Written evidence submitted by the Rail Delivery Group (RDG) (LRS0056)
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Rail Delivery Group
1. The Rail Delivery Group (RDG) brings together the companies that run Britain’s railway to deliver a better railway for customers and the communities we serve. All passenger and freight rail companies are members of the RDG, as well as Network Rail and HS2.
2. Through this time of national crisis, the rail industry has been working together to ensure that the railway continues to deliver a dependable service so that critical workers can get to work, essential goods can be transported and those who need to make essential journeys can do so.
3. The decision of the Government to offer temporary support to most passenger operators through Emergency Measures Agreements (EMAs) brought stability to the industry and enabled operators to focus on doing what is right by the country at this time of crisis, specifically keeping the railways running for essential workers whilst protecting staff safety.
4. In response to the easing of lockdown measures, train operators have now introduced new timetables designed to provide the maximum level of capacity possible for customers who need to travel and support the economy as it reopens. Alongside this, the industry has launched a Safer Travel Pledge, which sets out the steps operators are taking to keep people safe when they travel, including extra cleaning, more staff and providing hand sanitiser points at stations and the steps passengers can take to help preserve capacity on the network, for example avoiding travelling during the peak.
5. This approach is designed to provide assurance to those who want to travel by rail that it is safe to do so as well as ensuring that demand is managed, but no longer supressed, to preserve capacity and enable social distancing
6. Rail has an important role to play in helping the UK recover as the economy reopens and businesses restart. This submission outlines how the railway could do this and the policy decisions that can facilitate this and ensure that as the UK recovers, changes are embedded which can lead to a better, greener and more sustainable future.
7. We would be happy to provide further written and oral evidence on any of these matters to this inquiry.
Rail’s role in the post-pandemic recovery
8. The UK’s economic recovery from Covid-19 will be a truly national endeavour and one which the railway is determined to play its full part in. Rail has an important role in facilitating economic recovery, especially for sectors such as leisure and tourism which rely on the railway to enable people to travel to venues and locations. We already work closely with these sectors, including with organisations such as VisitBritain, and we are in discussions about what can be done, when the time is right, to attract more people back to the railway and encourage, amongst other things, more leisure journeys by rail.
9. RDG has been working closely with businesses more generally, through groups such as the CBI, to enable them to plan their return to work and the reopening of premises and offices in a way that protects their staff who travel by rail and preserves capacity on the network.
10. To this end, we have published guidance for businesses, as well as specific advice for the hospitality industry, on how they can help to keep the railway safe, for example by staggering start and finish times for staff or changing opening hours to avoid peak travel periods. Work and planning is now underway for a further service uplift in September to coincide with the return of schools and the likely reopening of many offices.
11. Three further areas of work are currently the focus for RDG, all of which would help to provide the right frameworks allowing the industry to better support recovery and enable the UK transition to a cleaner, greener future.
A. Evolution of EMAs to include incentives to grow revenue
12. A the time of writing, there remains uncertainty over what follows the Emergency Measures Agreements (EMAs) which have temporarily transferred cost and revenue risk to the Government from train operators. The current EMAs are due to expire on 20th September and the industry is working with the Government to agree what support is provided after this time.
13. Given projected demand and prevailing economic conditions, it will be necessary for government support to continue although the industry wants to see this evolve to better protect the taxpayer and provide the framework and incentives to allow private sector operators to innovate, drive efficiency, grow revenue and continue investment in new services and rolling stock.
14. The private sector working in partnership with the public sector has shown over the last 25 years that it can, with the right framework, regulations and incentives, deliver value for money, improved services for customers and operators, boost economic growth and productivity and ultimately reduce the level of taxpayer subsidy going to the railways. The industry would welcome the chance to demonstrate this again.
B. Comprehensive reform of the regulations governing rail fares
15. The current pandemic will lead to changes in the way people lead their lives which will result in long-term changes to travel patterns. A shift was already in evidence before the lockdown, with the rise of flexible and home working meaning fewer people undertaking the traditional nine to give, five-days-a-week commute between the home and office. We now expect this trend to accelerate considerably, with many more people commuting on only a part-time basis or not at all.
16. Conversely, we expect that the demand for business (e.g. travel for specific meetings or client or site visits) as well as leisure travel will grow over the coming weeks, months and years. In the short term, there is pent-up demand to see family & friends and take holidays and ‘staycations’, all of which were prevented by the lockdown. In the longer term, flexible and home working will give people new opportunities for leisure trips in the middle of the week and could encourage more weekend getaways as people choose to work remotely from different locations.
17. The rail industry wants to be able to reflect these changing patterns of travel and the way people choose to live their lives through the products and ticketing options that passengers are offered. While operators are already examining ways this could be done within current regulatory frameworks, fundamental, root and branch reform of the regulations underpinning the rail fares system is needed to deliver the products passengers want and to encourage more people to travel by rail.
18. The current fares structure is complicated and restrictive, which makes it difficult to offer the more flexible fares and ticketing options that passengers will increasingly demand. There are over 55,000 separate fares currently in the system which can deter customers from using the railway as they are often unsure whether they have paid the best price for their journey.
19. There are also inefficiencies within the existing structure as a result of regulatory and historically mandated fares that make it difficult for rail to compete with different modes on particular routes at certain times of the day. For example, the heavily regulated off-peak return fare, which is set at an artificially low level, is offset by increasing fares at peak times which makes it difficult for the railway to compete with other transport modes.
20. This leads to poor use of capacity on the network, particularly in the ‘shoulder peak’ when passengers have to choose between a more expensive but quieter ‘peak’ train or a cheaper ‘off-peak’ train shortly afterwards which will often be full. Passengers are also left with little flexibility when they travel home and need to decide when buying their ticket in the morning if they want to travel home in the peak or off-peak, sometimes forcing passengers to wait for hours for the first off-peak evening train unless they buy a new ticket.
21. Replacing the current set of fares regulations would allow for much greater flexibility and a better range of fares for travellers, particularly those on long distance leisure routes, while preserving the ‘walk-up’ railway for those who need it or prefer to buy their tickets that way. A ‘best-price’ guarantee would be introduced giving all customers confidence that they have paid the best price available for their journey when they book their ticket
22. Fares reform would ensure rail fares were able to cater for part-time workers and the many who, in response to the lockdown, will be mixing their time much more between home and office-based working. As well as part-time season tickets, passengers will be able to tap in and out with their bank card knowing they will always pay the best fare for the journey they’re making and giving them maximum flexibility to choose how and when they travel.
23. Reform that encourages more people to use the railway is also critical as it will facilitate the modal shifts that are needed to deliver a significant reduction in Britain’s carbon footprint over the next ten years. Rail is already a naturally low-carbon transport mode, being responsible for less than 2.5% of total transport emissions, and reforming fares could encourage an extra 300 million people to travel by rail, preventing up to 1.2 million tonnes of CO2 emissions over 10 years from people travelling in cars and planes.
C. Environmental protection by decarbonising the railway
24. RDG is supportive of the Government’s commitment to achieve net-zero carbon emissions across UK industry by 2050. UK rail accounts for around 2% of total transport emissions and about 0.6% of the UK total. Rail carbon emissions per passenger km have been cut by nearly 30% since 2005 - with rail’s strong environmental performance helping to reduce UK carbon emissions by up to 7.7 million tonnes every year. With 7,000 new, greener carriages being introduced this number will keep increasing.
25. While as a sector transport has become more energy efficient, since 2016 transport has been the single-largest contributor to UK Greenhouse Gas (GHG) emissions. Even though 2050 is a generation away, infrastructure and policy decisions made now will directly affect the railway’s ability to meet this target in a cost-effective way. Industry must not therefore place all its focus on 2050 but instead adopt a step-by-step approach to smooth the transition to 2050, which will deliver real carbon reductions to the UK over the next 30 years.
26. RDG are fully supportive of the Decarbonisation Task Force report published in July 2019 as well as Network Rail’s Traction Decarbonisation Network Strategy (TDNS). Decarbonisation of the railway is not so much a technological issue, as most of the science already exists or is being developed and trialled and will be ready far in advance of 2050. The largest challenge that the railway faces is how to implement the recommendations of the Task Force and TDNS in the most efficient and effective way and to ensure that the right policy frameworks are put in place and investments made over the coming years.
27. To achieve the full decarbonisation of the railway, clear and consistent long-term environmental policy is essential so that industry can develop and implement a strategy to reduce carbon emissions in-line with Governmental targets. The Government must ensure there are aligned incentives that establish clear accountability and induce behavioural change in the transport sector so that the risks and rewards of working towards carbon net-zero are shared collectively.
28. Such targets should be outcome-based without a tightly specified process in order for the most cost-effective and innovative solutions to be adopted. Within an increasingly devolved transport landscape nations and regions are already developing their own environmental strategies and targets. For example, Transport Scotland have already outlined their ambition for Scotland to be net-zero by 2045, if not sooner. Where possible, targets should be consistent at a GB-wide level to make that transition to net-zero as efficient and seamless as possible.
29. The Williams Review presents an opportunity to embed such incentives within the railway, including environmental targets and commitments being included within future management contracts. These should include carbon targets and commitments but extend to other environmental impacts such as air quality, waste and water. Should the Review recommend the implementation of a National Rail Body, we submit that it should take responsibility for carbon monitoring and environmental regulation of the rail industry.
30. This would involve collecting emissions data to better understand operator emissions in order to identify and prioritise abatement opportunities. Until now, the quality of environmental data has varied significantly. If targets are to be included within management contracts, and to inform interim targets between now and 2050 it is essential that there is an industry agreed definition and process for collecting emissions data.
31. We also believe that rail freight can play an important role in helping the UK decarbonise. With every freight train producing 76% less carbon per tonne than the equivalent transport by road, rail freight already plays a leading role in a low-carbon logistics sector today. As economic activity begins to return, rail freight can support a green restart of the UK economy by delivering significant and immediate carbon reductions via growth and modal shift.
32. This is in-line with existing Government transport policy to encourage modal shift towards rail which is supported by the Mode Shift Revenue Support (MSRS) scheme and the Freight Facilities Grant (FFG) in Scotland and Wales. Customers in the logistics sector are often highly price-sensitive and rail freight is a high fixed cost industry so initiatives like MSRS and FFG enable rail to compete against other modes, so it is important their future is assured. A growing rail freight sector would also help to decongest some of the UK’s busiest roads as each rail freight journey can carry the equivalent of up to 76 HGVs.
33. To enable all of this though there will need to be significant investment across both the public and private sector over the coming years to ensure the necessary infrastructure and systems are in place by 2050 - it is imperative that this process starts now.
34. There is a real appetite in the industry to do this and to make the changes needed to build a better, greener future. We submit that the Government should use the process of national economic recovery to reinforce their commitment to decarbonise UK industry by 2050 through policies and investments that symbolise a green restart.
 The RDG’s submission to the DfT’s consultation Decarbonising transport – Setting the challenge can be found at https://www.raildeliverygroup.com/about-us/publications/consultations/12606-2020-07-30-decarbonising-transport/file.html