Big rise in passenger numbers – could digital technology be the cause?

IT is a popular claim by HS2’s ardent critics – most notably, of late, by former Cabinet Minister Cheryl Gillan, who is MP for Chesham and Amersham, writing in The Daily Telegraph – that the plan for HS2 is 30 years too late, and its need has been overtaken by rapid developments in communications technologies.

But rail operating expert William Barter and Chris Howe of the HS2-NorthWest campaign group have now suggested that the real situation is quite the opposite – that actually the rapid developments in digital communications are leading to ever-increasing rail passenger journeys.

In her Telegraph article on 1 July Ms Gillan concluded: “The Government has been keen to stress that we haven’t built a railway line since the Victorian era and that the railways were fiercely opposed even in those days. However, we cannot seek Victorian solutions to modern-day problems.

“HS2 is already technologically out of date,” she claimed. “By the time it is completed in 2033, it may be looking very akin to the ancient typewriter I used when I first entered Parliament.”

But William Barter – a Fellow of the Institution of Railway Operators who tutors degree-level IRO students in Operational Planning, Economics and Operations Management – has since observed: “Cheryl Gillan waxes lyrical about little electronic devices that have blossomed in the last 10 years and that these reduce the need to travel.

“There is just one problem with this argument – in those same 10 years, rail travel hasn’t conveniently bent to her will and reduced; it’s grown, and at an almost unprecedented rate.”

Mr Barter adds: “The simple truth that Cheryl Gillan just glosses over is that rail travel has not reduced since her electronic gizmos became common. On the basis of the facts, you could more logically argue that electronic communications drive up rail demand.”

And analysis of technology developments by HS2 NorthWest’s Chris Howe clearly shows that after 1996 – the year that the first mobile phones with Internet technology were launched – passenger numbers began rising at a faster rate than the UK’s gross domestic product (GDP).

Until then, it was generally reckoned that the number of rail passenger journeys correlated closely with changes in GDP – and prior to 1996 there had been a fall in numbers, initially in line with the recession in the early 1990s and partly because there was then little marketing or promotion of rail services between 1993 and 1996 while the complex process of privatising British Rail was taking place.

But after 1996 the increase in passenger numbers began running ahead of GDP.

Some people claim that this was a result of rail privatisation, but as Sim Harris notes in his ‘Beyond Beeching’ feature article in July’s print edition of Railnews: “It is difficult to see how privatisation could have made much difference to demand until at least the early 2000s, because it was only then that the changes introduced by the TOCs started to become obvious, as new trains came into service and the then novel technique of ‘yield management’ started to make deeply-discounted intercity fares possible.”

Most telling is to observe what happened to passenger numbers after 2007/08, which, according to Chris Howe, was when a ‘landmark cross-over’ occurred – when mobile phones took over from personal computers as the major form of Internet communication.

Even more notable is that 2008 marked the start of the financial crisis as Britain went into recession and GDP nose-dived.

But instead of following GDP down as would have been expected previously, the number of passenger journeys just went on rising – and continued to do so, apart from a slight blip in 2010.

As a result, in 2012 there were over 1.5 billion journeys, the highest on record for 90 years. On the other hand, GDP has improved little from its 2008 level, leading to the current continuing ‘era of austerity.’ While passenger numbers have been rising at or above three per cent a year, there was some jubilation last week that the latest survey by the British Chambers of Commerce suggests GDP may grow by just 0.6 per cent in 2013 – after basically flat-lining for the past two years!

What seems to have been happening is that communications technology has advanced sufficiently to enable people to leave their cars, in which they could not use hand-held devices or laptop computers, and travel instead by train where they can undertake work (as much as network and wi-fi availability allows) during their journeys.

So instead of the old formula of calculating rail (and road) investments on the value of unproductive work time saved, the true calculation should be the value of total productive time achieved while people travel on trains compared with the unproductive time when in their cars.

William Barter observes: “So long as the Department for Transport standard methodology has to cover road as well as rail, HS2 Ltd has had no choice but to follow it in the formal business case.

“But what HS2 did, long ago – because it was logical – was to test an alternative assumption, to reflect the effect of productivity during the journey by halving values of time for business travellers.

“And the business case improved! Because once you assume that travel time by train can be productive, then the benefits of that productivity must be allowed for travellers shifting from car – unless you have a chauffeur – or released from crowded conditions in which work would have been impossible, as will happen once the fast trains shift to HS2 and allow the WCML to focus on its commuters.”

Writing in The Financial Times on 4 July the chairman of HS2 Ltd, Douglas Oakervee, explained: “The reason we need HS2 … is straightforward. Not speed. Not vanity. But capacity. The demand for travel in Britain and around the world is soaring. Rail traffic has doubled in recent years and our roads are filling up.”

He added: “By mid-October we will publish further detailed work that will include fresh analysis of the wider economic benefits to the regions of the UK, as well as a fully revised economic case that will address the latest research on the value of travel time and will include sensitivity analysis on the demand for HS2.”

William Barter says: “Seventy per cent of HS2’s direct users are expected to be personal travellers, not fat cats on a rich man’s toy.”  As a result he says HS2 will be: “The 21st century railway for people and the perfect complement to the electronic world.”

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