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From the Queen’s Speech to the next election: what now for the government’s agenda?
From the Queen’s Speech to the next election: what now for the Government’s agenda?

Archive for the ‘Transport’ Category

From the Queen’s Speech to the next election: what now for the Government’s agenda?

The Queen’s Speech on 10th May will be one of the Government’s last opportunities to set out its policy agenda ahead of the next general election.

With the Conservatives trailing in the polls and expected to lose seats in this week’s local elections, will Boris Johnson take the opportunity to reset and galvanise his premiership, or will rising inflation and the cost of living mean that the Government continues to lose ground as the general election approaches?

WA’s new report on the Queen’s Speech takes a close look at the Government’s latest legislative agenda, assessing where its priorities are likely to lie in the coming months and what that will mean for businesses.

You can download the full report here:

Queen’s Speech 2022: A look ahead (PDF)

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On the charge: government plans to stimulate the uptake of electric vehicles

Encouraging the uptake of electric vehicles (EV) has become a key part of the government’s plans for a “green industrial revolution” and for meeting its Net Zero targets. The sale of new petrol and diesel cars and vans is due to end by 2030, by which time all new vehicles will be required to have “significant zero emission capability”. By 2035, the government plans that all new vehicles will be zero emission.

WA will shortly be launching consumer polling looking into the priorities of the public in relation to EVs, focusing on the barriers to greater uptake and on charging infrastructure in particular. The government has taken the view that expanding and improving the UK’s network of EV charging points will be key to achieving this transition. It is expected that many will regularly charge their vehicles at home or work, but sufficient provision of public charging points – including rapid charging stations on motorways and kerbside charging for those without a driveway – will be particularly important.

There is considerable regional variation in the availability of charging infrastructure. Only 1,000 of the roughly 6,000 on-street chargers, for example, are outside London, and the total number of chargepoints per head in Yorkshire and the Humber is a quarter of those in London. At motorway and A-road services, there are 145 public charging stations at motorways and A-road services, providing around 300 individual chargers across the UK.

Stimulating investment in charging infrastructure is seen as a priority for regulators and the government

In order to promote the development of charging infrastructure, regulators have been keen to encourage increased investment in the sector. In May 2021, for example, the UK energy regulator Ofcom approved a £300 million investment round for regional network companies across more than 200 low-carbon projects over the next two years. This is expected to include the installation of 1,800 new rapid charging points at motorway service stations and a further 1,750 charging points in towns and cities.

These new installations will go towards the government’s vision for the rapid chargepoint network in England, for which the Department for Transport has set the targets of having:

In pursuit of these targets, the government has allocated £950 million to the Rapid Charge Fund (RCF), designed to “future-proof electrical capacity at motorway and major A road service areas”. While the government has stated that it expects the private sector to deliver chargepoints where they are commercially viable, the RCF may provide a potential source of funds for businesses seeking to expand the charging network in areas where they can make the case for what the government calls “a clear market failure”.

Concerns over competition in the charging sector are likely to inform the government’s approach to regulation as the sector expands

Alongside efforts to stimulate further investment in the sector, the regulatory framework for chargepoints – particularly in relation to ensuring adequate competition – remains a subject of active debate, liable to evolve rapidly as more infrastructure is installed.

In July 2021, the Competition and Markets Authority (CMA) published its report – Building a comprehensive and competitive electric vehicle charging sector that works for all drivers – outlining challenges to effective competition in the market in relation to rolling-out charging along motorways, in remote locations, and on-street. As a result, the CMA recommended a number of “targeted interventions” to “kickstart more investment and unlock competition”.

For chargepoints along motorways, where one chargepoint operator holds a market share of 80%, the CMA found that constraints on the capacity of the electricity grid and long-term exclusive contracts prevent entry by competitors at many sites. It recommended that the government use its commitment to fund upgrades to the grid as a means of opening up competition and facilitating market entry.

For on-street charging, the CMA highlighted that the roll-out is slow, and suggested that local monopolies could arise if the market is left unchecked. It recommended that local authorities play an active role in overseeing the market in their areas, and suggested that they could require fresh powers to ensure that they were adequately equipped to do so.

In response to these recommendations, the government has confirmed that it is considering regulatory changes with a view to enhancing competition in the sector. This includes considering requiring service area operators and large fuel retailers to tender charge point service contracts openly and have a minimum of two – and at some sites more than two – different charge point operators at any particular site. The Department for Transport has also suggested requiring existing providers of charge point services at motorway service areas to make their charge points open-access rather than available only to an exclusive network or group of networks or manufacturers. The Office for Zero Emission vehicles’ consultation on the Future of Transport regulatory review closed in November 2021, and its findings will feed into legislation which may feature in the next Queen’s Speech.

The regulatory environment for chargepoint providers is thus likely to evolve rapidly as the UK’s road charging network expands over the next few years. With changes likely to impact established players in the sector as well as providing potential means of market entry for challenger firms, investors will want to monitor these developments closely in evaluating opportunities for their target or portfolio companies.

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Navigating the NSIA: which way for M&A?

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The impact of Covid on international travel this summer and beyond

The article below was written by Pauline Guénot, a member of WA’s Investor Services practice.

While Prime Minister Boris Johnson declared that on 3 June there was “nothing in the data” to suggest a delay to the 21 June reopening target will be necessary, hopes of holidays abroad are still stymied by both testing and quarantine requirements, potentially jeopardising the recovery of the travel industry.

The UK is currently operating a three-tier “traffic light” system for international arrivals, which is reviewed every three weeks. Arrivals from countries in the red list require a 10-day hotel quarantine, while those from countries on the amber list are required to quarantine at home for 10 days and book tests for the second and eighth days. Arrivals from the green list – which presently includes only 12 territories – need not quarantine but are still required to take a test on the second day post-arrival.

Key barriers facing travellers

Ongoing restrictions to international travel will exacerbate the economic damage which the pandemic has done to the travel and aviation industry. According to the ONS, it has been the worst affected by the pandemic, with a fall to its lowest turnover rate in May 2020, at just 26% of February levels, compared with 73.6% in all other industries. The Minister responsible for tourism, Nigel Huddleston, has claimed that the government’s response to the travel industry crisis has been “immense” but, as yet, there is little sign of a sustained upswing in the industry’s fortunes, as the additional hassle Covid protocols entail continuing to deter travellers.

Firstly, the testing system has drawn criticism for its cost – up to £378 for the two tests for one individual. The government has been called upon to cap it to £50 by the Institute of Travel and Tourism, and to scrap the VAT on tests as a means of promoting the travel and aviation industry’s recovery. But the issues of testing go beyond cost. Private laboratories are already overwhelmed and travellers face delays in getting their results, demanding more flexibility around arrivals and departures. This problem is likely to be magnified if the green list is expanded in the coming months. Travel insurance has thus become a hot topic, and some travel companies might also offer packages including testing to ease travellers’ minds, like TUI which has partnered with Chronomics to offer the service from £20.

Industry experts have warned that summer holidays be thrown into further chaos by hours-long queues in airports created by onerous health checks at borders both upon arrival and departure. In response to lengthy waiting times, Heathrow Airport has pledge to lay on more staff and upgrade its passport e-gates, but such improvements will not be available until autumn 2021 at the earliest.

One of the key problems with the three tier “traffic light” system is that it cannot provide the certainty necessary to book holidays abroad very far in advance. The classification is guided by the analysis of factors including the country’s rate of infection, the prevalence of variants of concern, and the access to reliable scientific data and genomic sequencing. As a result, countries can move rapidly between the lists, in both directions; Portugal had only been added to the green list for a few weeks before being removed. The Nepal variant spreading in Europe is also currently making the headlines, threatening the green list’s expansion.

Towards a global understanding around Covid-19 certificates?

Before booking a trip to a country on the green list, British travellers must consider the entry requirements of their destinations, as well as the requirements for their arrival back in the UK.

The European Union has implemented a digital certificates system; travellers demonstrating vaccination, a recent negative PCR test or immunity from past infections are exempt from travel restrictions within the EU. If they succeed in reaching an agreement with the UK, British tourists could enjoy European trips as the continent’s restrictions are due to be lifted by the end of the month. Nevertheless, individual EU member states can still set their own rules when facing a deteriorating health situation or a new variant. For example, France and Austria recently tightened restrictions to prevent the Delta variant detected in India from spreading: a negative PCR test or a proof of vaccination is no longer sufficient to cross these borders. Over the summer, however, countries relying on tourism might not be so strict. Greece, Cyprus and Portugal are already open to British tourists, with Spain due to follow.

When it comes to crossing the Atlantic, the G7 summit taking place in London this month might answer that question. Boris Johnson will attempt to negotiate a quarantine-free air corridor with the US aiming at exempting vaccinated Americans from self-isolating upon arrival in the UK, in the hope of a reciprocal agreement for British citizens flying to the US. If he is successful, the current restrictions would be lifted in early July, allowing both British and American citizens to travel. However, the US administration has proven to be reluctant to lift the travel ban, arguing that prioritizing countries with a successful vaccination programme would send the wrong message to developing countries benefitting from the Covax scheme.

Holidaymakers must therefore remember that for travel to be possible, a reciprocal agreement between countries has to be reached. While Australia is on the UK’s green list, for example, limitations in place by the Australian government still prevents British nationals from landing on their territory. Furthermore, travel regulations are highlighting broader political motivations: the United Kingdom had to consider different variables, not least its hoped-for bilateral trade agreement, before placing India on the red list.

A digital and sustainable model of tourism ahead?

Electronic Covid passports along the lines of those currently operating in the EU might be the first illustration of a more digital model of tourism. As a result of Brexit, summer 2021 will be the last time that EU citizens will be able to travel to the UK with their identity cards (rather than their passports). Priti Patel confirmed that the new requirements would take effect from October onwards.

She also plans to introduce an Electronic Travel Authorization system, similar to the ESTA in the US. Also being considered by the EU, the ETA would see all visitors without a visa or immigration status charged a fee, and would be in place from 2025. As yet, the government has not given an indication of how much the system will cost each visitor.

A longer-term impact?

Ongoing restrictions and changeable regulatory requirements may mean that the travel industry does not recover to anything like 2019 levels of activity much before 2023, so pressures on the traditional approaches to mass-market tourism will remain even when the immediate trauma of the pandemic recedes. This may compound longer term trends of heightened environmental awareness about both the impact of air travel, and the impact of large numbers of visitors in potentially sensitive ecological areas.

Business travel will inevitably change as well, with virtual conferences becoming much more commonplace and, where necessary, longer trips blending work and leisure activities seen as the norm. Investors will want to pay close attention to such developments in order to stay ahead of what promises to be a rapidly evolving picture.

 

 

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What can we expect from the Transport Decarbonisation Plan?

The responsible Minister, Rachel Maclean MP, recently said the Plan will put transport on a path to delivering its contributions to carbon budgets and net zero by 2050. Expected to be published in the Spring, not only will it take a “holistic and cross-modal approach” to decarbonising the entire transport system, but it will also set out a “credible and ambitious” pathway to cut emissions.

Below we look at some of the main themes and challenges it will need to address.

Innovation and technology

As a core pillar of the UK’s Industrial Strategy, innovation is key to decarbonising transport. This is already happening; from large scale electric vehicle infrastructure funding and roll out, to the UK’s first Battery Industrialisation Centre as part of the Faraday Battery Challenge. As such, the Plan is likely to include continued funding and participation in these types of initiatives to ensure progress towards net zero is maintained. Covid-19 has meant many major investments in research, technology and development have stalled. This cannot persist if transport is to be decarbonised and so the Plan is set to offer incentives that will stimulate private investment.

Making the UK a hub for green transport technology and innovation is a strategic priority for the Department for Transport (DfT) and, arguably, the most important for full-scale decarbonisation. Covid-19 has seen the emergence of new forms of mobility solutions like e-scooters, for example, now in the process of being legalised on roads for the first time in the UK. However, questions remain over the extent to which they can fit seamlessly into an already well-established transport eco-system. For example, the evidence on the extent to which e-scooters are encouraging genuine modal shift is patchy, as is the argument they offer reduced emissions given their poor green manufacturing credentials, according to a recent study by North Carolina State University. These are exacerbated when e-scooters are vandalised or destroyed because of leaving them undocked on pavements.

Supporting the shift to electric

Other technologies like electric vehicles and their charging infrastructure are expected to feature heavily in the Plan. To date, roll out of this infrastructure has been patchy and either regionally or locally led, with the levels of success varying considerably. The Plan will need to set out much more strategically how increased roll out will happen, with strong leadership from the DfT to ensure there is sufficient provision ahead of expected demand.

Last year saw the ban on the sale of new petrol and diesel vehicles brought forward from 2040 to 2030, and potentially even sooner according to Grant Shapps. However, the timing of the ban is not as important as the context in which it has been set. Affordability of electric vehicles and availability of its infrastructure is still a major issue. Recent funding commitments have helped businesses with the cost of installing rapid EV charging points and given consumers the confidence they need to purchase one. For example, the Rapid Charging Fund and the recently announced additional £20m for on-street charging.

However, there is pressure on the government to go further and faster and so it is likely the Plan will set out more details on how the EV charging money announced to date is to be spent exactly. Similarly, the Plan might also include new subsidies to help make EVs more affordable. In any case, ensuring consumers have a genuine choice is paramount and will necessarily involve making EVs a practical alternative to internal combustion engine vehicles through ease of use and cost. The new DfT consultation on the consumer experience at public EV charge points and the recent CMA market study in to the EV charging sector is a good indicator of how much the government is prioritising this area.

Reducing emission through modal-shift

The Plan is also likely to include a focus on changing people’s travel habits, reducing their overall miles travelled in privately-owned vehicles, for example, which emit more emissions than public transport or micro-mobility solutions. We can therefore expect a doubling down on active travel ambitions through the creation of even more safe cycling and walking infrastructure.

Public transport

Active travel will not decarbonise transport on its own. Beyond this, there will still be ambitions for a modal-shift back towards public transport. This must be affordable, accessible, and reliable, which, often, is not the case outside of London. The Plan will need to bring forward policy and fiscal measures to restore public confidence in public transport, alongside actively promoting and incentivising more sustainable forms of transport.

For example, in rail, the continued use of diesel train fleets has meant the network is losing its edge as a green mode of transport. To decarbonise the rail network by 2040, diesel trains must be removed to make way for new, innovative, zero-emissions fuel/propulsion systems. Network Rail’s interim plans propose significant expansion of overhead electrification of the rail network from 38% today to 90% by 2050. But this is yet to be formally backed and adopted by Ministers and would come with significant cost attached. There is likely to be an important role for alternative technologies such as hydrogen and battery electric trains. However, with the industry currently in flux, undergoing structural changes in light of Covid-19 and in anticipation of the Williams Review, industry will be keen to see a clear plan that provides certainty and incentivises innovation.

Existing electrification programmes should be expedited, and more support given to the introduction of zero-emission technology such as hydrogen fuel cell trains and battery electric trains to stimulate the market for alternatives to diesel trains and make the UK a leading manufacturer, particularly now we have left the EU.

As the Minister says, the Plan will be holistic and cross-modal, meaning its scope will likely be vast. The Plan will lay down a marker and signal only the start of the transport decarbonisation process, not the end.

As such, though the window of opportunity to influence the Plan itself is fast running out, there will be several other opportunities to influence its implementation through additional consultations or working groups that are set up.

WA is in a unique position to help organisations make sense of the Plan and make their case to government for proposals that help accelerate transport decarbonisation. For further information or to arrange a call, please contact:

Marc Woolfson, Partner and Head of Public Affairs: MarcWoolfson@wacomms.co.uk.

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Innovating out of the crisis: What next for transport?

WA was joined by experts from across the transport industry this week to discuss the government’s response to the crisis so far and how, together, the transport sector can help accelerate a recovery fit for the future through innovation.

Panellists included Professor Phil Blythe, Chief Scientific Adviser to the Department for Transport, Emily James, Head of Public Affairs at Abellio Group, and Peter Stephens, UK Head of External and Government Affairs at Nissan.

Below we summarise the key themes that were discussed, including: the key drivers of innovation; those areas where more innovation is needed; and questions over how active or interventionist the government should be.

1. Decarbonisation is the key to unlocking a transport recovery fit for the future.

The single biggest driver of innovation is decarbonisation. Key to this is the Department for Transport’s Decarbonisation Strategy, which will be published in the first quarter of next year.

The first and most obvious port of call when discussing how to decarbonise the transport industry is the need to change the propulsion systems and fuel in our vehicles. Much has been said about the role that hydrogen must play in this, for example on the rail network in our trains, and the work being done by the Hydrogen Advisory Council, chaired by the Business Secretary. Though alternative fuels are being discussed, such as battery-electric technology, none are getting the attention hydrogen is. Hydrogen is the more politically appealing option according to Professor Blythe given the number of jobs it can generate, like the new Hydrogen Hub in Teesside, for example, and the fact much of it can be produced organically in the UK.

Another key mechanism through which the government can achieve decarbonisation is a reformed tax system, in Peter’s view. This will ultimately have to be the case, given the burning platform fuel duty now finds itself on alongside people increasingly switching to electric vehicles ahead of the 2030 target set by the government. What this new tax system looks like is unclear, but whether it’s some form of road/mileage pricing, in any case, Covid-19 has presented a big opportunity to reform the current way of taxing vehicles to be more effective in driving the right behavioural choices.

Area for improvement: ‘desilofication’

Despite the attractiveness of these new technologies/fuels, their success depends in large part on the extent to which they are understood in the context of the wider transport system. As Professor Blythe alluded to, energy systems need to be fully understood and done so alongside further developing innovative transport technologies.

The recent Energy White Paper, for example, may not appear too relevant to transport, but the scale of change required to electrify the rail network, provide national charging infrastructure for electric vehicles, or introduce significant numbers of hydrogen trains or buses will require fundamental changes to our energy generation and distribution sectors. The two cannot and must not be dealt with in siloes, as to do so would only slow down decarbonisation of the transport sector, according to Professor Blythe.

The same is also true of data. The government and industry cannot make informed decisions about how to join up transport modes more if it does not have visibility on key data, as this underpins everything, from an improved consumer experience to safer vehicles. As is the case currently, local authorities hold onto much of this data but are not making the most of it. The government must do more to make this available to third parties in as safe a way as possible to ensure its benefits are being tapped into.

The government’s role in providing the necessary leadership and industry guidance is huge if decarbonisation is to happen. Although full-scale government intervention is sometimes needed, especially when a market fails, Peter believed it more appropriate for the government to be more activist in its realising net-zero by 2050. We’ve been on this ‘decarbonisation journey’ for a long time now and the government must use everything it has at its disposal, including the plethora of alternative technologies and fuels available and the industry at large, to accelerate the journey further still.

2. Consumers no longer want what they used to want

Consumer expectations have changed dramatically throughout Covid-19. Increased working from home, a shift away from shared mobility and physical retail have all impacted our travel requirements and what we deem to be appropriate for our situations.

For example, Emily explained how Abellio is now looking to the future needs of its passengers, having first prioritised passenger and staff safety through more intense cleaning regimes, for example. Rail timetables have changed several times throughout this period whereas, historically, this only happened twice a year. The need to react quickly and be more flexible in approach is therefore critical to meeting these new consumer requirements.

Beyond this, no travel operator wants to have to rely on public subsidies to remain operational, she explained. Though there is an immediate need for it in the rail sector, for example, what is important is that travel operators can entice passengers back to public transport by offering the right products. For example, flexible ticketing reflecting the fact that not everyone will be commuting every day.

Room for improvement: redesigned consumer offer

The upcoming response to the Williams Review is a huge opportunity for this kind of innovative thinking to be applied, focusing first and foremost on new consumer requirements as opposed to anything else.

For the transport industry to adapt and, ultimately, survive, travel operators must invest time in fully understanding these new consumer requirements. Operators must take consumers with them in developing these new products, not only to ensure what they offer is cost-effective for the consumer, but as a way of reconnecting the public with public transport and its role in a more environmentally friendly and joined-up transport system.

3. Increased societal demand for change

Overall, consumers want to help with the government’s decarbonisation and build back better agendas according to our panel. Whether it is assisting with the transition to electric vehicles or the shift back to public transport, there is a renewed sense of societal obligation to help, something we saw lots of during the height of the lockdown. However, that is not to say there will not be trade-offs to be made. The public has had a taste of a better way of travelling which they will no doubt want to keep, such as repurposed road space or exciting new micro-mobility options.

Where possible, this needs to be harnessed and capitalised upon as soon as possible. To do this, a renaissance in transport is needed. For example, public transport needs to become the transport of choice again which will require a more relevant consumer offer. In doing so, we can start to lock down the opportunities that innovations present to us in achieving decarbonisation.

Room for improvement: clarity of message

The demand for change is there but the government must be clear to the public and industry about exactly what it wants to achieve when building back a sustainable transport system fit for the future, and their role within this.

Conclusion

The weeks and months to come will be significant for the transport industry. The need to showcase innovation, not only to adapt to these new consumer requirements but prove to government you have something to offer, will only increase.

WA is well placed to help companies engage with the various consultations and policy initiatives coming down the line and would be happy to discuss what this might look like in practice.

Contact: Marc Woolfson, Head of Public Affairs – marcwoolfson@wacomms.co.uk

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The government’s roadmap to transport decarbonisation: What can industry expect?

Covid 19 has had a dramatic impact on how we have been able to travel in recent months. All forms of transport fell dramatically in the first lockdown and the ‘new normal’ is posing major challenges to the traditional model of public transport in particular.

However, the longer-term transport challenge for government remains decarbonisation. Significant questions remain unanswered, namely, how it will achieve full scale decarbonisation across every area of the transport network and by when.

The next few months are expected to see several set piece policy initiatives emerge from government, intended to answer these questions. We have looked at what industry can expect and the implications for engagement with government.

Transport Decarbonisation Strategy

When is it due?

Officials are hopeful this will be published by the end of this year but there is potential for it to slip to early 2021.

Issues and implications for transport

Billed as the Department for Transport’s roadmap for how to decarbonise the transport sector. It will look across all modes of transport and set out the government’s strategic priorities. Decarbonisation of rail and road, being the easiest to act upon, will be a major focus of the Strategy.

On Rail, much of the groundwork has been done by Network Rail’s recent Traction Decarbonisation Network Strategy (TDNS). This details that much of the rail network will need to be electrified, with new low carbon rolling stock being vital for some lines. The Strategy concludes that over 11,000 standard track kilometres of electrification will be needed, supplemented by a significant role for zero carbon traction, including hydrogen and battery technology.

This area is seen as in the ‘easier’ category by DfT officials and it is likely that the DfT Strategy will be closely aligned with Network Rail’s recommendations. However, there is likely to be more work to do scoping out how to implement these changes under the new Emergency Recovery Measure Agreements and whatever follows them.

In the more challenging category is driving the transition to electric vehicles. In response to the Committee for Climate Change’s call for the government to bring forward a ban on petrol and diesel vehicles to 2032, the government said it recognised “the need to go further than the existing regulatory regime” and is considering more stringent measures in the Transport Decarbonisation Strategy.

Specifically, the government is understood to be considering a new ‘zero-emission mandate’ scheme which will see manufacturers forced to sell their models even if demand is lower than other fuel types. Briefings to the media have implied that this would reduce the need for fiscal incentives to encourage such purchases. If that is the case, it would indicate the government is minded to reach for the stick rather than the carrot. However, this risks alienating parts of the industry that they will need to take along with them in order to meet such ambitious timelines, especially if they accelerate the target date to 2030.

The other part of the picture for electric vehicles is how to fast-track the deployment of a national charging infrastructure ahead of consumer demand. Again, government will need industry onside to supply the necessary infrastructure ahead of its inevitable demand. However, charging operators will also need a clear steer from government to provide an environment in which to invest.

National Infrastructure Strategy

When?

The Chancellor has said it will be published this autumn.

Issues and implications for transport

Major infrastructure projects can provide a significant boost for jobs and economic growth and this strategy will now therefore be viewed through the lens of recovery. It will also have a major focus on decarbonisation.

While the National Infrastructure Strategy will have a broader focus than just transport, it will be a good yardstick of how joined up the government’s approach is by how well it aligns with and facilitates what will be included in the DfT’s own Decarbonisation Strategy. Most likely it will simply echo what the various parts of government are doing but in order to make progress, more will be required. On rail decarbonisation for example, significant investment will be required. The big question is whether the National Infrastructure Strategy can be a vehicle to confirm this investment or not.

This question has only become sharper with the news that the Spending Review will now only cover one year. The caveat that multi-year settlements will be given to some ‘priority’ infrastructure projects will leave several sectors waiting to see if their programmes fall into that category.

Energy White Paper

When is it due?

Currently due to be published at the end of this month but further delay is likely.

Issues and implications for transport

The Energy White Paper may not appear too relevant to transport policy at first glance, but the scale of change required to electrify the rail network, provide national charging infrastructure for electric vehicles or introduce significant numbers of hydrogen trains or buses will require fundamental changes to our energy generation and distribution sectors.

The White Paper itself is likely to support a wide range of different technologies as opposed to prioritising one over another. This has implications for transport because, while the government may not want to close down its options, sectors that need to introduce major changes will need a steer that the government is actively backing them. The introduction of hydrogen trains on the scale envisaged by Network Rail for instance would require the introduction of a new hydrogen generation and distribution industry. This is only possible with clear government backing.

Again, the challenge is the extent to which the Treasury feels able to make significant commitments as this time of great economic uncertainty and how detailed the White Paper is in setting out next steps.

What this all means for the transport sector and what you should do about it

 

 

 

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Webinar – Innovating out of the crisis: What next for transport?

On Monday 30th November 2020, WA brought together a panel of transport experts to examine how industry is adapting to meet the challenge of Covid-19.

We explored the role of government in driving innovation to secure better consumer outcomes, restoring passenger confidence, advancing the net zero agenda and implementing new business models in a world learning to live alongside Covid-19.

Chaired by Marc Woolfson, WA’s Public Affairs Director, we were joined by Professor Phil Blythe CEng FIET, the Department for Transport’s Chief Scientific Adviser and Professor of Intelligent Transport Systems (ITS) at Newcastle University.

We also be heard from industry leaders who each brought a unique perspective on the changing environment we all face:

• Emily James, Head of Public Affairs, Abellio Group; and
• Peter Stephens, Head of External and Government Affairs, Nissan

The discussion included a question and answer session with the audience.

 

 

 

Watch a recording of the webinar:

 

 

 

 

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Navigating the new normal for transport in a Covid-19 world

“The fundamentals of travel are not going to change in the sense that people will begin to return to work, things will slowly return to normal. What will change is what this ‘normal’ looks like”, Robert Largan MP, member of the Transport Select Committee remarked in his opening statement for our recent webinar ‘Navigating the new normal for transport in a Covid-19 world’.

Alongside Robert Largan MP, our webinar heard from a panel of industry practitioners who contributed their unique perspectives on what the changing landscape for transport might look like, including:

A flavour of the most interesting points arising from the discussion is captured in brief below, but if you would like to watch the Webinar in full you can register for the link below, or to speak with us about any of the points raised, please do get in touch.

 

Impact of Covid-19 on public and active transport: accelerating change

 

The crisis has brought into sharper focus a number of challenges that were already facing the UK’s transport system and thrown plenty more into the mix.

Covid-19 has hit the railway hard. Social distancing measures mean many parts of the public transport system will be limited to 15-20 per cent of normal capacity for some time, forcing the introduction of Emergency Measures Agreements (EMAs) in place of existing franchise arrangements. This sits against the backdrop of the Williams review with major reform already on the cards. The government may now have the option of simply evolving the EMAs into whatever arrangements follow Williams, possibly having to take on additional revenue risks. Williams has understandably been delayed but is still expected to land later this year and reforms to the railway will now need to factor in that travel patterns may have changed for good. For example, there will be debate over the extent to which government should now focus on punctuality rather than capacity given the reduced number of passengers.

There is a more positive story for cycling with Covid-19, reinforcing the importance of active travel. It has proven that active travel is both desirable and favourable, and when people feel safe – in the infrastructure, equipment and confidence – to cycle, they will do so. In fact, it is fair to say that cycling became the nation’s default transport mode in the height of this crisis. The key question remains of how to embed these positive changes on a permanent basis. Government’s active signposting towards the Cycle to Work scheme has highlighted the importance of promoting more active travel. The industry is now calling for more infrastructure to go alongside this demand-side policy measure, including more dedicated road space for cycling.

In both areas, the current crisis has had major short-term impacts but has also underlined the case for change in the medium term.

 

Mode-integration and data sharing: digital connectivity is key

 

The UK is not very good at using data, and a more joined-up travel system is essential to the levelling up agenda which remains important.

The transport data that we have available could and should be used more successfully in order to ensure we develop a more connected and integrated system, incorporating more active travel and greater cycling and walking infrastructure. We can also put it to better use via traffic management, for example, or through the development of better and even more integrated mobility as a service platform. It’s now not hard to imagine a world where real-time data allows the public to plan journeys with far more information at their fingertips; from traffic flow and congestion information to the availability of electric car charging points or the location of the nearest e-scooter or bike available from sharing schemes.

Clearly for this vision to become a reality there is much to do. The integration of electric vehicle charging hubs into a multi-modal model will be key, as will the development of the necessary digital infrastructure that can facilitate the necessary exchange of data. The rollout of full-fibre broadband is important not just for connecting individual homes and businesses, it also provides vital backhaul for the development of 5G connectivity and will enable the development of smart transport networks.

 

The role of local government: the benefits of devolution

 

The panel were unanimous in the view that more devolution is generally positive for transport.

The complexity of the challenge facing the industry means there is not going to be any one size fits all approach. The role of metro mayors will be important as they can create local transport solutions that work for their area but they can also learn from each other and encourage greater innovation by trialling different approaches in different areas. One point it will be important to remember however is the need for cooperation across different regions. There are many who will commute into the cities run by metro mayors but live outside its boundaries and they must not be forgotten.

We learned that in the coming months, the Transport Select Committee will be taking evidence from metro mayors about how they handled public transport throughout the crisis and their plans for the future of transport.

 

Looking to the future: Beyond Covid-19

 

The overall feeling of the panel was that we shouldn’t simply return back to the status quo. Covid-19, whilst causing major disruption, has given us an opportunity to do things differently, and any recovery package needs to cement this change. There was an emphasis on the need for a ‘green recovery’ which promotes cleaner, greener, more sustainable transport at its heart.

Whatever the Covid-19 recovery looks like, what is certain is that it is going to come up against Brexit, the US/UK trade talks and many other factors that will have an impact on the security and future of the transport sector as a whole and the automotive sector in particular. This will have an impact in terms of talent, data, research and development and production.

The industry is coming up against multiple challenges on all fronts, it needs to be prepared and ready to embrace the changes coming.

 

 

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Are we still in the midst of an electric vehicle revolution?

The government’s 2035 ban on petrol, diesel and hybrid vehicles is under threat in the wake of COVID-19. With strong political and societal forces now in play, the government and industry face difficult decisions.

The risk is two-fold; the government may concede to pressure from some parts of a troubled automotive industry by relaxing its 2035 target; or a simple lack of policy action will make it far harder to meet the target in reality, even if government sticks by it on paper. The inevitable hampering of supply and demand will also make it harder.

Either way, industry will need to make a compelling case to government if it wants electric vehicles to remain a genuine priority policy area.

The government, meanwhile, needs to adapt its electric vehicle strategy in a way that reflects the new reality and has an opportunity to frame this as a key pillar of a green, economic recovery agenda.

 

COVID-19 changes everything

 

The world has fundamentally changed in the last two months.

For electric vehicles, supply is now a huge issue in Europe. Delays in global vehicle production is now likely as sourcing batteries and parts is very hard to do outside China without incurring much higher costs, especially considering China has far more lithium reserves and much greater lithium production than any other country.

Fiat has already implemented temporary closures at some of its Italian plants with others likely to follow, with the risk of a longer-term reduction in production capacity resulting from plant closures or delayed investment. In the UK, the likes of Nissan has today said it will begin building cars again in June having suspended production six weeks ago.

Even more significant, however, are the societal and economic changes arising from COVID-19, some of which serve to reinforce the case for electric vehicles whilst others hinder it. For example, the links being made between COVID-19 deaths and air pollution could increase the demand for cleaner and greener vehicles. A recent RSA survey found that over half of respondents had seen an improvement in air quality since travel restrictions were enforced.

Big questions are also emerging over the future of public transport. Auto Trader found 48 per cent of consumers were less likely to use public transport after the lockdown. Though this could lead to a rise in demand for electric vehicles in the longer term, equally, in the short term it could push people into buying dirtier (and now cheaper considering falling oil prices), CO2-emitting vehicles, or micro mobility solutions such as bikes or scooters. The former could potentially hinder the take up of electric vehicles, as could the latter as people look to replace shorter journeys with walking or cycling, thereby missing the window of opportunity to promote EVs as the natural solution.

 

Electric is still the answer

 

One fact remains clear; the drive to zero carbon and the increasing evidence of the harmful impact of air pollution mean electric vehicles remain an important long-term strategic play for the automotive industry, alongside hydrogen and other biofuels.

Yet take-up in the UK remains extremely low. March saw the number of new battery-electric vehicle (BEV) registrations number 11,694. That’s 4.6 per cent of a UK total market that was down 44.4 per cent. These numbers have been quickly dismissed by experts as distortions to what’s really going on. Yes, sales of electric vehicles are rising, but nowhere near as fast as March’s figures suggest. So, if March is just an anomaly then a more important question is what government should do to increase supply and demand of electric vehicles in both the short and long-term.

In the short term, despite extending its consultation deadline (from the 29th May to the 31st July) on bringing forward the ban on sales of new petrol and diesel vehicles, the transition to electric vehicles remains a key strategic pillar of the green agenda for government and the automotive industry. Government grants (including extending the plug-in car grant at the last Budget) and tax incentives have no doubt helped create the beginnings of an electric vehicle market in the UK but for manufacturers, another big driver of supplying these cars in the first place is the EU’s strict requirements when it comes to carbon dioxide emissions.

For consumers, they need the confidence now more than ever that they can buy an electric vehicle at a reasonable price. They also need to know they will have enough charge points along their route and that when charging their vehicle, the experience will be as quick and affordable as possible.

Existing commitments include ensuring every person in England and Wales is within 30 miles of a charging point; investing an extra £500m on a fast-charging network; and boosting funding for high-tech research by £9bn over the next five years. These will be important in giving consumers the confidence they need. However, government must implement these policies immediately, or at the very least accelerate them through releasing funds over a shorter 3-year period.

Furthermore, as provided for in the Automated and Electric Vehicle Act (2018), government also has at its disposal the powers to be more prescriptive with what it requires from charging providers in connection with standardisation across provider payment methods. Making use of these powers could provide a more seamless consumer experience, helping drive confidence, greater uptake of electric vehicles and, ultimately, help provide some much-needed economic stimulus.

 

The (green) road to recovery

In the longer-term, the government’s attention will turn to driving economic recovery.

One approach to this could be to double down on its climate change commitments as part of a ‘Green Recovery’ agenda, similar to Labour’s “Green New Deal” which would have seen a state-led investment programme to reduce greenhouse gas emissions in as fair a way as possible.

The policy thinking to support such an approach is already emerging; the International Renewable Energy Agency recently found that accelerating investment in renewable energy could generate global GDP gains of almost £80tn between now and 2050.

Electric vehicles would obviously need to be a key pillar of such an approach.

A green recovery agenda that prioritises the clean energy transition with a specific emphasis on its electric vehicle plans, could drive significant investment required to spark an economic recovery. Conversely, failure to prioritise these issues will be a major missed opportunity.

 

Industry’s role

COVID-19 has presented the government with a significant window of opportunity to pursue a clean energy system that aligns economic stimulus and policies with environmental goals.

However, there’s no guarantee this will happen.

So, for those with a vested interest in the development and take up of electric vehicles, getting out early and making the case for a green recovery will be crucial for realising the electric vehicle revolution.

We may not be in the midst of a revolution right this second, but with a little bit of refocusing from government and constructive engagement with industry about what needs to happen and how, we can soon be on our way.

 

 

 

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Does the Flybe bailout make electoral sense for the Government?

Flybe

The Government has announced a rescue package for Flybe, the UK and Europe’s largest regional airline. It’s an early example of the government ‘levelling up’ the UK regions with London and the South East.

WA Communications takes a look at how the decision actually makes electoral sense for the Conservatives, focusing on the West Midlands.

 

Flybe administration Update March 2020:

 

Flybe has now collapsed, after a request for financial support was turned down by its investors led by Virgin Atlantic. EY have been appointed as administrators of the airline, putting up to 2,000 jobs at risk. The government had said that is was unable to provide support until after the transition period due to restrictions posed on state aid for EU members.

Unfortunately with mounting financial troubles exacerbated by coronavirus, waiting until the end of the year has proved too much for Flybe.

The government has pledged to help Flybe’s employees find new work, but there will be no relief fore the thousands of customers who had flights booked with the company or who rely on it to travel. The government has said that it wants to work with other airlines to see if some of the coverage offered by Flybe can be replaced, but with routes that most major airlines have deemed too unprofitable to operate, it is unlikely that anyone will be racing to fill the lost capacity.

 

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Accelerating decarbonisation of the transport sector: Labour at the 2019 general election

May 2006 seems an awful long time ago. Pluto was still a planet, Twitter was two months old and Jeremy Corbyn was still a backbencher. It was also the month Al Gore’s An Inconvenient Truth planted the issue of climate change firmly into the minds of millions around the world as potentially THE single biggest crisis facing mankind.

Thirteen years later, it has finally entered the minds of politicians as they race to see who can achieve “net-zero” – with the pace of change a key battleground. How they plan on doing this and if what they have set out will work, is up for debate.

It is not just individual policy announcements which are indicative of the new approach. The last few months have seen a fundamental shift in the narrative of policymaking which is informing Labour’s transport plans. Though previous campaigns have included bold pledges on the environment, 2019 has seen Labour weave the fight against climate change into every facet of its policymaking and budgeting. Nowhere is this more noticeable than in transport.

However, the question remains (beyond Labour’s chances of being able to implement these policies) whether industry will allow a radical push towards zero carbon in such a short period of time. While many within the Labour Party are convinced of the immediacy of the problem, they may well find the intransigence of the sector represents an insurmountable barrier. With so many competing policy programmes, industry will need to play a leading role – and Labour will need to manage these relationships carefully.

At Labour conference members voted to commit to net zero carbon by 2030 if it wins the election (though not officially endorsed by the leadership) – 20 years before the government’s ambition. Key to realising this ambition for Labour is the decarbonisation of the transport sector. With meeting its own carbon targets being such a mammoth task, do Labour’s transport decarbonisation plans go far enough?

Transport is the single biggest contributor to the UK’s climate impact, overtaking energy supplies in 2018 by contributing 26 per cent of emissions. The primary source of this pollution is petrol and diesel cars, an area Labour is focusing on to achieve net zero. Already this year, Labour has pledged £3.6 billion to expand the UK’s electric vehicle charging networks, interest free loans to help purchase electric vehicles, and support for community car-sharing based on electric vehicles. Such ambitious investment in ultra-low emission vehicles would mark a significant departure from the piecemeal efforts of previous governments.

However, it is not as simple as decreeing there will now be a first class EV infrastructure. There are a number of barriers Labour will be forced to contend with, from managing electrical supply and interoperability to ensuring consumer demand and combating range anxiety. That is to say, bold promises in opposition are likely to run into the same problems preventing current governments from increasing the uptake of EVs.

Labour’s transport decarbonisation plans don’t end on the road. The railway network is also a big focus. In adopting the ‘Green New Deal’ at conference, Labour committed to backing ambitious rail electrification, and measures to increase sustainably powered rail freight. Once again though there are problems, not least of which is the huge cost associated with electrification. Push back from the industry, especially at a time of potential nationalisation, will also complicate matters.

Labour hasn’t made an announcement on aviation – yet. Shadow Chancellor John McDonnell has floated the possibility of cancelling Heathrow expansion, citing the increased carbon emissions – convenient for an MP whose constituency includes the airport. Policies to curb private jet use have also been mooted, and there is the potential to include aviation in net zero targets.

Yet, aviation still poses a challenge to Labour; while increasing taxes on aviation will please the green lobby, it will likely result in higher air fares – pricing out those lower down the socioeconomic scale whom the Party proposes to help. Balancing environmental commitments with social justice is a major challenge facing Labour.

But are Labour’s plans for transport exactly the shift required to avert imminent climate disaster, or a programme too radical to the very sector whose support it needs? And how do these plans help or hinder Labour’s other policy priorities?

To answer these questions, and many more, WA is hosting a roundtable on Labour’s transport agenda at the 2019 general election, featuring Alan Simpson (Adviser on Sustainable Economics to Shadow Chancellor, John McDonnell MP) and Dr Richard Carmichael (author of the Committee for Climate Change’s recent report: Behaviour change, public engagement and Net Zero). Limited places are still available, so if you are interested please RSVP to Nathalie Dixon-Young at nathaliedixon-young@wacomms.co.uk.

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Getting under the bonnet of vehicle connectivity

The car has evolved significantly over the last century. The driving experience, however, has largely remained the same. But this is changing. Most headlines to date have focused on driverless cars in the context of future mobility. Unsurprising really, but more interesting is not who might be driving cars in the future, but what’s currently happening under our bonnets.

Nowadays, being disconnected from the world is alien to most of us because we now see connectivity as a need rather than a luxury. Vehicle connectivity is central to this behavioural shift and already driving a huge number of innovations that will transform all our travel experiences.

It’s not about getting from A to B anymore but doing so in a way that facilitates our accessing a host of new experiences and connectivity features within our cars. In-car safety (e.g. integrated cameras, self-braking), vehicle to vehicle safety that allows cars to effectively talk to one another helping to prevent accidents, data tracking to record vehicle usage, infotainment that connects us to things like Spotify and, of course, 4G WIFI hotspots, are all in high consumer demand.

Interest from original equipment manufacturers (OEMs), government and third-parties will also increase this year. Eager to harness its potential whilst also overcoming its many challenges, questions remain as to whether existing car manufacturers will be able to keep hold of their vehicles’ data. It’s likely irresistible pressure to provide access to third parties, both to create new types of services but new revenue streams too, will soon prevail.

The amount of data a vehicle generates is set to explode but monetising this huge increase in operational data is easier said than done for OEMs who have historically fallen behind market disruptors. There are also questions about whether consumers want to see an increase in vehicle connectivity. Though considered highly beneficial in countries like China, it isn’t in countries like Germany, for example. Consumers’ willingness to pay for connected data services will surely also come into question as let’s face it, we’ve all come to expect basic services and apps for free.

OEMs’ potential to realise benefits from being in control of a vehicle’s data is enormous. This can range from knowing which parts of a vehicle are likely to fail and when, real-time data that’s sent from vehicle sensors to identify problems early or knowing a customer’s driving behaviour that helps design better, more customized customer experiences, ultimately improving brand affinity and loyalty.

However, not every automaker is well positioned to succeed at every stage of the connected vehicle value chain. As a result, though in possession of a vehicle’s data, they are reluctant to give this up as, understandably, want to control every point in the value chain. For years, many OEMs have attempted to build the entire mobility data ecosystem themselves, but only by partnering with outside organisations can the monetisation of vehicle data develop to its full potential.

Many OEMs have also failed to hide their collective vulnerability to market disruptors looking for ways to bypass them. For instance, for user-based insurance, the addition of a simple plug-in allows insurance companies to gain access to vehicle usage data which means being able to avoid the need to interface with OEMs.

There’s also a question of data protection. Generally, consumers are more willing to share their data for services or features that have a perceived benefit, but trust would be lost if the data OEMs share is compromised in any way. Keeping this trust and brand loyalty whilst also trying to use customers’ data to create better and more personalised experiences for them will be a huge challenge.

Similarly, who owns a vehicle’s data and who gets to use it will also be key questions that need answering before vehicle connectivity really takes off. The most interesting data sets are often the ones that are shared across connected ecosystems that include consumers, OEMs, and service providers. However, studies have shown consumers aren’t fully comfortable with one type of company managing their connected data. Naturally, this will help make the case for why OEMs should give up their total control over their vehicles’ data as they simply aren’t best placed to make the most of it.

Vehicle connectivity is the future and OEMs will need to capitalise on the opportunities it brings, not only for them, but for society as whole quickly. If they don’t then they risk losing out to more agile and non-traditional competitors.

And so, what’s happening under our bonnets now and in the future will create far more disruptive changes to the automotive industry and how we travel in the short-to-medium term, than any increase in cars’ ability to drive themselves.

 

 

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Driverless but not rudderless? The self-driving Department for Transport

Chris Grayling is having a rough old time of it. He has listed from bad headlines to calls for his resignation over the fluffed Brexit ferry contract, faced ire over pricier rail tickets that annually signal the end of the Christmas holidays, and had his past dragged up over the collapse of his flagship probation reforms made as Justice Secretary. And it doesn’t seem it will get any less difficult in the short or longer term. DfT is scrambling to modernise the entire transport infrastructure – in physical, political and regulatory terms – for the 21st century. This is not the easiest of challenges anyway but must be particularly irksome for a distracted department led by an embattled Secretary of State.

Perhaps a symptom of DfT’s eagerness to address questions about the future of transportation in the UK is the flurry of recent consultations from the Department. Four separate consultations have been issued over the past three weeks, with one in particular causing a particular stir: a proposed update to the DfT’s code of practice on autonomous vehicles that could see advanced tests on public roads far sooner than expected. The changes set out more clearly the mechanism by which autonomous vehicles can be trialled, strengthening the legal requirements for testing, in theory making it easier for companies to bring their prototypes to test and consequently to market.

In an area where there’s been so much chatter but little tangible progress since 2015, the government is looking to ensure the UK is the chief innovator in trials of self-driving cars. If successful it would move the UK closer to its ambition of having self-driving vehicles on UK roads by 2021, as well as send a clear message the UK was a world leader for autonomous vehicle testing.

However, this hasn’t exactly been welcomed far and wide by stakeholders. Where usually industry calls for government to keep up and to stimulate investment in innovation, this consultation has largely been met with a cry of “too much, too soon”. Industry experts have pointed out that the technology is far from ready, and the RAC has been clear that road users remain overwhelmingly uncomfortable about the prospect of interacting with driverless cars. Not least, the death of a pedestrian in Arizona during a road test in March 2018, as well as two fatalities during closed tests by Tesla, has delayed progress while serious questions, both technological and legal, are asked. More dangerous, more congested roads, on account of the need for ultra-cautious driving, is the prevailing prediction from observers should the government stay in the fast lane through this consultation. Christian Wolmar, the one-time Labour Parliamentary candidate who frequently commentates on transport issues, accused the government of “rushing forward with this technology long before it is ready”. While the SMMT has previously been positive about the impact of driverless cars, claiming they could provide “huge social, industrial and economic benefits to the UK”, it is telling it has not responded directly to this change. This can’t be the response the DfT was hoping for.

Nevertheless, the accelerated ambition from government could be seen as a grand signal to the UK and global business that Britain is the place to be for R&D and trialling. Certainly, the consultation launch was framed within the context of meeting the Industrial Strategy’s Future Mobility Grand Challenge and Ministers’ eagerness to position the UK as a world-leader in the sector. This could well be a boon to innovators in the industry, providing at the very least a pathway to making this technology a reality. In some respects, even by setting a target it cannot meet, the government has stolen a march in embracing a technology many see as crucial to the future of mobility.

The DfT may be under pressure in numerous policy areas, and as with many government departments, may be operating with a distracted upper management. But in attempting to take a lead on autonomous vehicles it has opened the door for business to contribute to creating the transport network of the future. If it is indicative of a general willingness by the Department to embrace new technologies more broadly, the next few years could be an exciting and fruitful time for business.

The episode also provides a lesson in gesture politics. The muted response from the automotive sector to government’s trumpet call for rapid change shows Ministers that without the substance to bring industry and the public with them, there’s not always a need for speed.

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The electric vehicle infrastructure problem

As set out in the Road to Zero Strategy, the government plans to end the sale of petrol and diesel vehicles by 2040, and for all vehicles to be zero-emission by 2050. This is a significant commitment to electric vehicles and is part of the government’s wider Clean Growth Strategy.

The government anticipates that most drivers will charge their electric cars at home or at their place of work. But these options are not available to everyone; many people do not have access to off-street parking, nor does every workplace have the capacity to provide electric vehicle charging. These problems are particularly pronounced in urban areas, which suffer the most from low levels of air quality.

The government believes that if electric vehicles are to become truly mainstream, there will have to be provision for on-street vehicle charging. Delivery of this infrastructure has been left to local authorities and the private sector (with some funding available from central government), but many local authorities do not have the money or the expertise to build it and have struggled to coordinate with network companies. This has meant the electric vehicle charging network lacks size and geographic coverage.

A further issue is that increased use of electric vehicles will increase the pressure on the UK’s energy network. The National Grid is confident that new capacity, and reinforcement of the existing grid, can be brought online in time to meet any increase in demand. However, this will require significant investment in new electricity generation capacity and in ‘smart charging’ technology. The latter is particularly necessary to ease the burden on distribution networks that could be subject to local overload.

The development of infrastructure can also be encouraged from the demand side; increased demand for electric vehicles should be a catalyst for greater provision of charging infrastructure. More electric vehicles on the road provides a greater incentive for firms and local government to work together to install electric vehicle charging points. However, the government has recently decided to reduce the subsidy for electric vehicles, and tax incentives relating to the use of electric vehicles remain limited. The government believes that the price of electric vehicles will fall as battery technology improves, but a lack of demand side support is likely to constrict growth of electric vehicle ownership and charging infrastructure.

Money, knowledge and planning are issues that affect all government infrastructure projects, particularly ones that involve a significant amount of coordination between different levels of government and the private sector. However, there is a more fundamental problem that has received little attention: how to make long-term infrastructure decisions when faced with technological uncertainty? Current government policy is to end the sale of petrol and diesel cars by 2040, but this is over 20 years away. In 20, or even 10 years’ time, how we use cars and roads might have completely changed. The danger for the government is that it might be doing the equivalent of investing in CD players, with digital streaming just around the corner.

The government recently announced that it wants to have self-driving cars on UK roads by 2021. While this is an ambitious target, it signals a technological revolution that could completely alter the way we use vehicles, and therefore the infrastructure those vehicles need. Should vehicles become truly autonomous, there may be no need for individuals to even own their own car. Driverless cars could be used like taxis and charged in out-of-town charging centres when not in use. Privately owned autonomous cars could drive to charging stations when not being used, negating the need for on-street charging.

This presents a puzzle for government: should it invest billions of pounds in a charging network that may only have a useful lifespan of a decade? While this may seem like an unattractive option, the alternative may not be very palatable either. If the government adopts a ‘wait and see’ approach and does not fully commit to on-street charging in the short-medium term, there is a danger that the take-up of electric vehicles will stall. This will directly affect the UK’s ability to achieve reductions in greenhouse gas emissions and could slow the growth of an important emerging industry in the UK.

The government is in an unenviable position. It will need to invest in on-street charging technology to keep to its promises on climate change, and to stick to its Industrial Strategy aims. But, thanks to rapid technological change, it may only be able to reap limited rewards from this investment. This dilemma tells us something about the role the state can play during periods of technological uncertainty. If private actors are unwilling to invest in a new technology due to concerns over its long-term profitability, investment from the state may be necessary to bridge the gap and allow greater gains to be realised in the future. This investment may only provide short-term or limited benefits directly, but it could lay a foundation on which private sector investment can then build. On-street charging infrastructure may not be a permanent fixture on our streets, but it may be required if the electric vehicle industry is to succeed in the UK.

Rather than assessing government investment in new technological infrastructure on a case-by-case basis, we should be content with a broader view. It is almost impossible to accurately predict the path of technological development, and under such conditions there will always be wins and losses from government investment. Rather than being distracted by the noise surrounding each individual decision, we should focus on whether government investment supports innovation and growth throughout the economy.

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From chaos, comes order, but how? Looking ahead to urban mobility in 2040

Time to shift gear

The publication of the Urban Mobility Strategy was, in many ways, the final piece of the jigsaw. From future mobility being framed as a “Grand Challenge” to delivering goods more sustainably as part of “the last mile”, there’s nothing left to do but act.

If government is serious about fully realising the opportunities that urban mobility presents us, there can be no more strategies, no more consultations. Now is the time for genuine delivery.

However, exactly what and how is up for debate. Given the sheer number of competing players now active in the market, this area has become more intractable than ever. What is clear is that bringing order to this seemingly chaotic environment will require a balanced approach to regulative, legislative and political action.

Key to realising urban mobility’s potential is to look to the future, working backwards from a desired endpoint. What needs to happen with X to get to Y? Below are some of the key trends influencing urban mobility, each with a desired end point and some thoughts on how we might get there.

From X to Y, but how?

Vehicle ownership to vehicle usership

What was once a dominant behaviour or aspiration, owning a car is increasingly no longer considered necessary by a growing section of society. Though it has brought substantial benefits to society, high levels of ownership have also brought serious challenges. Take safety, for example. Human error was involved in 85 per cent of all road accidents in 2017. Air pollution, though having improved since 2010, remains a serious risk to public health. Congestion too. The time lost as a result costs the UK economy around £2 billion per year.

Vehicle usership is a key principle upon which the concept of urban mobility is based. Arguably, we’re already nearing our endpoint, but there are still things that can be done to push usership over the line as the new dominant form of transport. A shift away from ownership means regardless of age or whether someone has a disability, people are able to access the same transport. However, equally, with the rise of MaaS platforms and different types of sharing models, there’s a danger these groups of people might be excluded from the new urban mobility, especially as transport information, booking and payment functions are modelled through digital platforms.

With the requisite political will, fewer privately-owned cars will bring opportunities to radically redesign urban areas and the environmental benefits will be self-evident. New mobility models can reduce dependency on car ownership. However, closer integration of our infrastructure and vehicles with communication networks could lead to increased vulnerability to cyber-attacks. As new transport modes and services are introduced, it will be important to consider how they can be safely integrated into the transport system and vulnerable users can be protected.

Limited choice to lots of choice 

Once limited almost exclusively to cars, urban mobility in the future will be defined by a diverse range of modes, from bike sharing to autonomous transit, as well as more traditional options like rail and walking. When all these models co-exist with cars, and are connected in an urban environment, mobility options and utility can be enhanced significantly. To ensure the UK continues to foster new mobility innovations, the environment in which they would operate must be a fertile one, facilitated by a flexible and responsive regulatory system that works with cities and provides them the tools necessary to innovate. Key to this will be ensuring the regulatory review promised by government asks the right questions and involves the right parties.

Government funded transport to public-private transport

This was always inevitable and the only way in which the future of urban mobility can be realised. Key to getting to our endpoint here, however, is working together, not competing. Although the media and large parts of the public seem to be enthralled with the idea of driverless cars and flying taxis, the idea that these types of mobility models will replace government funded transportation misses the point entirely.

Public and private transportation can complement one another. Public transit hubs, for example, could offer a steady stream of customers to new mobility service providers and, in turn, they can make public transit a more attractive door-to-door experience. However, such systems must be coordinated for efficiency purposes and to reduce congestion in cities. Cities and their respective transport agencies may need to take more control over how and where services are offered to avoid areas being overburdened with new services thus causing gridlock, and to ensure access is available to all cities and groups of people.

Unconnected transportation to on-demand and connected transport

As identified in the Urban Mobility Strategy, a key principle of success is the need for “new mobility services to be designed to operate as part of an integrated transport system combining public, private and multiple modes of transport users.”

For a truly integrated system, we need a more inclusive transport system. This should be one that adopts new mobility technologies as its default position, widening the affordability, availability, and accessibility of transport and narrowing existing transport inequalities in the process.

The current regulatory and commercial barriers that have left the urban transport market fragmented must be addressed, be it as part of the regulatory review, legislation, or other means. In any case, the current environment means the barriers to entry for organisations wishing to integrate transport provision are too high and are threatening consumers with a lack of information to plan or buy integrated journeys effectively.

2040 and beyond

Of course, these are only a selection of many factors shaping the urban mobility revolution. Talking about what needs to be done to get to certain endpoints for certain elements of urban mobility’s future is easy, but how we get to a final endpoint, encompassing all these factors, is the hard part.

WA Communications will be hosting its “From chaos, comes order, but how? Looking ahead to urban mobility in 2040” event on Wednesday 24th April to try and answer this question. For more information about attending this event please contact Stephen McLoughlin at stephenmcloughlin@wacomms.eprefix.com or by calling 0203 102 3628.

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View from the Summit: hard questions and honest answers for UK rail

WA was at the Transport Times Rail Summit this week, joining industry and political leaders to talk about what’s coming down the line in 2019 and well beyond.

There were fascinating discussions about HS2, Crossrail, vast numbers of new rolling stock, regional devolution and smart ticketing that gave a real sense of ambition and exciting glimpses of new innovations that will transform passenger experiences almost in real time.

But following a horrendous 2018 for large parts of the network and many operators, it was left to the Rail Minister, Network Rail, and Keith Williams – the person tasked with a root and branch review of the UK’s rail network – to deal with the big-ticket questions of performance and trust that overshadow improvements and swell support for more radical reform (as supported by the Labour Party’s leadership), that could pose more existential challenges for the industry if enacted.

The political context is febrile. There is a Conservative government no longer willing to defend the rail industry based on its private sector instincts alone, and a Labour opposition with a clear plan to take franchises back into public ownership at the point of expiry.

The contributions from the Summit’s leading voices were strikingly honest and thought-provoking.

We know now that Keith Williams is half way through his rail review. He has spoken to over 130 groups and received over 200 submissions from operators, regulators and passenger groups. The basic task set to him by the Department for Transport in late 2018 was to examine, outside of HS2 and Crossrail, what we do with the railways in the next century?

Among his long list of considerations includes the relationship between train and railway operators, accountability, industrial relations and skills, and how to ensure the innovative and fair use of railway data, sits the question of affordability.

This doesn’t just mean addressing high ticket prices for passengers. Half the UK’s entire transport budget goes on the railways, yet rail journeys account for only two per cent of all transport movements. Can this be justified and sustained going forward? Perhaps part of the answer lies through sharing the responsibility for more of the infrastructural parts of the railway, but it wasn’t clear how deeply the review will delve into this issue. In fact, Williams didn’t give an inch on what was going into his final report but he did emphasise his appreciation of industry’s passion for delivery, absolute focus on safety, and recognition of huge investment. It felt like an early commendation.

The Rail Minister, Andrew Jones MP, who seemed genuinely delighted to be back in the job, expressed the view that industry could make the case for that level of investment through the simple metric of “bums on seats”. Increasing demand, he cheerfully stressed, showed the system was working, strengthening passenger confidence as well as UK manufacturing and those all-important post-Brexit supply chains. Jones’ mood only appeared to chill when it was time for him to leave the Summit and return to the Commons for more Brexit votes.

Network Rail’s Chief Executive, Andrew Haines, gave a startlingly candid appraisal of his organisation and the wider industry’s shortcomings and future challenges. He admitted that franchise specifications were set up to encourage bidders to “promise the Earth” beyond the realms of realistic delivery, only to then seek to renegotiate the terms of their operating contracts. His criticism wasn’t just for others; he said Network Rail needed to be honest about where others could better fulfil elements of its current role – an astonishing admission. But was this a nod to private interest, or perhaps to local government?

Certainly, London’s Deputy Mayor for Transport, Heidi Alexander, has a clear view – she outlined plans for Transport for London (TfL) to take over responsibility for the tracks themselves, from Network Rail, in and around Greater London’s suburban network to fully maximise track capacity. TfL’s full plan for a metropolitan suburban rail service is expected shortly.

On the devolution point, there appeared to be no shying away from these challenges in other regions. Far from being deterred by witnessing the recent woes of Network Rail and private operators over performance and timetabling, representatives from Wales, Transport for the North and TfL all gave the same message – they see these challenges and want to grasp them.

On paper, the Rail Summit may have only been rail industry wonks talking to each other. But far from feeling like an echo chamber there was a palpable sense of self-examination and determination. It really wasn’t a case of “we’d better change or Jeremy Corbyn will nationalise us” (he wasn’t mentioned all day); the ambitions are sincere and there at least appears to be a genuine appreciation that the route to industry’s success and the expectations of passengers are coterminous. All change? We’ll see.

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Birmingham Airport launches plan to invest £500 million to grow passengers to 18 million by 2033

It was a privilege to celebrate the launch of Birmingham Airport’s draft Master Plan at The Cube in Birmingham City Centre this morning, detailing ambitious plans to grow by 40% to 18 million passengers per year by 2033.

Birmingham Airport’s Chairman Tim Clarke and Acting MD Simon Richards were joined by Mayor of the West Midlands Andy Street, Leader of Birmingham City Council Cllr Ian Ward and Cabinet Portfolio Holder for Transport and Highways at Solihull Metropolitan Borough Council, Cllr Ted Richards, to welcome partners from across the region to mark the launch of this exciting plan that will unlock huge economic potential for the region.

The draft Master Plan sets out a self-financed new investment of £500 million, which will improve, modernise and extend facilities.  This investment will deliver increased capacity and enhance the passenger experience, to drive international trade, investment, employment, inbound tourism and the success of the region’s many universities.

The draft Master Plan further reinforces the integral part the Airport plays as a catalyst for growth across the Midlands and in the UK’s economic prosperity.  It outlines the Airport’s role in driving future economic benefit to the region which will increase by 42%, totalling £2.1 billion a year and 34,000 jobs by 2033.

An ambitious yet sustainable plan, it outlines how the Airport will provide more flights to cultural hubs, business centres and a greater choice of outbound holiday destinations.  Furthermore, the Airport will continue to expand the existing wide range of short-haul and long-haul scheduled and charter services and destinations, with both full-service and low-cost airlines, whilst maintaining its strong commitment to balancing growth with a responsibility to the environment and the people who live and work in the Airport’s vicinity.

Ahead of the final Master Plan due to be published in early 2019, today’s launch triggers the start of a 12-week public consultation, ending on the 31st January at 23:59, for stakeholders to feedback their views on the Airport’s Plans.

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Aviation and the climate war – a terminal illness?

Many across England – especially those in Merseyside and North London – have spent much of the last two weeks frantically looking at flights, scrolling up and down the exorbitant prices that might get them somewhere near their destination at some point near the first weekend of June. But as difficult as many might have found it to get to Madrid on that weekend, for something less than £1000, this could well be the future for all air travellers.

Focus on climate change has increased in recent months, with the Extinction Rebellion protests seemingly focusing minds both in the UK and abroad. The impact of these protests, whatever public perception is, has already been profound. There is no doubt reduction of carbon emissions will be a key factor of policy making for parties across the political spectrum. One of the key sectors this will affect is transport. And aviation will be under particular scrutiny.

Earlier in May the advisory Committee on Climate Change (CCC) said the UK’s planned increase in aviation would need to be curbed to restrict CO2 emissions. Having earlier set out plans to increase aviation when the 2050 target was a reduction of CO2 emissions 80 per cent. Since this was reduced to zero emissions, there have been calls for this target to be cut. The lack of meaningful progress in reducing of aeroplane emissions hasn’t helped.

While in many other areas of transport, significant leaps are being made to reduce the staggeringly high levels of emissions, aviation has been left behind. Although there have been some substantial innovations to reduce carbon emissions, and work continues to make this even more effective, advances in aviation technology still lag some way behind other sectors. Where electric cars and electric trains are now established across the world, aviation technology has made decidedly less dramatic steps.

There is an option available to airlines in order to mitigate the impact of flights – carbon offsetting. Raising prices per unit of CO2 emitted – ideally investing this into carbon offset schemes – is something that could be introduced. The positives are clear; by removing cheap flights there will be an inevitable drop off in air traffic and a reduction in carbon emissions. But there are significant negatives.

Chief among these is economic. The call for an increase in UK aviation is not without merit for Britain. As WA has seen first-hand with its work in the aviation sector, an increase in passengers has huge positive implications for industry and small businesses in the area surrounding the airport – with additional positive effects for the rest of the country. Just this week, annual statistics from Birmingham Airport showed a record number of passengers, following their Master Plan launch last year. An aviation strategy which prioritised regional airports could go a long way to redressing the economic regional imbalance across the country.

A further concern is the social impact of a significant hike in air fares. The UK already has the highest Air Passenger Duty (APD) in Europe – and a further rise in air fares based on carbon emissions could price lower income households out of travel abroad. More than denying families access to cheap package holidays (a much more serious issue than it might seem), denying a significant portion of the population the opportunity to see the world with a regressive tax. In a time of increasing isolationism and rising xenophobia, this is a potentially worrying trend.

This is not to mention the impact a global hike in air fares could have on developing countries, whose populations will be priced out of global travel to avert a crisis their country has largely not been responsible for. The idea of the developed world pulling up the ladder on the global south will sit uneasily in many quarters.

So what is to be done? First and foremost, and rather optimistically, necessity is the mother of invention. The fact there is a serious threat to the future of widely available air travel represents an opportunity for industry to come up with potentially profitable solutions. Whether that be through a zero emission aeroplane (unlikely in the short term) or a more substantial reduction in emissions in existing engine models, industry has the platform to make a decisive contribution.

This opportunity extends outside aviation as well. Improvements in rail and even road, cutting journey times as well as emissions, could significantly reduce air traffic without the need to stifle economic development. Of course, this would mean significant infrastructure investment from government (which if HS2 is the benchmark is unlikely to be smooth sailing), but industry can provide incremental solutions.

There is no mistaking: climate change is not going away. And governments will need to adopt increasingly “radical” proposals in order to address its causes. If aviation is to be a part of the future industry and government. Otherwise, opportunistic airlines and high prices will be the least of the worries for travellers from Mombasa to Montreal. And… Madrid.

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