By Cliff Thomas

What could Brexit mean for Heritage Railways?

Published: 8th July 2016

How the BREXIT vote could affect the huge UK preserved railway industry

Two weeks on from the momentous referendum on Britain’s membership of the European Community the people have spoken. We know what they said, but have precious little idea of what happens next - in common with the politicians.

A narrow, but clear, majority opted for Brexit – and politicians went into melt down mode. Two political parties are now sorting out who to choose as their new leader while a third tries to decide if it wants to depose the existing post-holder and elect another – or possibly the same leader as at present if he can get on the ballot paper – while all shades of opinion wrestle with the ‘what now – and when’ question, implementation of Article 50 of the Lisbon Treaty which starts the two-year clock running down to Britain’s actual departure from the EU.

The day after the Referendum, took a quick look at what the vote might mean for the UK rail industry and how could affect our national railway network, with the emphasis on ‘might’ and ‘could’ - see .

Assuming the Article 50 button is pressed, apparently not quite the immediate post-referendum foregone conclusion many expected, what is the likely effect on our Heritage Railway’s? The same caveats apply now as did two weeks ago!

Heritage railways are big business

According to the All Party Parliamentary Group’s Report on Heritage Railways the sector employs the equivalent of more than 4,000 workers who generate a combined annual turnover of some £110million. In 2013, almost 11million people enjoyed a visit to a heritage railway and the Report calculates that heritage rail is worth £250 million to UK tourism annually.

Leaving aside the intrinsic value of preserving our heritage and inestimable worth in terms of interest and lifestyle for thousands of dedicated volunteers and even greater numbers of enthusiasts who derive pleasure from heritage steam and internal combustion operation on private lines and over the national network, this is significant business by any standards. Unsurprisingly, there are many questions as to what the future holds.

They said:

“As is the case for all businesses in the UK, it will take time for answers to emerge,” commented Heritage Railway Association chairman, Brian Simpson OBE after confirming his personal disappointment that the country voted to leave the EU. “'What effect this will have on Heritage Railways is hard to judge,” he confirmed.

“There is bound to be a great deal of uncertainty in the coming months and years. The decision will have a profound effect on our country. Heritage Railways will, of course, carry on doing what they do best, providing the experience of travelling by train in a bygone era, and competing with other tourist attractions for visitors and enthusiasts alike.”

Tourism will continue to be a major contributor to the UK economy and in many respects the heritage railway sector is better-placed than many to survive the challenges ahead. It could be that the falling value of the Pound will work in favour of heritage lines in the short term. This could arise from the ‘staycation’ effect which became evident during the height of the last recession (people taking holidays and breaks in Britain rather than abroad) and the comparative reduction in cost attracting foreign tourists to Britain.

Longer term, cost rises in all manner of purchases could become apparent and take effect, especially imported items, such as fuel and copper and other non-ferrous metals which are important for steam locomotives.

General opinion holds that little, if any, change in regulatory and safety standards applicable to heritage lines will occur with no expectation of significant changes in the UK regulators' interpretation of European Directives, or in the ROGS 2006* Safety Regulations.

Support structures

As the heritage railway movement has matured, numerous small and medium size businesses have developed and grown offering supporting services. An example is Alan Keef Ltd, a firm which has developed a client base in many European countries supplying anything up to complete trains - locomotives and carriages – along with restoration and overhaul of steam and internal combustion motive power. Speaking to managing director Patrick Keef felt there would be little immediate effect on their business, operating as it does in a comparatively niche market where demand for Keef’s products and services will continue. If anything, the falling Pound reduces the relative cost to clients from Denmark, Netherlands, Germany etc. as things stand.

However, while Patrick expects the business to continue to come in, he does foresee things becoming that bit more difficult as border controls come into place and bureaucratic issues start arising as current harmonisation becomes uncoupled.

Grants for Capital Investment

By far the biggest concern for the heritage sector has to be the cessation of significant European grant funding. Once Britain is out of the EU such grants, many of which are very high value aimed at economic regeneration of targeted areas, will end.

The first question which has to be asked is what happens with grants which have been provisionally awarded but not yet officially confirmed and announced - is aware of two very large examples in relation to major narrow gauge railway projects in Wales within this category. “We hope to have a firm decision around the end of July, but as you can imagine, there is some uncertainty at present," commented the general manager of one of the affected railways.

Hopefully, there will be good news and these projects will proceed, but how likely are new applications to receive favourable consideration when the EU knows Britain is leaving the Community in two years’ time?

European Regional Development Fund grants

European Regional Development Fund grants have assisted numerous heritage lines around the country develop their infrastructure. Perhaps the most spectacular example is revival of the Welsh Highland Railway, achieved with major grant help from Europe channelled through the Welsh Assembly. It is probably the case that this spectacular achievement would not have happened had such Euro cash not been available.

Other examples abound, such as £225,000 of ERDF funding towards the major package of developments at Railway Preservation Society of Ireland’s Whitehead Excursion station, modern workshops at Tyseley part-funded by Birmingham City Council’s Tyseley Property Assistance Programme/European Regional Development Fund, contributions to Llangollen Railway’s extension and new station at Corwen, around half the £500,000 cost of extending Llanberis Lake Railway from Gilfach Ddu to a new station close the village being contributed by ERDF, £100,000 of ERDF money (together with £150,000 from Advantage West Midlands) towards reinstate of the footbridge at the Severn Valley Railway’s Highley station……….the list goes on.

Heritage Railways are good for the local economy

Such grants make the dreams and aspirations of enthusiasts come true, but are not awarded as an altruistic gesture by a rail-fan friendly EU. They are based on solid economic cases.

Research presented to the All Party Parliamentary Group on the Value of Heritage Railways suggested that heritage railways on the whole bring a benefit to the economy of around £2.70 for every £1 of turnover, the vast majority of this benefit coming from additional spend in the local economy. And this was recognised in the recent million pound award by the Government to preserved railways.

In simple terms, heritage railways bring valuable benefits to their communities, with little, if any disadvantages and the trickle-down benefits being widespread and lasting. On this basis, capital investment in the form of grants to heritage rail projects reap a dividend greater than the initial worth over a long time period for the communities they serve both in terms of local employment and spending in the locality by visitors.

The economic case for grant aid is clear, but without Euro money will such investment still be made from UK internal sources alone? One has to hope so, otherwise projects such as revival of the iconic Lynton & Barnstaple Railway over the trackbed from Killington Lane to Blackmoor and Wistlandpound, which offers an overwhelming case of economic and environmental benefits with no discernible downside, will struggle to reach fruition just at the stage when the vision of the promised land stands on the verge of becoming a reality.

“The Heritage Railway Association works closely with the All Party Parliamentary Group on Heritage Railways,” commented Brian Simpson. “It will ensure that parliamentarians are well briefed about the need for the sector to receive funding from the UK government, to replace the EU grant funding for railways, tramways and all our members, that will inevitably cease.”

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