Rail 914: A crisis like we have never seen before

‘Crisis, what crisis?’ There are many people repeating the words that Jim Callaghan actually never used. These are the arguing that we have been here before – 9/11 and the fear of skyscrapers, the breakdown in the railway post Hatfield, the 2008 financial crisis, etc –and afterwards both the railways and the economy recovered.

I’m afraid this time it is different. I am reiterating this in my column in an effort to ensure that people understand the extent of what is happening both in the railways and in the wider world which hopefully will ensure they start to mitigate its effects. Indeed, the economy is wrecked, with unemployment soaring and businesses set to go bust once the furlough scheme is ended. That in itself will have an impact on the railways whose income is highly correlated with employment levels.

That would be bearable as the railways have survived such downturns before but this time they are not facing a single setback but a series of interwoven crises that are difficult to disentangle and which together put the future of the whole industry at risk. As well as the impacts of Covid – both direct, such as the need for people to socially distance on public transport and indirect such as the effect on employment, there is the collapse of the franchising process, the failure to keep control of costs by Network Rail and, indeed, the train operators, and the saga of Crossrail which is undermining the whole investment process in the industry. Meanwhile, HS2 is being built and will absorb a vast amount of money that could be so much better spent on other railway and transport projects such as, like in France, a tramway system for every major town and city. Don’t be fooled, as some HS2 supporters argue, that this money is separate from the rest of the railway budget. HS2 has a lot of enemies and they are massing to take revenge on the railway, but that is another subject and I am diverting from my main theme, the crisis in the industry.

To the optimists who argue that it will soon be back to normal, let me outline my anecdotal evidence. Everyone I speak to who works in offices reckons that things will never be the same as before. All three of my children who work in offices say that there are no plans to make everyone return to work as before, and evidence from companies big and small suggests that the scale of the change may well have been underestimated even by the pessimists. One source, who works in the City, said that he had heard of clients a company that employs 400 people which expect to provide offices for 20-40 in the future. An architect friend, who has 30 staff, reckons they will provide for half a dozen, with perhaps a meeting room for the whole team to meet once a month or so. And so on….Surveys suggest that many people who have been WFH – working from home, a new acronym for the English language – actually prefer it. Of course some do not but they are, so far, in a minority. Few expect to work at home every day, but actually even fewer expect to work in their office five days per week.

The loss of this commuter market has important consequences for the railway. On the one hand, the experience of smelling your fellow passengers armpits is one that few will miss. However if this trend continues, and i am convinced it will, it seems likely that over time it will, the whole business model of the railways falls apart. Effectively, Intercity travel is mildly profitable – or was in the days of BR, commuter travel washes its face, and regional railways lose a fortune. That is why we have the social railway, a recognition of the railways’ enormous externalities – the benefits that accrue to people who do not necessarily travel on them such as motorists and business owners.

What is so disheartening is that so little is being done to bring people back to the railway. There is no equivalent of eat out to help out or any other such exciting initiative, like in Belgium where as far back as in June, the government announced that every resident would get 10 free train tickets in order to stimulate the economy. Of course the latter might not be appropriate here but something, indeed anything as an initiative would help. The Evening Standard, a sadly diminished paper, has at least had the oomph to ask on its front page why senior politicians, both national and local, are not travelling on the Tube and the trains to show that they are safe.

The Rail Delivery Group, bless its cotton socks, has launched a rather quaint campaign with the hashtag #railtorecovery and is asking people to publicise on social media why they are taking the train emphasising the fact that it is safe. That’s all very well but really is the sort of thing that might have come out of a brainstorming session from a bunch of primary school kids rather than from a group of major companies with vast PR resources at their disposal.

Where is the beef? It is astonishing that six months after rail passenger numbers plummeted, and there was talk of a reform in the ticketing system, it still has not happened. To be fair to the RDG, the government seems to have stymied the introduction of more flexible season tickets. An article in City AM on September 14 clearly blamed ‘government inactivity’ for the failure to introduce the idea which is backed by the RDG.

This could be done now. The railways have effectively been renationalised and all the revenue is going to the government. We are about to get a new set of ‘emergency recovery measures agreements’ that will confirm that the private sector’s role in the industry is now a mere management one and that control resides in Whitehall. Despite this, the old canard that any such measure will lead to lost revenue is apparently has yet again prevented any progress, even in the face of rail passengers numbers still being below 30 per cent of last year’s figures. The fact that even this minor measure has not been agreed upon  by the Treasury  shows the extent to which neither the government, nor many in the rail industry, understand the scale of the crisis the industry faces.

 

 

Didcot ready for business

 

On a more cheery note, it was delightful to visit Didcot Railway Centre for my first face to face business meeting post lockdown. I had originally been in contact with Graham Hukins, the head of visitor experience, because I had confessed, at a talk at the annual Railway Heritage Awards, that I did not know how a steam engine works, a terrible confession. He volunteered to show me with some of the wonderful engines they have in action there on a short little stretch of track.

Instead, however, when I dropped in early in August, Covid had ensured there were more pressing matters to discuss. How was the Centre, which had just reopened, coping and going to survive. It was in fact great to hear about how Graham and his boss, the director Emma Jhita, had gone about the task of coping in a post Covid world so well and so positively.

On the day I visited, there were, for the first time some 300 people there and their beautiful King Edward II  was in steam but to really ensure financial viability, they need some days with far more than that and to attract them they put on special events.  However, that is not possible at the moment, and instead Emma and Graham were looking at ways of engaging visitors. In the past, for example, periods without an engine in steam were called ‘static days’, not a good way to engage people, and now they have been renamed as ‘discovery days’.

While the task of operating in a socially distanced world is not easy, the positive way that  Graham and Emma are addressing the challenges was in great contrast at the time to much of the output of the train operators which seemed to be issued with no thought of the effect it would have on the post Covid-19 world.

Next year is the 60th   anniversary of the opening of the centre, which has huge potential given the size of the site, on which a small branch line has been built, and the great collection of 30 locos and a vast array of other railway material including 50 wagons and carriages. There will be a variety of events including, hopefully, a talk from me but at the centre is the plan to restore a 1466, a 0-4-2 tank engine, the centre’s first locomotive which has been out of steam since 2000. Emma and Graham are confident that not only will the centre survive, but it will continue to thrive. It is all about a can do spirit rather than despair.