Justin Urquhart Stewart: Forget HS2! What we need is great freight trains

The founder of Seven Investment Management on why rail freight is a vital trade artery

With the statistics on the real benefits of HS2 now being questioned (HS presumably now standing for Highly Suspect), perhaps this may lead to a more reasoned debate on our transport needs and more particularly the suitability and application of rail development. For those who know me, they will understand that I am a big fan of trains and am often to be found enjoying an afternoon’s heavy shunting somewhere outside Newark – normally trying to get home. However, the illogicality and lack of imagination of our leaders’ ideas never ceases to amaze me. There is so much more we can do with what we have but this is not the time for such a rant.

This situation though does highlight the incompetence of successive governments to lay out a credible strategic plan for infrastructure as was so perfectly demonstrated recently with the power shortages. The same applies to transport. HS2 was presumably developed in a policy think tank by party ‘wonks’ trying to come up with a good idea. However, they seem to have little appreciation of the actual operations required nor of the behaviour of people and business as well as their needs for effective and efficient transport.
More important though than ensuring pompous gits in red braces are shuttled around the country – I am much more interested in something as old fashioned as rail freight. Moving goods around is far more of an indicator of a growing and vibrant economy. Few pay attention to these lumbering beasts groaning past the platforms as we wait for our train. Actually rail freight is a vital trade artery and in many ways far more important that it gets goods to and from ports rather than gits to and from London. Thus, we should consider better freight routes to Liverpool, Felixstowe, Southampton, Hull and the new Thames Gateway – and others.

For years goods trains were the butt of the rail system with declining usage and value. In the 25 years from 1965, the tonnage of rail freight dropped from 25bn to 15bn. British Rail was in decline and business was flowing towards the liberalised road hauliers.

Now whatever your views on privatisation in 1994, freight levels have increased by some 65% and now have improved such that they now have an efficiency level measured by a ratio of staff to millions of kilometres travelled, dropping from 100 to 65. There is now a far more competitive environment (which you don’t get on the passenger side directly with local monopolies) with seven freight companies competing with each other.

As you may have noticed when watching these things go past (how sad I am) most seem to originate in China, but now there are an increasing number of domestic users, for example Tesco, they now have five trains running each day. More investment is going to be needed with electrification to speed up connections to the ports, but also there will be a need for more capacity, and we can’t wait for HS2 not to happen in 15 years time. We can build new capacity now, next to existing tracks and with double deckers where appropriate. So here is to the slow freight trains running through the night and across the country. That’s our industry moving. That’s great freight.

Justin Urquhart Stewart is the founder of Seven Investment Management and a regular media commentator. Originally trained as a lawyer, he has observed the retail market industry for 30 years whilst in corporate banking and stockbroking.