of public sector assets will be brought back onto the government's balance sheet, as part of a restructure of the operations of Her Majesty's Treasury.
The rail industry, privatised in 1994, is set to face considerable changes should Labour come to power. Although it remains unlikely that the industry would be subject to one-step renationalisation, Labour have vowed to bring the railways back into public ownership by using options such as franchise expiry. This means that Labour's vision for renationalisation will be evolutionary, not revolutionary, with a gradual transfer to public ownership of each franchise transferring into national ownership as it comes up for competition.
With regard to HS2, the manifesto explains that Labour will complete HS2 and extend to Scotland, whilst delivering rail electrification and expansion. It is expected that Labour will continue to pursue the Northern Powerhouse agenda, with associated major rail investment. In addition, Labour has promised ring-fencing of funds for infrastructure projects developed regionally / locally, with democratic and transparent decision-making at a regional / local level. This looks to continue the trend of devolution, which the rail industry is currently benefitting from.
At the Conservative party conference, Boris Johnson spoke of an "infrastructure revolution this country needs." Within their recently released manifesto, the Conservatives have not offered certainty in relation to HS2, but have confirmed that they will consider the Oakervee review to decide the optimal outcome. Prior to manifesto release, Boris Johnson had suggested that the "huge" bill for the project must be reduced if HS2 is to go ahead and the Conservative stance within the manifesto remains consistent with the Prime Minister's.
A key Conservative policy is £500 million funding that will be used to "reverse the Beeching rail restructure of the 1960s" and reconnect smaller towns. The intention is to reverse the damage suffered since the Beeching lines were removed in the 1960's, which should enhance employment and offer more opportunities for those towns to develop into attractive places for commuters to live. The areas that will benefit will include Ashington, Seaton Delaval, Blyth, Skelmersdale, Thornton-Cleveleys, Fleetwood, Willenhall, and Darlaston. The Conservatives' promise of an extra £22 billion public sector net investment is likely to be targeted towards key public infrastructure projects, which will include railway investment.
All the major parties have committed to significant rail infrastructure spending should they come to power. HS2 continues to divide political opinion, particularly for the Conservatives, but looks likely to proceed irrespective of the result of the election. A Labour victory would see the most fundamental changes to the nature of the industry, but would not go as far as the immediate, wholesale renationalisation of the railways.