Government undervaluing UK rail industry by £25bn, research says
New economic research published by a leading UK rail representative body has highlighted the huge economic value the industry adds to the economy, with estimates claiming the country’s rail network contributes more than £36bn annually.
The findings from Oxford Economics published by the Railway Industry Association (RIA) in its latest report has shown that the government significantly undervalues the network’s contribution with it currently using figures that show an economic value of rail at £10.4bn. These figures are said to not take into account the wider rail network, including metro services and catering and retail at stations.
Furthermore, the industry is showed to provide around 600,000 jobs, generate £11bn annually in tax revenue and £2.20 of income from every £1 spent on the rail network. According to the paper, the sector contributes more to the UK than the food, drink and tobacco manufacturing and the chemical and pharmaceutical industries.
The report adds that the near-600,000 jobs supported by railway-related demand amount to more than the total number of employed workers in any UK local authority area outside of London. The estimate is another stark comparison to the government’s figures which suggested only 240,000 people were employed through the rail industry.
The RIA’s chief executive Darren Caplan says the latest report proves “the economic value of rail to the UK is considerably bigger than previously thought”.
“The implications of this report are clear,” Caplan added. “The UK rail system should not be seen just as a vital mode of travel - connecting businesses, friends and family, and visitors to the UK - but also as a key industry for the economy in its own right. We urge the government to consider and use the findings of this report when developing its industrial strategy agenda, negotiating trade deals with other countries once we have left the EU and when promoting our world-class exports offering overseas.”
Commenting on the report, Steve Cocliff, managing director of VolkerRail Group said: “We welcome the findings of the report today. At VolkerRail, the work we undertake creates a significant number of job, training and business opportunities either directly or through our supply chain, with a large proportion of the revenue generated feeding back into the local communities we work in. It is therefore very positive to see the economic benefits companies in the rail sector set out so clearly in this research”
Stephen Joseph, chief executive of the Campaign for Better Transport, added: "Rail is a low carbon and highly skilled industry. This new research highlights just how big a contribution it makes to the economy. There is a very strong case for the Government to build on this strength with a long-term investment strategy, including support for a long-term electrification programme, to promote rail as a pillar of the UK economy."