Chris­tian Wolmar

CHRIS­TIAN WOLMAR ex­am­ines a new re­port look­ing at the fac­tors af­fect­ing the long-term growth in rail travel, and says it should be es­sen­tial read­ing for those in­volved in the fran­chise plan­ning process

Rail (UK) - - Contents - Chris­tian Wolmar

Fac­tors af­fect­ing rail growth.

THE dou­bling of rail pas­sen­gers since the mid1990s has been un­prece­dented and, in many re­spects, in­ex­pli­ca­ble. No co­her­ent the­ory of why the growth has been so strong over such a pro­longed pe­riod of time has been put for­ward.

His­tor­i­cally, there has been a strong cor­re­la­tion be­tween growth in in­come and the in­crease in rail pas­sen­ger num­bers. In the good times, pas­sen­ger num­bers have soared, and vice-versa. How­ever, dur­ing this pe­riod that trend line has been dis­rupted, and even the sharp eco­nomic down­turn which started with the bank­ing cri­sis of 2008 only caused a mo­men­tary blip in the fig­ures. Over the rest of this pe­riod, the num­bers of peo­ple flood­ing onto the rail­ways has greatly ex­ceeded the pre­dic­tions in con­ven­tional mod­els, and com­men­ta­tors (in­clud­ing my­self) have strug­gled to ex­plain what is hap­pen­ing.

Now, at last, a thor­ough and il­lu­mi­nat­ing piece of re­search has been pro­duced which of­fers the most en­light­en­ing anal­y­sis I have seen of this 20-year phe­nom­e­non. Do not be put off by the pro­saic ti­tle, Wider fac­tors af­fect­ing the long-term growth in rail travel, be­cause au­thors Ian Wil­liams and Kaveh Ja­han­shahi not only un­cover many an­swers to the fun­da­men­tal ques­tion of where the growth has come from, they also de­bunk some of the myths.

Let’s get one out of the way straight­away. Sup­port­ers of rail pri­vati­sa­tion claim that pri­vate sec­tor in­volve­ment is the un­der­ly­ing rea­son be­hind this higher-than-ex­pected in­crease in pas­sen­ger num­bers. How­ever, they have strug­gled to point to any­thing done by the pri­vate sec­tor which might have led to the rise. Sure, there has been lots of in­vest­ment as well as con­sid­er­able tech­ni­cal ad­vances (Bri­tish Rail would not still be field­ing its en­quiries on a phone line fa­mous for be­ing en­gaged), but most of that is a re­sult of an in­crease in pub­lic re­sources rather than the flow­er­ing of pri­vate ini­tia­tives.

The re­search ef­fec­tively de­bunks the no­tion that the pri­vate sec­tor has been re­spon­si­ble, by point­ing out that con­ven­tional mod­els failed to pre­dict the far greater than ex­pected rates of growth be­cause they re­lied on ex­am­in­ing fac­tors within the in­dus­try.

In­stead of look­ing at fac­tors within the in­flu­ence of the rail in­dus­try, such as fares, fre­quency, fa­cil­i­ties on of­fer and com­fort, the au­thors fo­cused on ‘ex­o­ge­neous’ fac­tors (Gor­don Brown’s favourite word, which means ex­ter­nal in­flu­ences over which the in­dus­try has no con­trol).

There has been, in fact, no in­crease in the av­er­age length of rail trips made by in­di­vid­ual pas­sen­gers, and there­fore the rise in pas­sen­ger kilo­me­tres trav­elled was down to an in­crease in the num­ber of trips. Yet, the of­fi­cial fore­casts un­der­es­ti­mated by around 30% the ac­tual growth.

That is be­cause the model did not con­sider fac­tors such as em­ploy­ment rates and the type of jobs that were be­ing cre­ated. The au­thors say: “Job growth in Eng­land and Wales since 1995 has been strong­est in many of these cat­e­gories that have a high pro­por­tion of rail com­muters. Sec­tors that have seen jobs al­most dou­ble over that time pe­riod in­clude in­for­ma­tion and com­mu­ni­ca­tion ser­vices, pro­fes­sional sci­en­tific and tech­ni­cal work, ad­min­is­tra­tive and sup­port ser­vices, and real es­tate ser­vices.”

In other words, white col­lar work­ers who of­ten need to be based in cen­tral city ar­eas. In­deed, the au­thors found that job growth in pro­fes­sional, sci­en­tific and tech­ni­cal work led to an es­ti­mated ex­tra 190,000 rail com­muters alone, while em­ploy­ment growth in in­for­ma­tion and com­mu­ni­ca­tion ser­vices added an ex­tra 90,000 rail com­muters.

Mul­ti­ply that over a year, with an es­ti­mated 250 re­turn jour­neys for each of these peo­ple, and the growth fig­ures can be­gin to be un­der­stood.

Lon­don, of course, is key. The num­ber of jobs in the cap­i­tal since 1995 has in­creased at nearly dou­ble the rate than the av­er­age across Eng­land and Wales - 49% rather than 27%. And cru­cially, “whereas in the 1970s and 1980s pop­u­la­tion growth was fastest in ru­ral ar­eas and stag­nant or de­clin­ing in dense ur­ban ar­eas, this sit­u­a­tion has been re­versed since the 1990s, such that pop­u­la­tion growth is now fastest in dense ur­ban ar­eas”.

There­fore, it is the boom in ur­ban liv­ing which is the pre­dom­i­nant growth fac­tor. There is also the sim­ple mat­ter of pop­u­la­tion growth, much of it due to im­mi­gra­tion by peo­ple un­likely to own cars.

In­deed, cars (or rather the ab­sence of them) are an­other cru­cial as­pect of this story. One of the fac­tors that has af­fected rail use in this pe­riod was the change in the early 2000s to com­pany car tax­a­tion, which pre­vi­ously sup­ported the pur­chase of these ve­hi­cles and ef­fec­tively en­cour­aged own­ers to make use of the cars in leisure time, too. With com­pany cars now no longer so fi­nan­cially at­trac­tive, rail has ben­e­fited - once a car is no longer used for busi­ness trips, rail is the main al­ter­na­tive for many peo­ple.

The wider trend of re­duced car own­er­ship in ur­ban ar­eas - for ex­am­ple, there was been a 22% de­cline in cars per adult in in­ner Lon­don be­tween 2004 and 2017 - has also been cru­cial, be­cause those in house­holds with­out cars are three times more likely to make busi­ness trips by rail.

But what of the fu­ture? There is a warn­ing from the au­thors of this re­search. It only cov­ers the pe­riod up to 2016, so con­se­quently has missed the re­cent de­cline in sea­son ticket use. We still don’t know, de­spite a slight re­cov­ery in the first quar­ter of this fi­nan­cial year, whether this is part of a long-term trend. But the au­thors sug­gest it might be.

They also note that the poli­cies which have af­fected the growth are of­ten the re­sult of gov­ern­ment de­ci­sions, and that these could re­sult in changes in the other di­rec­tion.

For ex­am­ple, al­ready the fact that we have had nine years of fuel tax in­creases be­ing scrapped, whereas rail fares have con­tin­ued at (or above) the rate of in­fla­tion un­abated, has def­i­nitely pushed more peo­ple onto the roads. This trend may well con­tinue un­less the fis­cal pol­icy is changed.

The au­thors stress that rail us­age is de­pen­dent on “poli­cies that in­flu­ence lev­els of car own­er­ship and road net­work per­for­mance, pat­terns of em­ploy­ment, and the lo­ca­tion of jobs and hous­ing. As Gov­ern­ment poli­cies and cir­cum­stances change, it is not clear that these in­flu­ences would nec­es­sar­ily con­tinue to sup­port rail growth in the fu­ture.”

In­deed, I was speak­ing to a Lon­don plan­ner the other day who ques­tioned the as­sump­tion that Lon­don pop­u­la­tion growth will con­tinue in the fore­see­able fu­ture. I have long been scep­ti­cal of fore­casts sug­gest­ing it will, sim­ply be­cause life in Lon­don is be­com­ing un­af­ford­able - not just for peo­ple do­ing min­i­mum wage-type jobs, but even for young pro­fes­sion­als start­ing out their ca­reers such as doc­tors, lawyers and (es­pe­cially) teach­ers.

The au­thors warn that if there is a re­turn to peo­ple no longer want­ing to move to ur­ban ar­eas, and a re­turn to an in­ter­est in liv­ing in small towns or ru­ral ar­eas, then “we could re­vert in­stead back to the sit­u­a­tion be­fore the 1990s when rail pas­sen­ger de­mand was in grad­ual de­cline”.

More­over, the rail in­dus­try would be pow­er­less to do any­thing about it: “In that case the fu­ture tra­jec­tory for rail pas­sen­ger num­bers would be very dif­fer­ent to that ex­pe­ri­enced over the last two decades, ir­re­spec­tive of what fu­ture ac­tions the rail in­dus­try it­self might adopt in re­sponse.”

No won­der the fran­chise sys­tem has be­come in­creas­ingly com­plex to man­age. No end of clever con­sul­tants (who now cost on av­er­age around £7 mil­lion for each fran­chise bid­ding process) will ever be able to guess the fu­ture. This re­search is es­sen­tial read­ing for any­one in the rail in­dus­try work­ing on mod­el­ling, whether of po­ten­tial new schemes or of fran­chise bids.


The types of jobs be­ing cre­ated led to an in­crease in rail jour­neys, es­pe­cially into Lon­don, ac­cord­ing to the au­thors of a new re­port into long-term rail­way trends. Wolmar con­curs that a boom in ur­ban liv­ing has been the pre­dom­i­nant growth fac­tor. Greater An­glia 379019 rests at a busy Lon­don Liver­pool Street on Novem­ber 29 2016.

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