2024 Budget impact on Rail

[LNW-GW Joint]

Clearly they don't agree. A lot of government capital spending is going up - NHS going up 12% for example, but transport is being cut. I think fuel duty freeze, but rail and bus fares going up also points towards this government not really caring about public transport. It's a complete political decision to raise capital spending significantly in nearly all depts but give transport a cut. They definitely could have found some more money for transport given the fiscal rule changes (which tbh I thought would result in a very significant transport uplift!)
I suspect this government is going to be very similar to Tony Blair's labour on transport in his first couple of terms. Say a lot of stuff but not really fund/do that much. I think labour at their heart think of national infrastructure being really more about the NHS and education, not physical infrastructure of road and railways.
The bigger problem is road projects. We've already had A303 cut and now A1 dualling in Northumberland has also been cut today (they had completed all land acquisition for this!)

I suspect that the tactic for rail is for GBR to improve TOC/NR efficiency of operation to generate internal money for expansion.
HS2 is in such a state that it is impossible to fix its budget until the various reviews are done, and I think we are lucky that the Euston tunnels were approved, at least indicating that there will be a Euston station solution.
There's probably a lot more to come on TRU/NPR and EWR, once the planning solidifies.
There will be more to say on infrastructure when the spending review completes for the spring statement.

I think we can expect more activity from DfT now its budget has been set.
I didn't detect any change to the present "revenue to the Treasury, costs to the DfT" formula.

 

[sh24]

Presumably this 10 year infrastructure strategy planned next Spring, alongside the Spending Review, will shed more light on what rail projects get pursued (new and existing). I don't recall many specific projects, whether rail or anything else, getting a special mention today.

This is where the real detail will come. Expect a few leaks post Xmas of what's in and out.

 

[DarloRich]

There is little point talking about a subject like this here. Most posters are at best one eyed while some are totally blind where rail is concerned. The real world is a different place!

At least all the specifically mentioned transport projects to be binned are all roads

Yet roads still need improvement. I know you and many here wont agree but things like dualling the A66 and A1 north of Newcastle need to be agreed and delivered.

By increasing congestion on the roads? Umm..

Really? I don't think it will make any difference. People will still buy cars, businesses will still buy vans, goods still need to move by lorry. MOST people in this country don't use the train. That wont change even with a fuel duty increase - people have to get to work and for MOST people that means driving and that means finding the cost of the fuel.

I agree we can do more to not drive locally ( ffs just walk to the shop!) but for most working people that isn't an option. It isn't an option to walk 30 miles or get a bus or train where none exist.

We live in the real world not the star trek world. As the population grows car ownership is going to go up.

(PS I don't own a car so have no "skin in the game" - I just try to loo kat things honestly and realistically)

Presumably this 10 year infrastructure strategy planned next Spring, alongside the Spending Review, will shed more light on what rail projects get pursued (new and existing).

Correct

Fuel duty has been frozen for years for no apparent reason other than increasing it is unpopular with motorists. I'm a motorist and would be perfectly happy to accept an increase in fuel duty if the money generated was spent wisely.

Agreed - I think it should have gone up if only to spread the pain BUT if you have a stated aim of not increasing the taxes of working people this is an easy way of showing that.

Railcards going up by £5. Which in my opinion should remain where they are…

Why? I bet it has no impact on numbers. sold. You still save a fortune.

I wonder what the Health department think of the continuing feather-bedding of motorists

I suspect they are more worried about how to keep the NHS going!

The passengers are back - people need to travel for all sorts of reasons and Government should be facilitating that.

but they are not, at least not in the same numbers and certainly not with the same revenue - I can get a seat on a train to London every day. Pre COVID I was sitting in a luggage rack or squashed in the vestibule. That is where the money was and that money hasn't been replaced by off peak leisure fares.

We have to be honest about that.

At least the there seems to be a commitment to continuing the service, even though there isn't all we'd like to see. This is no 1964.

I have no idea what you are on about here.

I thought they'd cut most of HS2.

The hole is too deep and we are too far inside it! - even if I wanted it cancelled, which I don't.

 

[yorksrob]

but they are not, at least not in the same numbers and certainly not with the same revenue - I can get a seat on a train to London every day. Pre COVID I was sitting in a luggage rack or squashed in the vestibule. That is where the money was and that money hasn't been replaced by off peak leisure fares.

We have to be honest about that.

The reality is that the passenger recovery has been coming on in leaps and bounds since covid. Both numbers and revenue are far nearer to 2019 than 2020. They should be looking at ways to boost revenue by encouraging growth.

I have no idea what you are on about here.

That was the election where Labour were voted in with a manifesto pledge of reversing the route closure programme, then failed to do so for several years.

The hole is too deep and we are too far inside it! - even if I wanted it cancelled, which I don't.

Nevertheless, it was substantially cut back by the time of the election.

 

[DarloRich]

The reality is that the passenger recovery has been coming on in leaps and bounds since covid. Both numbers and revenue are far nearer to 2019 than 2020. They should be looking at ways to boost revenue by encouraging growth.

but it isn't, not in the areas that really pay. Revenue overall is still down.

I agree that leisure travel is vastly up but that doesn't pay the same as commuting season tickets. The problem with that leisure growth is many services on, say, a Sunday, are above capacity. We cant take more of this growth until new trains and facilities are brought in. That isn't going to happen any time soon. Sadly.

( we can all say it should happen but it wont. )

 

[Krokodil]

but they are not, at least not in the same numbers and certainly not with the same revenue - I can get a seat on a train to London every day. Pre COVID I was sitting in a luggage rack or squashed in the vestibule. That is where the money was and that money hasn't been replaced by off peak leisure fares.

We have to be honest about that.

The previous government did its utmost to throttle recovery by stirring up disputes with the staff. Now that the adults are in the room the railways have a chance of rebuilding patronage.

 

[DarloRich]

The previous government did its utmost to throttle recovery by stirring up disputes with the staff. Now that the adults are in the room the railways have a chance of rebuilding patronage.

hopefully. But I don't think the commuters are coming back in the same numbers. However that is for a different thread.

 

[Nottingham59]

The reality is that the passenger recovery has been coming on in leaps and bounds since covid.

The recovery from Covid is over.



(image shows ORR data with passengers journeys flat at around 410m per quarter)

 

[12LDA28C]

The recovery from Covid is over.

View attachment 168265

(image shows ORR data with passengers journeys flat at around 410m per quarter)

That's a strange interpretation of that graph. The trend is still upwards and you can certainly not claim that 'the recovery from Covid is over', particularly when the figures shown have been impacted by national industrial action which has now been resolved. No doubt you can see that the figures from 2018 to 2020 fluctuated too, but the trend was still increasing.

 

[SamYeager]

That's a strange interpretation of that graph. The trend is still upwards and you can certainly not claim that 'the recovery from Covid is over', particularly when the figures shown have been impacted by national industrial action which has now been resolved. No doubt you can see that the figures from 2018 to 2020 fluctuated too, but the trend was still increasing.

IMHO that trend looks more like it's flattening out. The most positive thing that I could say about it is that the trend is showing a very low rate of growth. Even if there's some growth to come on the passenger side it's unlikely that there's much growth left to come from the revenue side which is rather more important given the comment from the chancellor about the need for a sustainable railway.

 

[Deepgreen]

Oh yes far more appropriate description

I sense the phrase 'oven-ready' lurking - please, no!

I'm a motorist, I paid tax when I brought the car, I pay tax to use the roads, I pay tax on the fuel I put in it to get to work, where I pay tax on the money I earn...

You say you'd be happy to accept an increase, but where do we draw the line?

We don't - virtually everything is taxed one way or another.

 

[Adrian1980uk]

The recovery from Covid is over.

View attachment 168265

(image shows ORR data with passengers journeys flat at around 410m per quarter)

I think you have to compare like for like quarters as you get variances by quarter - school holidays and Christmas etc. I think you'll find it's up again this year and revenue is up too - not enough but we're not miles away from Pre COVID now

 

[LNW-GW Joint]

The recovery from Covid is over.
(image shows ORR data with passengers journeys flat at around 410m per quarter)

No it isn't.
Passenger journeys may be similar to 2019, but revenue won't be, given the loss of peak commuter and business traffic (with more off-peak and leisure travel).
There's also the damage of the 5 years of lost growth (where the figures would have been without Covid), which was built into the TOC plans.
Doing better, yes, but we are still behind where we need to be.

 

[thejuggler]

More heritage focussed, but the Levelling Up Funding for upgrading signalling and constructing a new DMU shed at KWVR was confirmed in the budget small print.

 

[Nottingham59]

That's a strange interpretation of that graph. The trend is still upwards and you can certainly not claim that 'the recovery from Covid is over', particularly when the figures shown have been impacted by national industrial action which has now been resolved. No doubt you can see that the figures from 2018 to 2020 fluctuated too, but the trend was still increasing.

I would say it's back to the trend rate of growth that prevailed in the first seven quarters of that graph. Projecting the straight line, I'd guess going from 400 to 500 over a period of around ten years. So aroung 2% annual growth.

but revenue won't be, given the loss of peak commuter and business traffic (with more off-peak and leisure travel).

Sure. But there is no sign of any more recovery in revenue. Which is what I meant when I said the recovery is over. The industry needs to adjust to a new permanent state of affairs with more off peak and leisure travel.

 

[LNW-GW Joint]

Sure. But there is no sign of any more recovery in revenue. Which is what I meant when I said the recovery is over. The industry needs to adjust to a new permanent state of affairs with more off peak and leisure travel.

I see what you mean!

 

[David Bullock]

I would say it's back to the trend rate of growth that prevailed in the first seven quarters of that graph. Projecting the straight line, I'd guess going from 400 to 500 over a period of around ten years. So aroung 2% annual growth.


Sure. But there is no sign of any more recovery in revenue. Which is what I meant when I said the recovery is over. The industry needs to adjust to a new permanent state of affairs with more off peak and leisure travel.

I don’t think a reduction in revenue changes the case for investment, I think it changes some things from an operational perspective (engineering works should take place midweek and not over Christmas/easter) but we should still be investing in railways as the best way to decarbonise transport

 

[3RDGEN]

The ORR reports cover revenue in section 3 and for Q1 it stated;

"Passenger revenue by sector.

In the latest quarter (1 April to 30 June 2024), total passenger revenue in Great Britain was £2.8 billion. Adjusted for inflation, this is 8% more than the £2.6 billion generated in the same quarter in the previous year. However, this is still below pre-pandemic levels, at 84% relative to the £3.4 billion in the same quarter five years ago (April to June 2019)."

The figures are adjusted for CPI inflation so in Q1 revenue was 16% or £600 million down on Q1 2019. Fare revenue and taxpayer subsides pay the bills, not footfall.

 

[The exile]

We haven’t yet had a reported quarter in which there has been little chance of no services running as a result of industrial action at 2 weeks’ notice. The railway’s revenue from me has gone back up as I’m now purchasing monthly seasons for the first time since the strikes started. Revenue from me per journey is therefore down, but absolute revenue up.

 

[DarloRich]

The industry needs to adjust to a new permanent state of affairs with more off peak and leisure travel.

Correct - the problem is surely one of capacity. Sunday is now a very busy travel day. Fare structures may have to change to reflect this.

 

[AndrewE]

Passenger journeys may be similar to 2019, but revenue won't be, given the loss of peak commuter and business traffic (with more off-peak and leisure travel).

except that peak travel is what makes losses worse... Which is better, a) 8-car trains running reasonably well-filled all day, or b) 4-cars most of the day with 12s in the am and pm peaks? Answer is a) so loss of peak is a good thing
Just like well-filled Pendolinos running Euston to Glasgow and back all day every day will have made a far better return than any commuter stock, especially when it stands idle outside the peaks.
Admittedly (luckily) I don't believe peaks are as extreme as they used to be and even local rail useage is better balanced too.

 

[12LDA28C]

I don’t think a reduction in revenue changes the case for investment, I think it changes some things from an operational perspective (engineering works should take place midweek and not over Christmas/easter) but we should still be investing in railways as the best way to decarbonise transport

Engineering works shouldn't take place at Christmas when for the vast majority of the network, no passenger trains run at all for two days, and many people take a whole week off work? Not sure I agree with that.

 

[yorksrob]

but it isn't, not in the areas that really pay. Revenue overall is still down.

I agree that leisure travel is vastly up but that doesn't pay the same as commuting season tickets. The problem with that leisure growth is many services on, say, a Sunday, are above capacity. We cant take more of this growth until new trains and facilities are brought in. That isn't going to happen any time soon. Sadly.

( we can all say it should happen but it wont. )

The old funding model was outmoded and unsuited to modern society. The reality is that business travellers and commuters are a lot less captive than they used to be, and government will just have to build the industry atound the more savvy, price conscious passengers it has a chance of finding.

 

[Bishopstone]

I’m going to give the new lot 12 months to see what ‘reform’ looks like: what they intend to do with the (notional) savings from nationalisation; how GBR will be structured; how they transition away from high cost methods of service delivery to something more efficient - and whether I can use the train on Sundays without encountering mass cancellations and ‘don’t travel!’ warnings.

As a nation, we don’t like change very much. As new ideas start to be run up the mast, I expect significant hankering for the status quo. We’ll have to see how strong the Government (with mega majority) is in cutting through the noise.

 

[GRALISTAIR]

Correct - the problem is surely one of capacity. Sunday is now a very busy travel day. Fare structures may have to change to reflect this.

Absolutely agree.

 

[yorksrob]

The recovery from Covid is over.

View attachment 168265

(image shows ORR data with passengers journeys flat at around 410m per quarter)

IMHO that trend looks more like it's flattening out. The most positive thing that I could say about it is that the trend is showing a very low rate of growth. Even if there's some growth to come on the passenger side it's unlikely that there's much growth left to come from the revenue side which is rather more important given the comment from the chancellor about the need for a sustainable railway.

The post recovery phase may be over, however there's still the possibility to get bums on seats and more fares in. This should be where the Government concentrates.

Correct - the problem is surely one of capacity. Sunday is now a very busy travel day. Fare structures may have to change to reflect this.

Surely this is a reflection of the much reduced train services on offer.

If the industry ran the same amount of train as on a weekday, there would be no capacity issue.

As a nation, we don’t like change very much. As new ideas start to be run up the mast, I expect significant hankering for the status quo. We’ll have to see how strong the Government (with mega majority) is in cutting through the noise.

If the new ideas all result in passengers paying more, they won't be popular.

 

[Bletchleyite]

If the industry ran the same amount of train as on a weekday, there would be no capacity issue.

It very often does. The WCML intercity base timetable is the same all week except at the extremities of the day.

Sunday afternoon will always be busy - everyone wants to come home from leisure journeys then. Even British Rail charged weekend trippers a bit more to reflect that - the SuperSaver wasn't valid Fridays - but if you use single fare pricing you need to in some way restrict both peaks, not just one of them.

 

[pokemonsuper9]

Railcards going up by £5. Which in my opinion should remain where they are…

I wonder how much 3 year Railcards will go up by, either
way little difference to me, I'll keep buying them, I've already saved upwards of £75 in my first year of my 3 year 16-25.

 

[The exile]

Sunday afternoon will always be busy - everyone wants to come home from leisure journeys then. Even British Rail charged weekend trippers a bit more to reflect that - the SuperSaver wasn't valid Fridays - but if you use single fare pricing you need to in some way restrict both peaks, not just one of them.

Surely the reason for not having Blue/Sooersaver validity on Fridays was that Friday couldn’t cope with the usual commuters plus the weekend exodus?

 

[Bletchleyite]

Surely the reason for not having Blue/Sooersaver validity on Fridays was that Friday couldn’t cope with the usual commuters plus the weekend exodus?

That will have been part of it, yes. My point was less about specific times, but more that BR *did* price leisure travel around a bit.