After a poorly received autumn budget and sluggish economic figures, Chancellor Rachel Reeves has been looking for ways to boost growth, from airport expansion to AI. With the economic shock being delivered by President Trump’s tariffs, the government’s central mission is now even more important. But is the Treasury looking in the right place for the ideas that could improve productivity and get the economy moving?
If we are to have a successful, modern, green economy, we need to invest more in our infrastructure. Evidence suggests that investing in better regional public transport connectivity could raise productivity, increase business access to high skilled labour and attract new investment and firms to areas. The chancellor should bear this in mind as she prepares for the second phase of the spending review in June.
We make the case in a briefing published today for a real terms increase in capital investment in transport. This would deliver on the government’s ambitious public transport agenda, support the growth mission, help to create healthier communities and cut carbon emissions.
Traffic congestion causes poor productivity and pollution
Britain has seen persistently poor growth in productivity since the financial crisis. Better transport is a good way to boost productivity as it enables people to travel to jobs best suited to their skills, and allows companies to affordably access the materials and supplies they need. Yet the UK is one of the most traffic clogged countries in Europe and London has been ranked as the continent’s most congested city. We’re literally idling, costing our economy an estimated £7.7 billion in 2024.
Traffic also causes poor air quality in our urban areas that worsens a huge range of respiratory health problems and contributes to tens of thousands of early deaths each year. The government estimates that meeting its Environment Act targets to reduce particulate matter (PM2.5) pollution – including fine micro plastic particles from brakes and tyres – could result in a £710 million increase in economic productivity by 2040.
We need a new plan
Previous governments made the mistake of writing off rail in the fifties and sixties, ripping up huge swathes of the network, leaving many communities dependent on car ownership. This problem has worsened in recent years as new developments have been built away from public transport connections.
Despite coming to power on a promise to modernise transport, the current government has even cancelled some investment in regional rail. In July 2024, the chancellor cut the £500 million Restoring Your Railway fund, designed to channel funds into reopening regional rail links. This is a false economy.
One way to breathe life into our ailing economy, while at the same time clearing the toxic air in our towns and cities, would be to outline a plan to transform public transport in the ten year infrastructure strategy the government is publishing this year. This has to be a priority and be backed with capital investment to achieve the strategy’s three objectives: boosting growth, accelerating climate action and ensuring social infrastructure supports public services.
Regional transport inequalities hold places back
London is an example of transport investment working. High levels of per capita public transport investment have paid off with billions in returns every year in social, economic and environmental benefits. Londoners don’t need to own a car with round the clock bus services and world class mass transit lines like the new Elizabeth Line.
People everywhere in the country should be entitled to these benefits. Other UK regions have had far lower rates of per capita investment. That’s left many of our cities without mass transit systems, languishing in the slow lane behind comparable European cities.
Our recent report Next stop, better rail used Trainline’s ticket data to map rail journeys across the UK. It revealed the scale of regional inequalities. Rail compares favourably with driving for journeys in and out of London, but train travel within and between other regions often isn’t competitive, on either the cost of tickets versus fuel or journey times. This has left many communities reliant on affording a car to access good jobs, amenities and economic and leisure opportunities.
London-style public transport across the country would unlock growth
London’s standard of integrated, frequent, reliable public transport should be replicated across the country to unlock the potential of our regions and cities like Birmingham, Glasgow, Liverpool, Cardiff and Leeds.
As the government develops its national integrated transport strategy to improve connectivity, it must ensure that there is sufficient multi-year funding to bring our biggest cities up to the same standard of public transport provision as equivalent European cities and London.
Change is already underway. In Greater Manchester Mayor Andy Burnham has launched a “transport revolution” to expand bus and rail services in the region and deliver a London-style transport system.
The new West Yorkshire tram system between Leeds and Bradford is a great example of an integrated scheme with multiple benefits. Light rail can be delivered more quickly and at a fraction of the cost of traditional rail projects. Accelerating electrification of rail track could also speed up journeys, while cutting maintenance costs and emissions.
Improving the rail network needs investment, but there are relatively low cost ways to increase capacity and improve services without building new lines. The mid Cornwall metro project between Newquay and Falmouth is a great example. For £56 million it will upgrade stations, double services, improve connectivity across the county and provide an extra 700,000 seats each year.
With the government poised to reintegrate rail operations under Great British Railways, extend devolution deals and set out an integrated transport strategy, we have a once in a generation opportunity to really get Britain moving. But the chancellor needs to deliver the investment necessary to back this ambitious agenda. This could bring huge benefits to our regions, increasing opportunity and speeding up our economy, while protecting our health and the climate. Now’s the moment to get on board for better transport.
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