What next for the rail industry?

Address by Paul Plummer, CEO, Rail Delivery Group at the National Rail Conference 12 November 2019

Thank you, Steve [Norris], as ever it is a great pleasure to have you in charge.

I know a general election is a busy time for you, as someone so active in public life, and as a keen observer of politics.

I also know your love of politics is matched only by your love of the railway, so I am really pleased you are here today.

I’ve been invited to speak on the subject of ‘what next for the rail industry’?

The obvious starting point is that no-one can predict with certainty what the railway will look like in ten or twenty or fifty years’ time, any more than a railway enthusiast in 1968 could have predicted the size, shape and technology of the railway today.

Back in the 1960s, at the hottest moment of Harold Wilson’s ‘white hot heat of the technological revolution’, one might have predicted that the motorway and road haulage would have reigned supreme, and future cities would be designed around the needs of the motor car, with perhaps monorails to get people from place to place.

The railway, it might have been assumed, would carry on in decline, reduced, perhaps, to a historical curiosity like the canals, or a minority pursuit like stamp-collecting or morris dancing.

But of course, things turned out very differently.

The story of Britain’s railway over the past three decades is a story of success:

I need hardly recite the figures to this audience – but I’m going to…

The railway contributes around £10bn to the economy every year, involving over 4,000 companies and supporting around 240,000 jobs directly and through our supply chain.

The wider railway industry supports some 600,000 jobs and contributes up to £36.4bn to the economy. Everyone from the person selling you that charger cable you forget to pack, to the person clearing up your table, to architects, designers and software engineers.

And we should say thanks to all of them, no matter the nature of their contribution. I am always reminded that in 2011 a former station cleaner at Victoria Station in London was elected the President of Zambia so who knows what talent walks amongst us?

Every day the railway gets 4.5m people where they want to go.

Each year rail freight transports more than one in four of the containers that enter and exit the UK via deep seaports, making sure our supermarkets have food on the shelves. When we leave the EU, we will see just how vital and complex a business this is.

As you know, we have a safety record now better than ever before, although never a cause for complacency, and we have seen passenger numbers double and a third more trains than 20 years ago.

Every 20 minutes 80,000 people – enough to fill Twickenham stadium – catch a train and every second three trains leave a platform somewhere in the country.

Add to this some of the magnificent railway infrastructure improvements – new stations, new lines, new rolling stock – and we can see a railway of which we can be proud.

And yet when we contemplate the next few decades, the crystal ball becomes clouded.

We can predict with certainty that the railway will not carry on as it has before. There is no such thing as the status quo on the railway – even if we tried to stay still, the relentless spirit of technological change that swirls around us will mean that change will come whether we embrace it or not.

In our industry, as in all industries, technology is unleashing transformative powers that we can scarcely comprehend, from nanotechnology to artificial intelligence.

And of course, hanging over all of us, like the sword of Damocles, is the threat of harmful climate change.

We should take a moment to recognise the efforts of those on the railway coping with the terrible flooding in South Yorkshire and Derbyshire. We have friends and colleagues in Doncaster, Derby, Chesterfield, Matlock and other places too, dealing with the consequences of biblical rainfalls and trying to keep the railway moving.

These extreme weather patterns are linked to change in the climate caused by our carbon emissions. The warnings have been in place for decades.

It is 30 years since Margaret Thatcher addressed the United Nations General Assembly in New York on the ‘urgency and importance’ of tackling carbon emissions. She said ‘the evidence is there; the damage is being done.’

Twenty-five years ago we had the Kyoto protocol, signing up major nations to reduce greenhouse gases.

Four years ago, we had the Paris Agreement to keep increases in global temperatures to below 2 degrees.

This year, a generation of school children have tugged at our consciences, pleading for a sustainable future.

And yet still, temperatures rise, the ice melts, the oceans fill with plastic, the coral reefs are dying, and a sustainable future seems as far away as ever.

And as an industry, we must be part of the solution – reducing our carbon footprint towards a net-zero target, offsetting and eliminating our use of carbon altogether.

We can point to the railway as a low carbon form of mass transport – we can celebrate our increasing use of electrification.

We can point to the contribution we have made in getting people out of their cars and lorries, and onto the railway, reducing carbon emissions.

But we all know there is more we can do, from reducing the use of plastic cups, to developing sustainable forms of fuel for the engines of the future.

Adopting a net-zero mindset will be transformational not just for rail but also for our society and economy.

Change, like winter, is coming.

We either embrace it, or get mown down in its path.

But the next question then is what kind of change, and what will change mean for the people who really matter – the passengers?

We meet during the opening weeks of a general election campaign where public services, like the railway, will rightly come under discussion. I welcome that – no institution should be free from scrutiny. We are open and transparent, and happy to inject some facts and figures into the public discourse.

I only hope that when the politicians’ media grids move onto the railway, and we get our few hours in the spotlight, we are the subject of an informed and dispassionate discussion, which enables the voters to make real choices.

One thing we have learned, surely, in the past four years that when you crystallise complex, multi-layered questions into a binary black-and-white choice, and subject that choice to simplistic sloganising, the outcome is unlikely to be to anyone’s satisfaction.

So when we debate the future of the railway, I hope we remember that the UK railway is already a public-private partnership.

That the operating companies have brought innovation and investment since the mid-1990s.

That the railway needs to expand to meet the growing demands of the travelling public, and that expansion has to be paid for somehow.

Since franchising began, passenger numbers have grown by 3.8% a year on average, compared to just 0.5% a year over the same period before.

The partnership between the public and private sectors means the nation has shared in the proceeds of the railway’s growth.

By carrying more passengers, the railway’s operating deficit has been cut by three quarters, saving taxpayers £1.5bn in 2017/18 alone.

This has freed up taxpayers’ money to grow the network or invest in other vital public services like the NHS and schools.

The bottom line is that the railway represents a successful blend of private and public experience, passion, commitment, knowledge, innovation and investment. The dynamism of the private sector combined with a great public service.

I can’t predict the future, but I can tell you what kind of future I would like to see on the railway, based on our long-term plan.

I want to see us deliver the more than £70 billion of public and private investment that’s been pledged for the coming years

We will have introduced 8,000 new carriages by 2025, as well as rolling out hundreds of refurbished-like-new carriages.

That means more seats and improvements like air-conditioning, plug-sockets and WiFi which our customers have every right to expect.

These modern new carriages are part of our plan to introduce 11,300 new services by 2025.

We have already introduced an extra 4,000 services a week since 2017, and by next year 140,000 services a week will be running, enabling passengers to benefit from more frequent trains.

With this combination of private and public investment, by the early 2020s we will have increased services across the country by a third in total compared with the late 1990s - moving more people and goods and better connecting communities across the country to new opportunities.

We’ve talked too about sorting out the mess that is our system of ticketing, making it easier to buy tickets that reflect your actual needs and actual journeys.

Increasingly, for example, passengers will want to be able to switch seamlessly from bus, to rail, to car, all on one ticket. Travel patterns are also changing, with over 70% of organisations expected to offer remote working by 2020.

Yet you’ll know that our outdated and bewildering fares system, rooted in regulations from the 90s, hasn’t kept pace with how people work and travel today, it doesn’t fully allow for integrated travel and it contributes to a sense that passengers can’t always trust they’re getting the best deal for their fare.

Indeed, if you spend any time talking to passengers, even seasoned commuters, there is always the sense that our system of ticketing contains secret money-saving hacks understood only by the expert few. In the future, I want you to be able to buy a ticket which reflects your needs and your journey, not your ability to game the system.

And we know change must go even deeper.

As I said earlier, we must cut our carbon footprint as an industry, and play our part in reducing car journeys, lorry journeys, and air and noise pollution.

We must recognise that the current system of franchising is not fit for purpose. That’s why we asked the Government to establish the Williams Review into future arrangements, and we have worked with the Review at every stage.

I hope it reports in full soon after 12 December and that ministers respond swiftly.

The industry itself called for a wide-ranging reappraisal of how the different parts are bolted together and put forward its own proposals for a better system.

Rightly, Williams will recommend big, bold changes to how the railway is run and the industry stands ready to help deliver the structural change that is needed.

We looked around the world at successful railways, each of which had private and public components, and we thought hard about changes in our society.

We are growing as a society – according to the ONS by mid-2031, the population will pass 70 million, and by mid-2043, it is predicted to reach 72.4 million.

And we are ageing as a society – there are 12 million people over-65 (that’s more than the population of Scotland and Wales combined), and 1.6 million people over 85 in the UK right now, and these proportions will grow. So of course we must make our services accessible to all.

We must view transport as part of a wider social and economic system – taking in housing, telecoms, healthcare, and local economies.

We can’t work in silos.

Some of our ideas are growing in popularity, for example a new independent organising body holding the whole industry to account.

It should be put in charge of the industry, acting as the glue that binds it together and sitting outside day-to-day politics so that everyone is working to meet the same passenger-centric goals, boosting accountability and standards and holding rail companies to account with fines and penalties where they fall short.

I think we should recognise that the government’s white paper won’t cover all the detail, nor should it. The details of implementation must be a matter for all of us. Managing change will be critical and we can contribute our not inconsiderable experience of that. I look forward to working with ministers, and perhaps the new rail authority, to make grand visions into workable solutions.

These are just some of the ideas and innovations we will discuss today. This is a room full of innovators and change-makers, people who know the realities, understand what works, are passionate about improvements.

I am enthusiastic about the day ahead, and the days ahead.

We are united in our desire to see a railway at heart of our national life, opening up opportunities in every region and nation of the UK, creating apprenticeships, supporting entrepreneurs, investing in design, science and engineering, bringing jobs to people and people to jobs.

Bringing friends and families and communities together.

Putting food into the shops.

Bringing goods to market.

Keeping Britain on track.

A safe, clean, punctual, affordable, comfortable railway – if we make the right calls now, it can be ours for decades to come.

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