There was cross-party warmth, plenty of nodding in agreement, and a familiar chorus about growth, resilience and decarbonisation. Yet beneath the polite applause lies a harder truth. The sector is still waiting for the UK government to match rhetoric with resolve. In fairness, it is not the only sector seeking some decisiveness. It iss becoming a bit of a political joke. However, if rail freight is to grow by 75% by 2050 – a target ministers are fond of quoting – then it is high time to get on the footplate and start driving. The time for incrementalism has surely passed.

A reception worth its salt – and its spend

Parliamentary receptions are not cheap. I speak from experience, having signed off such events in Edinburgh, and I suspect the catering bill here would have troubled the four-figure mark as well. So, if you are going to spend a wagonload of members’ money in Westminster, you had better make it count. The Rail Freight Group did just that, arriving not empty-handed but armed with Freight Forward – a report with both substance and intent.

They were right to do so. As the premier advocates for the sector, the Rail Freight Group has a duty to speak up, especially within earshot of the debating chamber. If not them, then who? The report makes a clear and compelling case for rail freight as an economic enabler, a decarbonisation tool, and a pillar of national resilience. Sure, they’re all the buzzwords, yes, but underpinned by real-world examples.

Those examples matter. Moving millions of tonnes of food to supermarket shelves, exporting cars to European markets, and transporting critical minerals. This is not abstract policy, but the daily business of keeping the UK functioning. Legal eagle Lydia Cullimore of Burges Salmon captured the mood well, describing the report as a “clear and compelling position paper” that highlights both current value and future opportunity. It is difficult to disagree. Case made. Well, not quite.

Growth, but on whose terms?

The report’s central thesis is straightforward. It proposes that rail freight can do more. It can help decarbonise logistics, strengthen domestic supply chains, and support emerging industries. Electrification, alternative traction, and technological innovation all feature prominently. In fact, rail in general and rail freight in particular, is an embodiment of future industrial function that everyone can see passing through every station, every day. The direction of travel is clear, even if the track ahead is less so. Ambition alone does not lay rail.

The sector’s growth hinges on capacity, access and policy certainty. These are three areas where government performance has been, at best, uneven. Rail advocate and friend of the sector, Rupert Brennan-Brown’s intervention at the reception struck a chord, particularly his emphasis on safeguarding access rights for freight operators. Without long-term certainty, private investment will always hesitate at the signal.

This is where the conversation inevitably turns to Great British Railways. That overarching body that will, eventually, rule the roost over the re-nationalised railways (freight operations excepted). However, those forthcoming reforms offer an opportunity to embed freight at the heart of the network, rather than treating it as an afterthought. Opportunity, though, is not necessarily the same as outcome. The risk remains that, in a system dominated by passenger priorities, freight will once again find itself squeezed into the margins. Time to make a song and dance in the House? Absolutely yes.

Fine words, familiar promises

To be fair, ministers are saying the right things. I’ve lost count of how many transport ministers have given me their personal reassurances for one project or another. This week, the flamboyant rail minister Lord Hendy reaffirmed his support for the sector and the growth target, while opposition voices have called for statutory protections to underpin investment. There is, as Lydia Cullimore noted, a reassuring degree of cross-party consensus.

Consensus without action is a well-worn Westminster tradition. The rail freight sector has heard these commitments before. Cue a procession of ministers (cross-bench) pulling off the right signals on capacity, on modal shift, on decarbonisation. Progress has been made, certainly, but rarely at the pace or scale required. The result is a lingering sense that rail freight is perpetually on the cusp of a breakthrough, yet never quite allowed to break through.

If Freight Forward does one thing well, it is to crystallise that frustration into a constructive agenda (perhaps that’s where I’ve been going wrong). It sets out not just what rail freight delivers, but what it needs. There should be investment in infrastructure, protection of access rights, and a regulatory framework that encourages growth rather than constrains it. None of this is revolutionary. All of it is necessary.

The real test lies ahead

Ultimately, the success of this report will not be measured by the quality of the reception or the warmth of the parliamentary applause. It will be judged by what happens next. Will the government translate endorsement into policy? Will Great British Railways be structured in a way that genuinely supports freight? Will the promised growth materialise, or remain an aspiration?

There are reasons for cautious optimism. The economic case is stronger than ever, the environmental imperative is undeniable, and the sector itself is more coordinated in its messaging. Freight Forward is, in many ways, a mature document – confident in its arguments and pragmatic in its recommendations.

But maturity on one side of the table must be matched on the other. If government is serious about growth, resilience and decarbonisation – and it insists that it is – then rail freight must move from the periphery to the mainstream of transport policy. Otherwise, we will be back in Westminster in a year or two, raising another glass, unveiling another report, and asking the same question. Minister, what, exactly, are we waiting for?

In its response to the Ministry of Housing, Communities and Local Government consultation, RFG said planning policy is “essential” to securing new rail freight sites and safeguarding existing ones. It added that the government’s goal of moving freight by rail, aiming for 75 per cent growth by 2050, will depend on terminals being located in optimal locations, with clear planning guidance. RFG added that the draft framework reflects concerns raised in its response to the previous Department for Transport Call for Evidence, which highlighted difficulties members face in securing planning permission.

Strategic planning and economic alignment

Later this week, another terminal (Northampton) will officially open. Last week, work progressed on Radlett at St Albans. Both facilities have been years in the making, amid almost interminable objection processes. That may be a scenario that’s consigned to history if the new regime is passed into law. RFG welcomed the draft framework’s stronger emphasis on aligning planning with national economic strategies. The group said increased attention to relevant strategies, including industrial strategy, would help rail freight be considered in commercial development planning. It noted that rail freight is “a key area of economic growth and therefore must be regarded in commercial development plans.”

The group also supported policy proposals aimed at ensuring business land and premises meet demand. RFG said that prioritising commercial development proposals’ economic benefits “such that it reflects the Industrial Strategy and its support for freight and logistics advancement is critical”. The comment reinforces the view that rail freight and logistics should be embedded early in strategic planning decisions rather than being treated as secondary considerations.

Freight policy and decision-making clarity

RFG said it strongly supports the draft NPPF’s decision-making policies for freight and logistics uses, which aim to promote effective and efficient transportation. The group noted that accessible transport links, consideration of environmental and community impacts, and adequate vehicle parking are “key factors in ensuring that future freight and logistics sites contribute to effective and efficient goods transportation”.

It also welcomed the clarification of what the government calls the agent of change principle, which protects existing terminals where new development occurs nearby. RFG said the proposed policy “improves clarity on how decision-makers will apply the agent of change principle, and we welcome its protection of existing terminals when adjacent development occurs”. The principle has long been a concern for operators seeking to prevent incompatible development from constraining rail freight operations.

Land supply and minerals concerns remain

Despite welcoming the draft NPPF, RFG highlighted ongoing risks around land allocation and safeguarding. The group stressed that rail freight terminals must be identified early in local plans to ensure sites are protected from other development pressures. Without early allocation, opportunities for new rail-connected sites could be lost, particularly in urban areas where land is in high demand.

The group also raised concerns about aggregates and industrial minerals, a significant market for rail freight. RFG echoed producers’ worries regarding the removal of recognition of essentiality and the need for “a steady and adequate supply to support economic growth.” It warned that planning policies must continue to support these freight-intensive sectors to maintain national infrastructure and economic resilience. RFG’s response echoes the sector’s view that the draft NPPF represents an opportunity to strengthen planning for rail freight, but only if decision-makers recognise its strategic importance, safeguard land, and maintain clarity in policy application.

Putting “75% growth” on the tracks, while reforming the economy down to net-zero by 2050, is something even the National Audit Office admits remains a “colossal challenge”. Even in base logistics terms, increasing the roughly 600 daily freight trains by something like 450 extra workings exercises the assumptions that demand, paths and locomotive power can all be found. A simplistic observation, but that’s what “colossal challenge” means. All this, and there are still hundreds of megatons of carbon being emitted annually, even in industrially diminished Great Britain.

Wide scope for rail, but big issues too

Rail freight offers an appealing and visible opportunity to demonstrate intentions. Shifting goods from road to rail could deliver primary, secondary and tertiary carbon reductions. One freight train can realistically replace dozens of lorries, with far fewer emissions than by road. It’s a win for the industry, the environment and, possibly most importantly, the politicians.

However, even if rail freight throughput were to double, triple, or more, it would still remain a small fraction of the total UK logistics market. Today, rail accounts for only eight to 10% of domestic freight tonne‑kilometres. By comparison, road carries more than 80%. Modal shift to rail does help, but even a modest effort to decarbonise heavy goods vehicles could rival or exceed the climate benefit of expanding rail freight alone.

Add to that, a “net-zero-ready” rail freight fleet is also still a long way off. In 2025, the bulk of UK freight locomotives will remain diesel-powered – something it has in common with much of the rest of the world. A rough power-type breakdown of the current UK fleet is approximately 75% diesel, 15% bi-mode (with some tri-mode), and 10% pure electric.

The fleet, however, is not frozen in time. A slow renewal is underway. The introduction of modern bi-mode, dual-mode and tri-mode locomotives offers a path toward lower-carbon freight, especially as electrification of mainlines gradually expands (Midland Main Line excepted, of course) and battery or low-carbon fuels come into play.

More freight operators are investing in future-proof traction. GB Railfreight (GBRf), for instance, has ordered 30 Stadler-built Class 99 electro-diesels. The first four are here already. The units are built to run on overhead electric power – or on diesel – and, critically, they’re HVO ready. The specialist traction provider, Rail Operations Group (ROG), is still experimenting with their tri-mode Class 93. They have plans for up to thirty units, capable of electric, diesel or battery operation, providing adaptability on mixed or partially electrified routes.

There are still pure-electric freight locomotives (older re-engineered passenger units) but their numbers remain modest, reflecting decades in which diesel traction was the norm. Electric freight locomotives now constitute around 9% of the total locomotive fleet.

Obstacles to decarbonisation ambitions

Adoption of alternative fuels, such as HVO (hydrotreated vegetable oil), has been successfully trialled and even put into revenue-earning service. However, for the next generation of traction, which will be active come that 2050 deadline, operators definitely favour multi-mode traction flexibility – out of necessity. They have to avoid being locked out of non-electrified routes – while the UK Government continues to prevaricate over fully wiring up the network.

The challenges remain substantial. Full electrification is unlikely to reach every siding or port by 2050. Even if electrification increases, and even if multi-mode locos proliferate, the pace of change will likely remain gradual. The existing diesel fleet has many years of useful life ahead, and operators have limited incentive to retire well-functioning diesels while they remain cost-effective.

What net zero really means and how rail freight fits in

Politicians are invited to take special note of this next point. When we talk about net-zero rail freight, we often fall into the trap of seeing the rail industry in abstract from its overall economic contribution. It might mean a fully decarbonised freight-loco fleet: electric, battery, or renewable-fuel traction throughout. On the other hand, it could mean that freight modal shift to rail reduces overall transport emissions. The holistic view is preferable, especially if rail works in concert with low-carbon HGVs, inland waterways, and better logistics planning.

The scale is the thing. Even if rail freight achieved 75% growth by 2050 and converted its fleet to low- or zero-carbon traction, the proportion of goods moved by rail would still be modest compared with road freight. For that reason, achieving a net-zero logistics sector will require progress on multiple fronts: rail freight, decarbonised HGVs, inland waterway freight, modal integration and demand-side change.

Not quite ready but poised for transformation

The technology exists. The next generation of diverse-power freight locomotives is on order, being built or already entering service. Rail freight operators are embracing them. Overhead electrification continues to expand, sporadically and unevenly across the country, and where sufficient power supply exists, freight can run on zero-carbon electricity (just don’t mention the northern section of the East Coast Main Line).

Today, the foundation of the network remains overwhelmingly diesel. For rail freight to deliver on that 2050 net-zero mandate, fleet turnover must continue steadily for two decades. Gradual removal of legacy diesel, widespread uptake of multi-mode and electric traction, and complementary infrastructure investment will all be needed. The greatest virtue of this current diesel dominance is that it gives us time. With 25 years before 2050, there is a runway for transformation. If operators, government and customers align, the UK could deliver a freight railway that is not just greener but future-proof. It makes so much sense, it’s almost un-British in its readiness.

The company has claimed that the UK Valuation Office Agency (VOA), a body that assesses for asset-based taxation, plans to increase Eurotunnel’s business rates liability by around 200%. That would see its UK tax liability rise from 22 million pounds to 65 million pounds (about 26 million euros to 78 million euros), potentially raising total tax levels to roughly 75% of earnings. Eurotunnel described the proposal as “unjustified and confiscatory” and warned that it threatens the long-term development of cross-Channel rail freight.

CEO delivers sharp message and cancels freight projects

CEO Yann Leriche was interviewed by British broadcast media and did not hold back his disdain for the proposed hike in liabilities. In an interview with the BBC in London, he said that under the current tax regime, the whole business case for Eurotunnel was in the red. “All our investments, all our plans are becoming unsustainable,” he said.

“To face such an increase is a real issue for us,” continued Yann Leriche. “Because we know in rail, we invest for the long term.” His words could be echoed by a wide swathe of UK industry. It is understood that the Valuation Office Agency has engaged with Eurotunnel and its advisers over the past 18 months, but discussions have yet to yield a resolution.

Eurotunnel said it will use “all measures at its disposal – including legal action” to assert its rights under the 1986 Franco-British concession. – the legislation that gives the owners Eurotunnel and their parent Getlink a legal right to challenge unilateral taxation anomalies – such as the unprecedented hike in business rates on the UK side of the operation.

The abandonment of the Barking terminal (where the first “New Silk Road” train arrived from Yiwu amid much fanfare less than a decade ago) and the proposed Lille‑London freight link underscores a serious effect UK fiscal policy is having on international operations and trade. The sharply increasing taxation burden in the UK is obviously deterring private investment in UK rail freight, particularly where long-term, high-capital projects are concerned. Eurotunnel’s announcement is merely the highest-profile such move. These cancellations highlight the risks to both investment and decarbonisation targets.

Opinion: Barking mad Government policy under fire

“This is nothing short of a damning indictment of the UK Government’s fiscal policy”, says Simon Walton, RailFreight.com’s UK Editor. “The announcement, coming as it does less than a week before Chancellor Rachel Reeves presents her Budget, could not have been timed to send any other message.

“The language used by Eurotunnel is not that of a broker’s margin call; this is an outright ‘stop-loss order’ – when nerves have broken and dealers see no recovery. In short, the dealers’ screens have gone red, and they’re getting out before they get rinsed. Is this an overreaction? Not really. This is an international response to the domestic policy of the UK Government and, if the international markets take note, this could be very serious indeed. It’s not just Eurotunnel’s freight plans that are off the rails; it’s the UK economy as a whole.”

The UK’s Modern Industrial Strategy is a 160-page document with a front cover logo that comes straight from the same poundshop printing press as the Great British Railways logo. It’s cheap-looking but probably expensive, and as inspiring as its railway counterpart. Much the same can be said of the body of the document. The emphasis on “Great” underplays nationhood and speaks to grand ambient over practical reality. The UK government has much work to do to bring the rail freight industry back onside.

Give us the tools?

Megaprojects and big ambitions, but very little on the practical end of the achievable scale (unless you include a promise to close some level crossings around Wrexham). Hundreds of billions are proposed for headline-catching high-speed and powerhouse plans. Meanwhile, modest improvements and readily implementable plans are few and far between. The UK Government’s new Modern Industrial Strategy is presented as a long-term plan to reshape the economy, drive clean energy, and back key industries. It talks of certainty, stability and ambition.

These are the tools that business needs to invest for the future. However, for all its detail, one glaring omission stands out. Guess what that might be? You got it: rail freight. An industry already delivering productivity, decarbonisation, and resilience, barely gets a mention. For a sector that should be integral to the government’s own goals, its absence is as disconcerting as a last train cancellation after the staff have gone home.

Rail freight is an afterthought, as it often is. The strategy gives space to rail, but only as part of the passenger agenda. HS2 is cited as transformational – insert your interpretation of that here, especially if you are from the betrayed north of England, where high-speed trains will never run. Northern Powerhouse Rail? The proof will be in the laying of the first track – until then, it’s a crawl through Manchester’s Castlefield Corridor.

New connections in Wales and Scotland are promised – but only vaguely. A reference to “rail upgrades in Wales” is even more broad-brush than “support for the Edinburgh-Glasgow Central Belt” – two cities already connected by four routes and sometimes more than ten passenger services an hour (Manchester and Liverpool look on with incredulity). Freight, by contrast, is consigned to passing references, often lumped together with ports and logistics.

Will we finish the job?

The Railway Industry Association was less than enthusiastic, but perhaps maintained a more civil level of response. “There is some mention in the Industrial Strategy for rail,” they said. “We remain concerned that this Strategy does not include transport and rail as significant enablers to growth, either for the eight specific sectors mentioned or for UK industry and the economy more widely.”

Rail is a large and growing industrial sector in its own right, claims the RIA. They’re right. They say it’s already supporting around 640,000 jobs, providing £43bn (€51bn) Gross Value Added, and providing over £14bn (€16.5bn) Treasury revenues annually. With the Chancellor Rachel Reeves scrabbling to find new ways to tax Britain into submission, perhaps recognising that the Government’s original aim of “growth, growth, growth” might be better served by recognising the contribution that the rail industry already makes to her coffers.

It’s often quoted that for every pound spent in rail, £2.50 is generated in the wider economy. For every rail job created in rail, four jobs are supported beyond rail – and plenty of that is driving exports. Not that transport-related exports get much of a mention, even though UK Export Finance has helped secure major overseas rail project contracts for the UK.

That framing treats rail freight not as an industry in its own right, but as a side effect of infrastructure. There is no freight sector deal, no recognition of its manufacturing base, and no place among the eight industries singled out for targeted investment. It is a narrow view — and a wasted opportunity.

Targeted industries for investment – the “IS-8”:

Advanced Manufacturing – including aerospace, automotive, and other high-tech engineering.
Creative Industries – film, TV, music, gaming, cultural production.
Life Sciences – pharmaceuticals, biotech, health data.
Clean Energy Industries – renewables, nuclear, emerging low-carbon tech.
Defence – security, defence technology, dual-use innovation.
Digital and Technology – AI, quantum, sovereign computing capabilities.
Professional and Business Services – finance, consultancy, digital adoption.
Financial Services – banking, fintech, investment.

Rail freight (and the rail industry more generally) is not among these eight. Automotive and aerospace industries are given bespoke pathways to electrification, alternative fuels and digitalisation. The ambition is clear, and the support substantial. Yet rail freight, which already offers four to five times lower carbon emissions than road haulage, is left outside the clean growth story. The most obvious decarbonisation lever in the logistics system — shifting lorries off the road and goods onto rail — goes unmentioned. The omission is all the more glaring given the government’s own net-zero targets. A genuine clean growth agenda should start by backing the transport mode that is already cleanest.

Time to put rail freight on track

Industrial strategies are not about everything everywhere. They are about choices. However, if the UK is serious about clean growth, productivity and resilience, choosing to leave rail freight out is the wrong call. A modern industrial strategy should not only plan for passenger connectivity but also put freight at the heart of mobility, clean energy and logistics policy. By failing to embed rail freight into its “Grand Challenges”, the government has left a gap that industry must now fill.

Rail freight must keep making its case, loudly and persistently. If Britain is to build a strategy fit for the 2030s, rail freight cannot remain on the margins. It needs to be brought centre stage — where it belongs.

The Spending Review will set departmental budgets for the next four years. Defence, health, education and social security are all at the head of the queue. Already seventh in line for national spending, the trajectory of transport investment could be shaped for a generation in the next few days. For rail freight, the question is whether the rhetoric of growth and decarbonisation will be matched by the funding and policy support needed to deliver it.

Freight growth target demands infrastructure investment

The UK Government’s Department for Transport commitment to a 75% increase in rail freight by 2050 is ambitious. It’s aiming to shift significant volumes from road to rail. Achieving this requires substantial investment in infrastructure, including capacity enhancements and network upgrades. Albeit, road already carries by far the biggest burden of freight tonne-miles, and rail capacity could be expensive to realise.

Cost is always a factor. Key projects like the Ely Area Capacity Enhancement programme are critical. This scheme aims to alleviate bottlenecks and increase capacity for both freight and passenger services, particularly benefiting routes from the Port of Felixstowe to the Midlands and the North. Similarly, ongoing upgrades to the East Coast and West Coast Main Lines are essential for accommodating increased freight traffic and ensuring network resilience.

Electrification is essential for decarbonisation

Electrification of the rail network is a cornerstone of the UK’s strategy to achieve net-zero emissions by 2050. Electrified lines offer a cleaner, more efficient mode of transport, reducing reliance on diesel and lowering greenhouse gas emissions. Nevertheless, energy prices in the UK are among the highest in the world. That has proved a barrier to rail freight development and economic development at large.

However, cost-cutting seems more likely than investment in this week’s Review. Progress on electrification has been slow. Industry bodies, such as the Institution of Mechanical Engineers, have highlighted the need for a rolling programme of electrification to provide certainty for the supply chain and deliver cost efficiencies. The Spending Review presents an opportunity for the government to commit to such a programme, aligning infrastructure investment with environmental goals.

Funding decisions and net-zero commitments

Environmental groups have warned that the Spending Review must align with the UK’s net-zero commitments or face legal challenges. Friends of the Earth (reported by the UK newspaper The Guardian) have emphasised the legal obligation to present a credible climate action plan, cautioning against cuts to green initiatives.

For the rail freight sector, this underscores the importance of securing funding for projects that contribute to decarbonisation. Investments in electrification, capacity enhancements, and modal shift initiatives are not just economic decisions but also environmental imperatives.

Regional connectivity and economic growth

The government has signalled a focus on regional connectivity and economic growth, with plans to invest in transport infrastructure across various city regions. Projects like the proposed Liverpool-Manchester rail link (reported by our sister service RailTech.com) are part of a broader £113 billion capital investment plan aimed at stimulating regional economies.

While these investments are welcomed by the rail industry at large, it is crucial that freight considerations are integrated into regional transport planning. Ensuring that freight routes are included in infrastructure upgrades will support economic growth and help achieve the government’s freight and environmental targets.

Industry calls for clarity and commitment

The rail freight industry is calling for clear commitments and sustained investment to support growth and decarbonisation. The Chartered Institute for Logistics and Transport is among the stakeholders who emphasise the need for a coherent strategy that includes infrastructure development, electrification, and policy support. CILT UK believes that the Government should focus on the improvement of key rail routes connecting major ports and quarries to centres of demand, promoting the transfer of long-distance freight from trucks to trains.

As the Spending Review approaches, the sector awaits confirmation that the government will back its ambitious targets with the necessary resources. The decisions made now will shape the future of rail freight and its role in a sustainable, net-zero economy. Economic observers are in no doubt. The next few days could set the tone for the next generation. That holds true for the rail freight sector as well.

It is being regarded as the saving of Scunthorpe from questionable Chinese owners. Its rail production and rail infrastructure are, of course, much less important than the 2,500 jobs that are reprieved. However, the ability to manufacture virgin (also called “bright”) steel is regarded as a matter of national strategic importance. Loss of the plant would have been a crippling blow to many associated industries, rail freight among them.

All rails lead from Scunthorpe

Matters moved on rapidly from last week’s threatened closure. Scunthorpe’s owners, the Jingye corporation of China, rejected a rescue bid. The situation became critical when the Chinese company attempted to cancel shipments of coking coal and iron ore. Without the fuel and raw materials, the blast furnaces would have gone cold. In steel-making terms, that is a life-ending scenario. The ageing furnaces, one of which has been continuously fired for almost 90 years, would be lost.

Scunthorpe’s twin blast furnaces are the only remaining examples in the UK. The closure last year of Port Talbot in Wales left the Lincolnshire plant out on its own. The loss of Scunthorpe would have left Britain as the only nation in the G7 economic grouping unable to produce virgin steel (the other members are Canada, France, Germany, Italy, Japan, and the United States).

It’s nationalisation, Jon, but not as we know it

The gravity of the situation was emphasised by the recall during parliamentary recess and for a weekend sitting. The last time such circumstances were invoked was in 1982. That was to debate a war response to the Argentinian invasion of the Falkland Islands. Legislation, which normally can take months, passed through both houses of parliament in one afternoon. It received the signature of King Charles (Royal Assent) in less than twelve hours.

The Government is refusing to call it a nationalisation. However, the Business Secretary, Jonathan Reynolds, has been given leave by parliament to take any necessary means to secure the immediate future of the plant. Nationalisation it may not be, but whatever civilian equivalent there may be to a field marshal commission has been bestowed on UK Business Secretary Jonathan Reynolds to be general manager of the works.

Rail freight on standby to deliver

The immediate battle plan is to ensure the delivery of ore and coke to the plant. That is normally landed by sea at Immingham and transferred by road to Scunthorpe. However, if circumstances demand it, rail infrastructure could be used to deliver the urgent coking coal, if it were necessary to land it at any other port.

The British government had accused the Chinese owners of acting irrationally and blocking moves to save the plant. In the debate in the House of Commons, politicians argued that there was no other course of action left open to them. The government had already pledged £500m (€585m) in an interim payment to tide over the plant, which Jingye say is losing £700,000 (€820,000) every day. The level of financial intervention is the largest single government bailout since the banking crisis of 2008.

Roller coaster investment ride

Plans had been in hand to modernise the logistics of the operation between Immingham and Scunthorpe. The present road transfer of bulk deliveries is considered unsatisfactory. It was hoped that a rail connection would be made suitable for the 20-mile (32km) transfer from the purpose-built port to the steel works. That is obviously on hold for now.

If the government proceeds to full nationalisation, then the plant could be in line for modernisation. The younger of the two blast furnaces is around 70 years old. That would be a significant further investment, say government sources.

Railway nationalisation dress rehearsal

With the nationalisation of the railways already in motion, political parties are closely watching how the ruling Labour Party performs in this dress rehearsal for public ownership of a national strategic asset.

However, it was not all gloomy news to come out of the UK last week. At the same time as submitting to a round of media interviews on Sunday, Jonathan Reynolds took the opportunity to remind the public that Britain was the recipient of a “major investment” from Universal Studios to build a “world-class” theme park in the not very economically challenged Oxford-Cambridge Arc. He mused that metal would be needed for all those roller coasters – but didn’t speculate on the name. It for sure will not be “SteelWorld”.

Representative bodies have welcomed the opportunity to take part in yet another consultation on the future of the rail industry. However, a sheaf of responses all say that freight has been overlooked by the Transport Secretary. “A Railway Fit for Britain’s Future” consultation opened yesterday and will last for eight weeks.

Significant legal changes

Yesterday’s launch of another wide-ranging consultation on the future of Britain’s railways, could be construed as more talk without the walk. However, the industry has been more pragmatic in its response.  The Rail Freight Group says it welcomes commitment to freight but warns of risk from an “all powerful” Great British Railways – the body which will manage infrastructure and most passenger operations. It will impact freight operations but, under the UK Government’s plans, freight operations will remain in the private sector. RFG has warned that significant legal changes are being planned, and these could pose a threat to rail freight services.

“It is therefore essential that any new laws give certainty of access to enable businesses to invest and to grow,” said Maggie Simpson OBE, RFG Director General. “These are profound changes to railway legislation and it is essential that the resulting framework is effective in protecting the right of freight to run on the network and to meet its customers’ needs. We look forward to working with government to ensure that this outcome is delivered through the legislative process.”

Weakened role for ORR

The UK Government’s plans include scrapping the current legal framework for awarding rail capacity to freight operators, moving power to GBR, along with potential new powers for mayoral authorities. The RFG noted that the proposals will also weaken the role of the independent Office of Rail and Road in determining rail access, although they will retain an appeal role. The Government has, however, passed on its mandated target for increasing rail freight growth as a statutory duty on GBR to promote freight.

Later this month Great British Railways Transition Team is hosting an event, organised with another industry representative body, Logistics UK, to “Demystify Rail Freight”, as reported earlier this week. Logistics UK, which represents businesses with seven million people directly employed in the making, selling and moving of goods, says the vital role of rail freight in supporting the UK economy must not be overlooked. According to the trade body, rail freight is critical for helping the UK meet its sustainable transport goals and boost economic growth.

Annual reporting required

While in principle this consultation precedes UK-wide legislation, it should be noted that transport matters are developed in the UK. The Government in London has direct powers only in England, with the other nations making their own decisions. “The Railways Bill must include robust mechanisms to protect fair access for freight operators and grow rail freight,” said Ellis Shelton, their Senior Policy Advisor – Rail. “We will be scrutinising the government’s plans carefully in this consultation. If measures for freight are lacking, Great British Railways will not be able to meet its obligations to promote rail freight and the government will not be able to achieve its rail freight growth target.

Logistics UK has also called for public accountability to be built into Great British Railways. “It is vital that it considers the impact its decisions will have on rail freight when making decisions for the whole railway. We are therefore calling for GBR to produce an annual report, for Parliamentary scrutiny and the scrutiny of the regulator, setting out its measures to protect fair access to the rail network and deliver rail freight growth. This report should set out how GBR is working with the logistics sector and other parts of the UK government, English regions and devolved governments to achieve this.” The consultation process is open now and runs for eight weeks.

For once, an announcement from the UK government did not pigeonhole the rail industry. Rachel Reeves, the UK Chancellor, has laid out a long list of measures to boost the UK economy. The change of political ideology at Westminster has not changed the rhetoric of growth. Delivering it may remain the challenge, but if a new runway at Heathrow is finally built, it will be a programme that is finally cleared for take off.

East West politely welcomed

Rachel Reeves is the latest in a long line of UK Chancellors to promise a shopping list of infrastructure enhancements. She is also just the latest in a long line of politicians to indulge in ‘relaunching’ already committed projects. Reeves raised eyebrows by referring to “funding the transport links needed to make the Oxford Cambridge growth corridor a success, including East-West Rail, with new services between Oxford and Milton Keynes starting this year.” East West Rail – newsflash Rachel: it’s already been under construction since 2020.

However, in fairness to the Chancellor, Rachel Reeves did commit to a new review of infrastructure in her speech, covering the entire UK. “In Spring, we will publish the Spending Review and a 10-Year Infrastructure Strategy, “ she told a polite business audience in attendance at a Siemens healthcare facility in Oxfordshire. The emphasis, albeit a repeated emphasis, on the East West Rail project was quietly welcomed by the audience, many of whom may take advantage of the connectivity it will afford with Cambridge.

New town for new railway

The forthcoming infrastructure announcements may offer more tangible benefits for rail freight. However, the speech in Oxfordshire brought immediate comment from the sector. “We welcome the measures outlined in today’s speech to unlock investment and drive economic growth,” said Maggie Simpson OBE, the Director General of the industry representative body, the Rail Freight Group. “Rail freight is a key enabler of infrastructure construction, helping major projects reduce their transport emissions and keeping HGVs off local roads. Our members will be working hard to support these schemes as they get underway.” An example of that, not far from the announcement location, may well be HS2 – the high speed rail project, accounting for thousands of rail freight movements.

There were major infrastructure projects – like the third runway at Heathrow, and the hint of a new town at the junction of East West Rail and the East Coast Main Line. The latter was a little treat just dropped into conversation by the Chancellor. These will undoubtedly be supported by rail freight. This was noted by Maggie Simpson, who alerted the sector to the potential for collateral growth. “To fast track delivery of these key projects, Government needs to ensure it provides the right support for freight,” she said. “In its plans for rail reform, [it needs to] support private sector investment and ensure key terminals, particularly in cities, are protected for long term use.”

The freight sector today (Wednesday 22 January) called on the UK government to “supercharge” rail freight growth. According to the report, rail freight operators are eager to invest in the UK and to help decarbonise supply chains. The report says a thriving rail freight sector can support the delivery of the UK government’s policy, including kickstarting economic growth, achieving net zero and building new houses.

Costs must be addressed

New analysis, commissioned by Rail Partners in its report “A Greener Track”, shows that market conditions have become increasingly challenging for rail freight operators. The cost of moving goods by rail has risen over three times faster than by road in the last decade. This, says the report, has partly been driven by government policy. On the other hand, the road haulage sector may argue that their service has become more affordable, therefore widening the gap between the two modes.

That is acknowledged in the report. “To secure rail freight growth, the widening gap between road and rail freight costs must be addressed,” says Rail Partners’ synopsis. “The UK government has committed to setting a rail freight growth target, but concrete actions are needed to help rail freight compete with more carbon intensive modes of transport.”

Legislation on the horizon

Rail Partners and freight operators are calling on the government to use the upcoming legislative consultation on rail reform, expected later this month, and other policy measures, to create a framework that builds on Labour’s Getting Britain Moving document to actively champion rail freight growth. This includes retaining existing legal protections such as long-term access rights and a stable charging regime.

Each year the rail freight sector delivers £2.45bn in economic benefits to the UK economy, finds the report. Although the previous government’s “levelling up” agenda (more equitably balancing economic growth across the UK) has been played down, the report emphasises that 90% of that economic benefit is invested outside of London and the South East. “Freight operators create jobs across the UK, directly employing 6,500 people,” it says. “Many more roles [are] supported in the wider logistics supply chain.”

Work with government

“Rail freight is one of the lowest-carbon forms of land transport,” reiterated Andy Bagnall, Rail Partners chief executive. “With rail costs rising three times faster than road, Britain increasingly risks losing out on the benefits the sector has to offer in terms of growth and supporting government’s wider missions.”

Bagnall echoed the report findings, that freight operating companies want to invest in the UK and work with the government to make rail more competitive, to help decarbonise the transport sector and reduce congestion on roads. “Rail freight growth will not happen on its own,” he said. “Without measures to address the widening cost gap between rail and road, freight customers could be priced out of making the right decision for the environment and the economy.”

Rising fuel costs, track access

“A Greener Track” report says there is a broad consensus among politicians and industry that more goods should be moved by rail. This has led to successive governments committing to set long-term targets to grow rail freight. There are regulated targets to grow freight by 7.5% in England and Wales, and by at least 8.7% in Scotland by 2029.

However, the report argues that these targets are set against a backdrop of more stable environments for other modes of transport. “While road freight operators face the challenge of rising fuel costs, governments have repeatedly chosen to freeze or reduce fuel duty to mitigate this,” says Rail Partners synopsis. “In contrast, there has been a 26% real terms increase in track access charges paid by freight operators since 2015. Affordability is key in a price sensitive, low-margin freight and logistics sector.”

Policies make rail more competitive

Commenting on the report, John Smith, the chief executive of GB Railfreight, said there was a bias towards road transport expressed in government policy. GBRf, as reported earlier by RailFreight.com, is investing in cleaner traction, but still faces an uneven task in growing the sector. “This report sets out the need for a level playing field between different modes of freight transport to drive growth,” he said.

Clouds are gathering over rail investment, as part of a wider review of government infrastructure spending. However, the rail freight sector still has considerable room for growth. “Government policy decisions, such as the freeze on fuel duty, continue to benefit road freight over rail freight,” added John Smith. “As rail freight operators, we want to continue to invest in the UK and stand ready to work with government on policies that will make rail more competitive to support growth and the delivery of their missions.”