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Article: Is It Time For Nationalisation to Keep the UK’s Railways on Track?

This article investigates the fractures within the UK's railway system. It finds that UK railways have been unpunctual, inefficient and expensive for over a decade now, and recent attempts of reform are of little help. 

Published: 8/11/22

Link to article: https://ibexpub.media/is-it-time-for-nationalisation-to-keep-the-uks-railways-on-track/

Avanti West Coast is the latest UK rail company on the brink of collapse. Severe staff shortages following the rapid increase in passenger numbers since the pandemic has led to what the government describes as “major operational issues”, seen by the forced closure of three of the company’s train routes. Avanti West Coast’s increasingly disorientated workforce has begun to work overtime shifts to keep the trains on schedule, and strikes have been called for 5th November and 9th November by the TSSA union. The leader of the RMT union Mick Lynch described Avanti as “one of the worst operators we have ever tried to negotiate with”, while former Transport Minister of 49 days, Anne-Marie Trevelyan, admitted the service was “unacceptable” and that the UK needs trains that “are reliable and resilient to modern day life”. And yet, amid this abject failure, the UK government has chosen to extend the licence of Avanti West Coast until April 2023, a costly measure that saw £17 million in government contracts handed to the company in the previous two years. High expense for incompetence encapsulates the running of Britain’s crumbling rail network, described by the Boston Consulting Group as in the “second tier of European nations” in 2017.

The introduction of the private franchise system by the John Major government in 1993 was promised by Transport Secretary John MacGregor to deliver “more competition, greater efficiency and a wider choice of services more closely tailored to what customers want.” It was the logical progression of Margaret Thatcher’s neo-liberal economic policy which had dominated the 1980’s and was touted to re-energise clunky state-owned services with the dynamism, efficiency, and rigour of the private sector. However, 25 years since the full privatisation of the railways in 1997 and things are worse than before.

Firstly, the trains have become more expensive for the customer, as ticket prices have risen by 48% in real terms since 1997. This can be partially explained by factors outside of privatisation, demand having almost doubled in the run-up to the pandemic; 950 million annual passengers in 1999 compared to almost 1.7 billion passengers in 2019. But promised efficiency savings associated with privatisation have not materialised, and taxpayers continue to dish out £2.6 billion in 2015 and £5.1 billion in 2019 in government contracts towards rail franchises. Crucially though, the neo-liberal concept of competition does not even operate in the UK’s rail market, as companies are routinely handed private contracts via a ‘direct award’ rather than through a competitive auction. Furthermore, once the franchise obtains a contract, they bear no financial risk, meaning taxpayers must pick up the bill if a company fails. This happened in 2018 when the East Coast Line had to be bailed-out and again in March 2020 when the Northern franchise did too. Just to top off the damage to the public purse, the state paid £12 billion during the pandemic to save the railways from collapse.

Secondly, promises of greater efficiency since privatization have not transpired. Daily UK train schedules are rife with delays. Indeed, in 2018 the UK ranked 20th in the EU-27 plus Norway for punctuality. The range of companies available also serve to complicate the system of train times, ticketing, and prices, with a melee of different systems for different journies that is far off the promise of a “wider choice of services more closely tailored to what customers want”. The Department of Transport admits that franchise agreements typically cover 1,000 pages, meaning an incredible amount of detail to mull over for every franchise. Additionally, there are too many wasted resources with 400 full-time staff known as “train delay attributers” whose sole job is to assign blame for train delays via an expensive adjudication process, that refers to a 199-page document.

Reforms introduced by former Transport Secretary Grant Shapps, which are set to be implemented in 2023, may see the worst of these issues addressed. Described by the some pundits as a “halfway house between private and public”, the new ‘Great British Railways’ system centralises the diffused train system ran by a single public body, an upscaling of the Transport for London model that had been introduced in 2007 that stops trains and tracks being run under two separate systems. While the move is broadly welcomed, there are concerns the reforms do not target the root of the issue. Unions like Aslef are concerned the changes could see job cuts and fare rises, as the reforms do little to address the reduced levels of passenger numbers since the pandemic. Questions also arise over its promise to make efficiency savings of £1.5 billion in 5 years which is difficult to square with the six-month extension of a multi-million-pound government contract awarded to a failing operator like Avanti West Coast.

Japan has shown that a privatized railway system can work, and Europe is seeking to liberalize in an orderly fashion, however, the UK’s chaotic railway privatization suggests complete structural change is required. Scotland brought its railways under public ownership in April this year, perhaps it is time the rest of the UK did too.

Article: Study Exposes “Concerning Lack of Progress” In Global Transport Decarbonisation

This article raises awareness of the latest study by the World Benchmarking Alliance which exposes a "concerning lack of progress" in transport sustainability. The article received thanks from the Communications and Earned Media Lead, Blanca Civit Sarda. 

Published: 18/10/22

Link to article: https://ibexpub.media/study-exposes-concerning-lack-of-progress-in-global-transport-decarbonisation/

A ground-breaking study by the World Benchmarking Alliance released on 18th October 2022 has revealed urgent action is required for the world’s major transport companies to invest in, collaborate over and scale a low-carbon transition.[2] Despite being collectively responsible for 37% of global emissions, the study finds that progress on net-zero is “limited” in the global transport sector and likely to deeply impede on its ability to meet its 1.5 Celsius temperature target outlined in the Paris Agreement 2015. [3] Using a methodological measure called the Assessing low-Carbon Transition (ACT), on 90 major companies across rail, shipping, road and air transport sectors, the study produces five key findings: net-zero targets are insufficient, expertise and platform is not being mobilized, investment will not meet the emissions requirements in time, the transition needs to be accelerated in a just and equitable fashion for workforces and human rights need to be protected.

The first three of these findings indicate decarbonization features low on the transport company's list of priorities. Indeed, the study finds a staggeringly low 7% of the companies it assessed were committed to phasing out fossil fuels, with only six out of 90 working “directly” with infrastructure operators to build low-carbon solutions, both woefully small proportions given the scale of the challenge decarbonization presents. Only 51% of the companies had outlined net-zero targets, and even these lacked “detail, depth and intermediate targets”, making it difficult for organizations by the World Benchmarking Alliance to track “progress and contributions towards the Paris agreement goals”, and set “transformative benchmarks that will compare companies’ performance on Sustainable Development Goals”, or in other words, perform its task. [4][5] Are companies deliberately concealing targets to avoid fairing badly in climate comparisons, or are they just indifferent to climate policies?

The fact that 90% of transport energy comes from crude-oil products might persuade companies to resist the unchartered territory that net-zero alternatives represent. This impression is certainly implied by transport-related revenues, only 0.3% of which are reinvested into research and development of low-carbon technology, with 94% companies not providing any “meaningful data” on their sustainability investments. [6] The report argues that companies are relying on “other stakeholders for solutions”, failing to see the net-zero challenge as an investment opportunity and not mobilizing their wealth of industry expertise to convince key stakeholders to lead climate strategies.

The last two findings show companies are failing to prepare for the widespread disruption the decarbonization transition will inflict on workers. The report describes a “striking and systemic lack of action” by companies to mitigate the “social impacts of decarbonising”, and thus all scoring 0 on just-transition planning. [7] The report’s criteria for adequate planning includes social dialogue with stakeholders, thorough planning, measurable indicators, and a disclosure of company preparations, all of which the report found to be lacking. Measures for reskilling and upskilling of workers fared slightly better, with 38% of companies meeting commitments. [8] However, the fact remains, transport companies are significantly worse than the oil & gas, electric utilities, and automotive sectors for preparing for the transition to net-zero. 

However, despite damning evidence of its lackluster efforts, the report does highlight the highest performing transport companies across the transport benchmark. The top five companies in descending order were ComfortDel Corporation (Road and Rail), La Poste Groupe (Multimodal), FirstGroup (Road and Rail), NS Groep (Rail) and Maersk (Shipping), with the highest performing aviation company being Japan Air at 18th. [9] Perhaps, these companies will forge a path for others to follow and create a tipping point for huge progress on sustainability goals.

However, the World Benchmarking Alliance’s Decarbonization and Energy Transformation Lead, Vicky Sins, resists this view, arguing “there is an urgent need for collaboration”, with “every company getting actively involved across their business”. [10] CDP’s Global Director of Climate Change, Amir Sokolowski adds that benchmarking will be essential to the process and calls on companies to “go further” in setting “not only long-term, but near-term targets and credible climate transition plans”, so they can be “measured and managed”. [11] The time for transport companies to deliver the study’s core recommendations; disclosure of plans, sustainability investments, net-zero targets, and leadership, has come.

Op-ed: The UK Needs a New Net-Zero Focus

This article looks at the lackluster progress of the UK's net-zero targets which are set at 100% emission-free by 2050. It concludes that the UK government needs to pursue these aims more aggressively. 

Published: 11/10/22

Link to article: ibexpub.media/the-uk-needs-a-new-net-zero-focus/ 

In 2008, the UK government passed the first and most ambitious piece of climate change legislation seen in the world, the Climate Change Act, which set an ambitious goal for the UK to be 80% emission-free by 2050”. By the sixth carbon budget in 2021, the Conservative government upped the transition to 100% emissions free by 2050, plus a new waystation target of 78% carbon-free by 2035. Electric vehicles were essential to this plan and the government promised to “overcome strategic, political, and technical barriers, accelerate the production of zero emission vehicles and increase economies of scale, to make the transition faster, lower cost, and easier for everyone”. Enthusiasm was epitomised on the eve of the UK’s hosting of the COP 21 conference in Glasgow, when Prime Minister Boris Johnson announced that tackling emissions was the UK’s “number one international priority”. Fast forward over what has been a cataclysmic twelve months and the spectre of net-zero targets seem to have elevated from challenging to epic.

The war in Ukraine and the sanctions that followed by the EU, the UK, the US and beyond on Russian oil and gas, has had a disastrous effect on the UK’s energy supply, seeing average monthly energy prices increase by £100 per month by March 2022, and have since increased drastically higher. Electricity, an essential ingredient of the decarbonized transport system, has been burdened by this as the cost of production in fossil fuel power stations has skyrocketed. What was thought of as the cheap price alternative to expensive internal combustion engine vehicles, electric cars, have seen their operational costs escalate to 18p per mile (1.6km), reaching parity with petrol at 19p, and with diesel at 21p in public charging points. For example, the EV recharging point operator Osprey was forced to almost double its charging rate from 66p per kilowatt hour to £1 per kilowatt hour. Since May 2022, this represents a 42% increase in prices and is set to rise as general energy demand increases in the winter.

These price increases present a monumental task for the UK government. If the transition to electric vehicles (EV) is to occur in order to meet the 78% reduction in carbon emissions by 2035, then electric cars need to be cheaper than fossil-fuel alternatives. At the moment, the price advantage of running an electric car in the long-term is insufficient to offset its more expensive purchase price. This is not helped by the fact that a 20% VAT exists on public recharging compared to home-charging which is taxed at 5% VAT. There is also the issue of electric charging points. Although, a Transport & Environment report reveals the UK’s 33,996 available is enough for EVs currently on the road, the Young People’s Trust for the Environment argues there are fundamental issues with the UK’s charging network, particularly due with long charging times, 30-minute minimum, and inadequate access to charging points among in poorer households in terraced housing who cannot install private charging points.

The solution to the EV price challenge is investment in EV subsidies and charging points, but this is tricky to demand in the current state of the UK economy which has seen the pound reach an historic low following the not-so-mini budget presented by Kwasi Kwarteng in-mid September. However, long-term, the UK will have to wean itself off fossil fuels to avoid the ongoing wholesale price fluctuation of oil and gas. An option is to introduce a further windfall tax on gas company profits, which have surged since the Ukraine War and with COVID before that, is also an attractive policy choice, not least for the immediate effects on the treasury. However, this is a policy measure which the Liz Truss government is unprepared to do as detractors believe it will hinder investment into the economy. Another option is the green levy scheme which can be used to raise funds for further EV investment. The profits of both these schemes could be used as subsidies for electric vehicles that offsets their price rise, but this has not been followed through.

In contrast to the enthusiasm of last year’s COP26, the UK’s climate goals require new renewed impetus. There are no signs that the present government is looking to provide this. Whether a future Labour government could deliver on its conference slogan of a “fairer, greener future” is yet to be seen, and would require voter confidence in a party which has not won a general election in 12 years. 

Policy Briefing: Right-wing Coalition Victory Puts Italy’s Climate Future at Risk

Right-wing coalition victory puts Italy’s climate future at risk. The Brothers of Italy party led by Giorgia Meloni was elected as Italy’s largest party amongst a right-wing coalition that won 237 seats in the 399 seated Chamber of Deputies. Meloni has made her anti-EU rhetoric and Italy First position clear over the election campaign, warning EU representatives that “the free ride is over”, seeking to replace the historical process of European integration and with a sovereigntist Europe of strong nation-states. In relation to the EU’s net-zero plans, the leader of the coalition partner, the Lega Party, Matteo Salvini called on Wednesday 21st September for a referendum on the issue, asking to let “the workers of the Mirafiori plant and from all over Italy decide if it’s fair to fire people in Italy and give China an advantage”. The comment insinuates Italian car manufacturers, like Stellantis’s Fiat, will be overrun by Chinese competition who are the biggest manufacturer of electric cars in the world. How far Italy will turn its back on the pro-EU stance of its previous Prime Minister Mario Draghi is unclear given that key jobs in the coalition are not allocated until next month. EU preferences may shift at this point, as some pundits expect that Salvini may not feature in a top job. Professor of political science at the University of Rome Tor Vergata Frederiga Bindi has played down Meloni’s Euroscepticism, commenting that if “she’s a smart woman, she knows politics, so she knows very well that if she wants to last in government, she cannot go head-to-head with European institutions”. However, Bindi also notes the EU “does not have much space for grand designs”, given the rise of right-wing gains in Sweden, Hungary and Poland which could form a “populist front” against EU climate goals.

Policy Briefing: As EVs Reach a Tipping Point for Mass Adoption in America, Cyprus Lags Behind Peers

EVs could be at ‘tipping point for mass adoption’ in the U.S. The U.S. has seen a 2.83% rise in the share of Electric Vehicles (EV) on the road in the second quarter of 2022 compared to the same period in 2021, bringing the total share of EV’s to 6.6% of the US’s total light-duty vehicle fleet. California has the largest share with an uptake of 19% of all vehicle sales, with 18 other states also exhibiting a more than 5% share. Analysis by Bloomberg suggests this 5% national uptake was an “electric car tipping point for mass adoption” in 18 countries that reached it before the U.S., because technological preferences “flip” as the technology goes “mainstream”. It forecasts that the U.S. could see a quarter of new car sales go electric by the end of 2025. However, two states saw a decrease in their share in the same period, Hawaii and Maine, showing there is work to be done to improve distribution. The U.S. government under President Biden, has tried to encourage EV adoption, $5 billion given to states to invest into a nationwide charging network and $2.5 billion of grants into publicly available “charging, hydrogen fuelling, propane fuelling, and natural gas fuelling stations through 2026” part of the Bipartisan Infrastructure Law. The newly introduced tax credit system, part of the Inflation Reduction Act passed last month, indicates the U.S. government is looking to further encourage EV adoption in future, however recent predictions by the Financial Times indicate it will take a long time before these measures reduce the price of EV’s. Tesla holds the largest share of the EV market at 66%, but this is lower than previous years indicating that companies like Ford, Volkswagen and Hyundai will also be geared up for the EV take-off. No one knows how long it will take before “the great American road trip is going to be fully electrified”, but it could be soon. 

Policy Briefing: U.S. Act sees ‘largest investment ever’ in green energy technology

U.S. Act sees ‘largest investment ever’ in green energy technology The Inflation Reduction Act (IRA) on 16th August 2022 invests $369 billion federal funds into “climate change and energy security” to secure a battery and metals supply chain that competes with China. Existing subsidies will be raised to $7,500 on new cars, $4,000 for used vehicles and $40,000 for commercial vehicles. Tax credits for green energy projects will rise to 30% . lasting into the 2030’s allowing for greater certainty for investors in solar, storage, wind and nuclear energy as well as innovations in new industries like carbon capture, direct air capture (DAC), clean hydrogen and sustainable aviation fuels (SAF). Joseph Curtin, the managing director for power and climate at the Rockefeller Foundation, calls it the “biggest thing to happen in international climate diplomacy in decades” and now means the “US can come to this year’s UN climate conference with the position of ‘We’re not only talking the talk; we’re walking the walk’”. However, a couple of the U.S’s closest security allies express concern with U.S. protectionism in the Act. The Act states that tax credits will only be eligible if 40% of critical metals in new batteries are supplied from the U.S. or a free-trade agreement by 2023 and 80% by 2026. Battling with record inflation on energy, the EU says it is “deeply concerned” by a “potential, trans-Atlantic trade barrier”, and complains it “discriminates against foreign producers” and thus is “incompatible with the WTO”. However, the measures are forward-thinking, and have been praised by environmentally concerned people for its potential to create a “green vortex”, lowering the global price of green technology by subsidising innovation. The measures’ durability is integral to the fate of the green transport industry and decarbonisation goals that will hasten over throughout this decade. 

This article looks a Liz Truss and Rishi Sunak's environmental policies during the Conservative leadership contest in the summer of 2022. I argue that neither candidate have it high on their policy agendas due to the limited priorities of the Conservative electorate. 

Published: 23/8/22

Link to article: ibexpub.media/net-zero-targets-side-lined-in-crucial-tory-leadership-contest/ 

The Conservative Party has had a chequered history with climate change policy. Back in 2006, David Cameron’s party rebranded itself as environmentalist, telling voters to “vote Blue to go green”. However, while record-breaking temperatures in the UK’s latest heatwave actualise fears of impending catastrophe, and energy insecurity exacerbated by the ongoing war sets to jeopardise net-zero targets, the two remaining candidates vying to become next Prime Minister on 5th September 2022 seem indifferent to the crisis.

Rishi Sunak and Elizabeth Truss both express concern at net-zero targets harming business. This follows the tone of fellow leadership hopeful Badenoch likened net-zero targets to ‘unilateral economic disarmament’. [1]

A former commercial manager at Shell, Truss has continued her record of scepticism to net-zero. Her policy proposals fly in the face of her claim she was “a teenage eco-warrior before in was fashionable”, announcing on a BBC debate on Monday 25th July that she wanted to “lift the green energy levy” and on a later show that she would lift the government’s moratorium on fracking. [2] [3] As Secretary of State for the Environment, she cut subsidies for solar farms in 2016, having claimed they pushed food production overseas and were ‘a blight on the landscape’. [4] She is also a consistent supporter of a third runway at Heathrow in the face consistent evidence that reducing flying is pivotal to net-zero targets.

Her reluctance to climate change issues is captured by her rigid opposition to the UK’s hosting of the COP 26 climate summit in September last year, where sources from the cabinet report she argued “this is too expensive” and “we shouldn’t be taking responsibility”. [5] She reportedly delayed her attendance to the summit, deliberately flew against advice, only to use her speech to end a fishing dispute with France. [6] Her flagship policy is a modest commitment to innovating technology such as electric vehicles. However, her priority is for these policies not to “harm people and business”. [7]

Rishi Sunak has stated similar fears, announcing that if climate policies go “too hard and fast, we will lose”. [8] Last April, as Chancellor under the floundering Johnson government he blocked a ‘green homes’ plan which would have invested money in home energy efficiency improvements for poorer households taken from a levy on energy bills. In February, he is alleged to have pushed for the ‘fast-track’ approval of six oil and gas fields in the North Sea, bypassing the regulatory bodies, despite declining resources in the basin and its detriment to UK net-zero targets. [9]

Defying calls by Conservative colleagues, Sunak pledged to maintain strict rules on onshore wind farms in “recognition of the distress and disruption that onshore wind farms can often cause” despite their potential for low-cost electricity bills. [10] Offshore wind farms reportedly can deliver energy four times cheaper than gas power plants. An assessment of Sunak’s voting record in Parliament by the TheyWorkForYou website concluded he “almost always” voted against measures to prevent climate change.

Neither candidate is willing to put climate issues as a central feature of their campaign. This is a notable shift in tone from departing Prime Minister Johnson who pledged to make Britain the “cleanest, greenest country on Earth” and declared a ‘Ten Point Plan for a Green Industrial Revolution’. [11] However, with the recent ruling by High Court that the government was failing to meet the obligations of the Climate Change Act 2019, and fellow Conservatives like Zac Goldsmith accusing candidates of not giving “a s*** about climate change”, this neglect may prove environmentally and politically costly for the next Prime Minister. [12]