What the General Election means for transport - A Cicero Group overview - December 2019

What the General Election means for transport Cicero Group | December 2019

Transport policy is a significant dividing line between Labour and the Conservatives. Labour’s long-term commitment to the nationalisation of rail franchises and to allow publicly owned companies to run bus services are central to their platform to deliver a major transformation of the UK’s economy towards more public ownership.

The investment programme will be funded by Chancellor Sajid Javid’s new approach to fiscal rules, allowing more borrowing for capital investment aimed at boosting productivity growth. This focus on regional investment is supported by the new interest from Conservatives in regional policy and the work of economists such as Professor Paul Collier and Professor Richard Jones.

Despite this major ideological division on the question of public ownership, what is striking is the crossparty consensus on other major themes. For example, investment in the North and Midlands, the environment and a focus on the importance of bus services.

The Conservative manifesto makes the case that European second tier cities are often more productive than those in the UK, because they have better infrastructure. This echoes some of the arguments made by groups such as Core Cities about the need to level up transport investment between London and the rest of the country.

The Conservatives, with Leave voters in the North and Midlands in their sights, have promised an infrastructure revolution focused on delivering rail projects in these regions as part of the Prime Minister’s plans to ‘levelup’ all areas of the UK. They have also promised to give communities far more control over how investment is made and to get away from the idea that ‘Whitehall knows best’.

The Prime Minister has talked about his vision for the UK, as a bigger version of what happened in London under his Mayoralty. Unlocking growth in neglected areas through a combination of infrastructure investment, support for education, and funding for technology is at the heart of this agenda. ciceroelections.com

Labour makes a similar argument, talking about new investment in left behind areas and giving powers and funding to every nation and region as part of a programme of radical decentralisation.

Only the Liberal Democrats, who have focused on winning over Remain supporting areas of London and the Home Counties, mention delivering more investment for transport in the capital through the delivery of Crossrail 2.

The Brexit Party’s offer to Leave voters centres on new rail and road investment in ‘development-starved’ regions.

Cicero Group | 1

What the General Election means for transport

The environment is a major theme across the manifestos of the three main UK parties and the SNP. Labour talk about an aim of bringing forward the current Government target of making the UK net carbon neutral by 2050 to 2030, but only commit to delivering on legally binding targets by 2040 and 2050. The Liberal Democrats offer a target of 2045.

Nationalisation

One area where the Conservative manifesto stands out is a mention of the needs of drivers. This perhaps reflects the fact that their target voters are mostly older people living in towns with limited access to public transport.

The Labour manifesto sets out what they see as the advantages of rail nationalisation, such as service integration and better co-ordination of infrastructure upgrades including a continuity of skills, jobs and supply chain capacity.

The major dividing line on transport policy is Labour’s commitment to nationalising train operating companies.

There is no formal commitment to a mechanism for delivering this but waiting for franchise expiry is mentioned as an option likely to be considered.

It is likely that if returned to office, the Conservatives will implement the bulk of the Williams Review. While the review hasn’t been published yet, we know that it will recommend the ending of the current franchising system and a new structure for the railway which will bring the management of the track infrastructure and train services closer together and propose a long term vision and coordination in delivering investment.

There is a question if in practice this significant ideological divide on nationalisation will make a huge difference to the experience of passengers.

Rail Policy

Under Labour’s plans it is likely that the private sector would retain a role in managing and running services, in much the same way as the private sector delivers services for Transport for London’s overground rail services.

Labour and the Conservatives commit to a new period of significant investment in rail delivering major new investment in the Midlands Rail Hub and Northern Powerhouse Rail.

The Labour manifesto is silent about the future of open access services, which are becoming a more important part of our rail services offering customers more choice and lower fares.

Labour chose to refer to ‘Crossrail for the North’, avoiding references to the George Osborne inspired concept of the Northern Powerhouse, but their commitment to the scheme is similar to the Conservatives.

The vision set out in their manifesto of nationalisation providing one railway company delivering services across the UK would see an end to open access operators.

Both Labour and the Conservatives are committed to re-opening some of the lines which disappeared in the Beeching cuts of the 1960s.

While the Conservatives promise action to protect passengers who have suffered due to recent rail strikes by requiring the delivery of minimum levels of service, Labour has more of a focus on the interests of transport workers as we have seen in their support for the recent South West Trains strike. Their manifesto promises action on trade union priorities such as staffing levels and protecting the status of train guards by ending driver-only operation. ciceroelections.com

If the UK did end up staying in the EU, while EU law would not be a barrier to the public sector taking control of franchised services, the Fourth Railway Package would mean that private operators could retain the right to run open access services.

The Liberal Democrats manifesto opposes nationalisation because it would be ‘enormously disruptive’ and ‘ruinously costly’.

The party does, however, promise to allow public sector or not for profit operators to compete to run franchises.

The Liberal Democrats support investment in rail services in the North and the Midlands, but are the only Cicero Group | 2

What the General Election means for transport

party to address the need for infrastructure investment in the capital through the Crossrail 2 project.

The SNP is focused on delivering full Scottish Government control over rail services, so opposes Labour’s vision of a UK-wide new public rail monopoly. Their manifesto calls for better and faster rail services between London and Scotland and between Scotland and the North of England.

Labour policy also contrasts with the Conservatives with their promise to cut regulated rail fares by a third.

Critics have suggested this is a policy which would disproportionately help the richest 20 percent, who take many more train trips, with those who would benefit the most being commuters in London and the South East.

Labour and the Liberal Democrats have a specific promise to harness the environmental benefits of rail freight in reducing lorry mileage.

HS2 The election of Boris Johnson as the leader of the Conservative Party has raised questions about the future of HS2, given that Johnson seemed to tack towards the opposition to HS2, a position held by a majority of Conservative Party members, during the leadership election.

The Oakervee review, which the Prime Minister commissioned, won’t be published until after the election. The Conservative manifesto commits to simply considering the outcome of the review and working with local government leaders in the North and Midlands to decide the optimal outcome.

The fact that leaks of the Oakervee report suggest that it supports pressing ahead with the scheme and local Government leaders in both the North and the Midlands tend to be enthusiastic supporters of the project, suggest that the scheme is likely to eventually get the go ahead.

Labour are fully committed to the whole scheme and its extension into Scotland. The Liberal Democrats also back the full scheme.

While the SNP don’t mention HS2 in their manifesto given that the delivery of the full scheme would help in the delivery of their wish to see improved rail services between Scotland and London they are likely to maintain their support and to continue pushing for its extension into Scotland. The DUP and the Brexit Party both call for HS2 to be scrapped.

Local Transport One of the positive aspects of the current battle between Conservatives and Labour to win over voters in marginal seats in the North and the Midlands is the political attention that bus services have received. Bus services are too often neglected by a political and media class dominated by rail commuters into London.

Bus journeys dwarf rail journeys – there are 10 times more of them every year, but these numbers are in decline.

Boris Johnson’s first major speech as Prime Minister was in Manchester and he spoke about bus services and new powers granted by the Government to allow Manchester and other mayoral authorities to take control of bus services.

The Conservatives started shifting away from their previous defence of bus deregulation under David Cameron and legislation introduced to allow local authorities to take control of bus services was introduced under Theresa May. With Johnson, an advocate of buses from his time a Mayor of London, as Prime Minister, and Sajid Javid, the son of a former bus driver, as Chancellor, we have already seen promises of significant new investment in bus services.

The Conservative manifesto goes further, promising lower fares and increased frequency. It also makes the claim that cities across the country can have services as good as London’s.

Giving other cities the same powers as London enjoys over buses might help to improve services, but London

ciceroelections.com

Cicero Group | 3

What the General Election means for transport

also enjoys generous subsidies and a density of population which supports frequent bus services.

target voters who are mostly dependent on cars for their travel needs.

Labour make similar promises to invest in bus services, but also calls for the reversal of bus privatisation through the establishment of local government owned bus companies. They also repeat their 2017 promise for free bus travel for the under 25s in areas where councils have taken control of services.

They focus on fixing potholes in local roads through a £2 billion scheme and the delivery of existing commitments to investment over £28 billion in strategic roads through the second phase of the Government’s Roads Investment Strategy.

The Liberal Democrats also back plans to invest in new bus services and to allow councils to establish locally run bus services. The SNP, who have moved on from previous opposition to bus regulation and have introduced franchising powers in Scotland, focus on investing £500 million in improved bus priority infrastructure.

Light rail and trams Conservatives have also promised investment in new metro, tram and light rail schemes. The manifesto makes the point that Leeds is the biggest urban area in Europe without a mass transit system.

The announcement of £4.2 billion for a Local Public Transport Fund, is aimed at supporting the delivery of the previously stalled Leeds scheme and other schemes in cities across the country.

The Liberal Democrats talk about investment in tram services, but Labour don’t make any specific commitment to tram or light rail schemes.

Labour has significantly less focus on roads, with a limited commitment to increasing funding for improvements to local roads and pavements.

While the party hasn’t been explicit about which schemes it would drop, its plans to use Vehicle Excise Duty to fund cuts to rail fares would significantly reduce funding available for road investment.

Automotive There is cross-party agreement on the need for investment to help the UK to transition from petrol and diesel fuelled vehicles to electric.

The Conservatives promise to invest £1 billion in completing a fast-charging network and to consult on the earliest date to phase out petrol and diesel cars, while minimising the impact on drivers and businesses.

There is also a strong commitment to increasing the use of electric buses, including an electric bus only town.

Labour promise to bring forward the existing Government commitment to stop the sale of new conventionally fuelled cars from 2040 to 2030 and to invest in three new gigafactories to manufacture batteries and to support the development of a UK supply chain for electric vehicles, with a specific commitment to the steel industry. The Labour Party also makes a commitment to the adoption of electric vehicles by the public sector.

The Liberal Democrats also promise to end the sale of fossil fuel powered vehicles by 2030. They also make commitments to cut VAT on electric vehicles to five percent. They also have additional commitments to pass a Clean Air Act which would be enforced by a new Clean Air Quality Agency.

Roads and Automotive

Commitments to lowering rates of tax on ultra-low emission vehicles and loans to help purchases are made by the SNP, but reflecting the challenge of delivering a charging network across rural Scotland, their manifesto doesn’t include any specific commitments to introducing electric vehicles.

The Conservative Party manifesto is the most focused on talking about road improvements, mindful of their ciceroelections.com

Cicero Group | 4

What the General Election means for transport

Cycling Given Johnson’s focus on cycling as Mayor of London and the appointment of Andrew Gilligan, his former ‘Cycling Tsar’, as a transport adviser in Downing Street, it is unsurprising that his manifesto has a focus on cycling.

It promises a new £350 million Cycling Infrastructure Fund with mandatory design standards for new routes and the extension of cycling proficiency training to every child.

Labour make similar commitments to support cycling.

They promise changes to land use planning to increase walking and cycling.

The Liberal Democrats also promise a new strategy to promote walking and cycling and make a specific commitment to ensure that support for cycling reaches 10 percent of the total transport budget.

To support cycling, the SNP suggests reducing VAT on bicycles.

noise obligations and that the business case is realistic.

The Conservative manifesto makes commitments to reducing emissions from aviation through new air traffic control technology and the UK’s pioneering work in electric and low carbon flight.

Labour’s position is very similar. It refers to the Davies commission set up under the last Labour Government which supported Heathrow expansion, but states that any expansion of airports must pass tests on air quality, noise pollution and emissions.

The Liberal Democrats take the most anti-aviation position. They promise to oppose expansion of Heathrow, reflecting that many of their target seats are in West London and affected by Heathrow noise.

They also oppose expansion at Gatwick or Stansted and a moratorium on any new runways across the UK. The party proposed changes to aviation taxation to increase costs to those who fly the most, while reducing cost for those who take one of two international flights a year.

It is the DUP which is the only party which is enthusiastic about the development of a third runway at Heathrow because of the potential it offers to expand services to Belfast.

The SNP used to be supporters of Heathrow expansion, because of the opportunities this will provide for new services to Scotland. Their increased focus on the environment means that they have moved away from support for the project and abstained on the Commons vote.

Aviation References to aviation are limited in all the major parties’ manifestos.

Aviation policy is a challenge for the Prime Minister, given that he was previously a strong opponent of Heathrow expansion. There is, however, strong crossparty support for the development of a third runway and a recent Parliamentary vote to support it.

The Conservative manifesto acknowledges the decision

by Parliament to support a third runway at Heathrow, but seeks to distance the Government from it by stating that it is a private sector project and it is for Heathrow to demonstrate that the project can meet air quality and ciceroelections.com

Their manifesto highlights the importance of aviation to the Highlands and Islands, but makes a commitment to making the area the first net zero aviation region by 2040 and introducing trials of zero carbon aviation, including electric planes by 2021.

Control over tax on air travel is devolved to Scotland.

The SNP had previously supported a plan to reduce tax to make Scottish airports more competitive, but subsequently dropped it because of the impact on climate change.

Despite the Liberal Democrats’ overall support to increase taxes on flying, they promise the devolution of Air Passenger Duty to Wales on the same basis as Scotland and Northern Ireland. This has been a long term ask of the Welsh Government to help support growth at Cardiff airport.

Cicero Group | 5

What the General Election means for transport

Ports and Shipping The main manifestos are mostly silent about the UK’s maritime sector.

Labour includes a union-pleasing promise to end nationality-based discrimination in seafarer pay. This has been a long-term objective of the RMT Union.

In Labour’s regional manifestos there are commitments to delivering expansion at major ports across England.

The regional manifestos also make commitments to support the UK’s ship building and maritime industries, including supporting new investment in fabrication facilities. An upgrade of Cammell Laird’s yard in Merseyside, for example.

All the main parties are also promising significant investment in new rail services in the North and Midlands and a welcome focus on too often neglected bus services.

While this could lead to a new golden age in investment in infrastructure and public transport services, there will be significant hurdles to delivery. As we have seen with schemes such as HS2 and Crossrail, political will and public support needs to be maintained throughout the project lifespans. Problems such as increasing budgets and local opposition offer significant barriers to delivery.

The Cicero team has significant experience in supporting transport projects to win and maintain support at both the national and local level.

The Conservative manifesto promises the development of up to 10 Freeports across the UK. Freeports were one of Boris Johnson’s pledges when he ran for the leadership of the Conservative Party.

We would be keen to discuss how we could provide support to your organisation.

Port businesses such as Associated British Ports and the Bristol Port Company have campaigned for the Freeports as a way to boost economically deprived areas after Brexit.

Get in touch...

The idea was also supported by Ben Houchen, the Conservative Mayor of the Tees Valley.

If you would like to speak to us about this document or how we can support your organisation, please do contact a member of the Cicero team below: Andrew Smith Director Andrew.Smith@cicero-group.com +44 (0)20 3397 0106

Sara Price Account Director Sara.Price@cicero-group.com +44 (0)20 7343 1601

Conclusion There is a huge ideological divide between Labour and the Conservatives on the question of rail nationalisation, but there are significant similarities in the broad offer.

The current system of rail franchising is likely to come to an end whoever wins the election - through the implementation of the Williams Review under the Conservatives and Nationalisation under Labour. ciceroelections.com

Cicero Group | 6