Rail industry contributes £9bn to UK economy

The rail sector contributes £9.3 billion to the UK economy each year, according to a new report published by the Rail Delivery Group (RDG). 

With a multi billion-pound economic footprint and employing 212,000 people, the rail industry and its supply chain pays around £3.9bn a year in tax, offsetting the bulk of the £4bn it receives from government.

According to the report, rail further increases the output of the rest of the economy by as much as £10.2bn a year (equating to £386 for every household in Britain), by reducing road congestion and increasing productivity.

Subsequent benefits include an annual reduction in carbon emissions of up to 7.4 million tonnes, and the prevention of around 950 serious and fatal accidents per year.

The independent report, detailing the size and value of the rail industry to the UK economy, is the first of its kind. It was prepared for the RDG by economic consultant Oxera.

Additionally, it examined how the industry fared during the recent economic downturn.

During the recession, while the economy shrunk by approximately 6%, passenger numbers increased by 5%. In previous recessions, passenger numbers had either stopped growing or dipped further than the GDP. 

The UK also fared better than other European countries. Between 2006 and 2010, the number of journeys made in the UK increased faster than in France, Italy, Germany and Switzerland.

Oxera also looked at the benefits that could have been generated by a partnership between the public and private sectors, estimating that the economy could have benefited by as much as £7.2bn in 2013. This would have been from encouraging more growth in rail freight volume and additional growth in passenger journeys of between 0.5% and 1.5% per year since the 1990s.

“We have the best railway in Europe,” said RDG Chairman Martin Griffiths.

“Now we know how important the railway and its supply chain are to every household in the country. Like the UK, other European countries have invested heavily in their railways, but none has come close to matching our industry’s success.”