UK rail industry reaches key political junction

a London North Eastern Railway train approaches King's Cross rail station in London. (File/AFP)
Updated 08 September 2019

UK rail industry reaches key political junction

  • “Better transport links across the country will be a crucial part” of rebalancing Britain’s London-centric economy, says minister

LONDON: Britain’s historic rail industry is destined for the biggest shakeup in decades that could end in renationalization and significant investment to vastly improve services amid costly fares and delays.
Full state-control of the industry is a distinct possibility should a looming general election triggered by Brexit turmoil result in victory for the main opposition Labour party.
At the same time, British Prime Minister Boris Johnson is awaiting the conclusions of a passenger-focused review of the UK’s entire rail sector described by the Conservative government as “the most significant” since the Tories privatised British Rail in the mid-1990s.
“It isn’t good enough that so many commuters spend their mornings staring at a delayed sign at their train platform,” British finance minister Sajid Javid said last week.
Delivering government spending plans for the next year, Javid added that “better transport links across the country will be a crucial part” of rebalancing Britain’s London-centric economy.
Johnson has meanwhile ordered a separate review into the High Speed 2 (HS2) railway linking London with other major English cities, but which has been beset by soaring build costs and massive delays.
Both reviews will deliver their findings by the end of the year, by which time Labour leader Jeremy Corbyn could be prime minister.
Full nationalization of the rail industry that once helped to drive the Industrial Revolution “is undoubtedly a vote winner for Corbyn and Labour,” said Gwilym David Blunt, lecturer in international politics at City, University of London.
While Britain’s rail tracks remain in state hands, the trains are run by mostly private companies enjoying large government subsidies.
“The railways were once a point of pride in this country and now they are absolutely dire compared to the rest of Europe,” Blunt told AFP.
“UK trains are crowded, expensive, often delayed, and of extremely old stock. Voters are angry at receiving little value for money.”
Rail passenger journeys in Britain have hit a record annual high at almost 1.76 billion, fueled by commuters who have no choice but to take the train to work.
The government’s “root and branch” review of the rail sector, including improvements to freight travel, is chaired by Keith Williams, a former chief executive of British Airways.
Presenting an interim update, Williams noted that UK customer satisfaction with Britain’s train services is at a decade-low.
Williams’ review “could be used to bolster the case for taking the railways back into public hands,” said Blunt.
“However, if the review is pro-private ownership it won’t necessarily stop renationalization.”
He added that “the most plausible strategy” for Corbyn would be to wait for the franchises running the train routes “to expire and take them back into public ownership.”
Another headache lying ahead is HS2. The Department for Transport last week said that the cost of the project was set to soar by more than £20 billion ($24 billion, 22 billion euros) to up to £88 billion owing to the complexity of building works.
And rather than its first phase opening in 2026, trains now face not running until 2031.
The initial phase of HS2 — Britain’s first new railway north of London in 150 years — plans to connect the capital in southeast England with the country’s second biggest city Birmingham in the Midlands.
The second phase, which the government has said may now not open until 2040, is for trains to travel further north to Manchester and Leeds.
Another major new railway line — the Crossrail project offering an additional fast direct route between Heathrow airport and central London — has also been hit by significant delays and surging costs.
Due to have opened last December, Crossrail is now not expected to begin services until 2021, lifting construction costs by £3.0 billion to about £18 billion.
To be known officially as the Elizabeth Line in honor of Britain’s queen, Crossrail will serve also towns to the east and west of the capital.


Oil retreats in face of renewed coronavirus uncertainty

Updated 22 February 2020

Oil retreats in face of renewed coronavirus uncertainty

  • G20 finance leaders to meet in Saudi Arabia at the weekend to discuss risks to the global economy
  • OPEC+ has been withholding supply to support prices and many analysts expect an extension or deepening of the curbs

LONDON: Oil prices fell on Friday as weak Asian data and a rise in new coronavirus cases fuelled uncertainty about the economic outlook while leading crude producers appeared to be in no rush to curb output.

Brent crude was down $1.56, or 2.6 percent, at $57.75 in afternoon trade, while U.S. crude dropped $1.25, or 2.3 percent, to $52.63.

"With Brent failing to breach the $60 level on Thursday despite better than expected U.S. oil inventory data, rising market uncertainty is dragging down oil prices on Friday," said UBS analyst Giovanni Staunovo.

"Market participants who benefited from the price rise in recent days might prefer not to go into the weekend with a long position."

 

China reports rise in coronavirus cases.

Japan factory activity shrinks at fastest pace since 2012.

Russia says early OPEC+ meeting no longer makes sense.

Finance leaders from the Group of 20 major economies meet in Saudi Arabia at the weekend to discuss risks to the global economy after new Asian economic and health data kept investors on guard.

Beijing reported an uptick in coronavirus cases on Friday and South Korea reported 100 new cases, doubling its infections. In Japan, meanwhile, more than 80 people have tested positive for the virus.

Factory activity in Japan registered its steepest contraction in seven years in February, hurt by fallout from the outbreak. 

"We still believe that the market is likely to trade lower from current levels, given the scale of the surplus over the first half of this year, and the need for the market to send a signal to OPEC+ that they must take further action at their meeting in early March," said ING analyst Warren Patterson.

Russian Energy Minister Alexander Novak said on Thursday that global oil producers understood it would no longer make sense for the Organization of the Petroleum Exporting Countries and its allies to meet before the planned gathering.

The group, known as OPEC+, has been withholding supply to support prices and many analysts expect an extension or deepening of the curbs.