Gridlock undermining UK economy


Britain's overloaded transport system is damaging the economy and the reputation of the UK as a place to do business and needs £300 billion of investment over the next decade if things are to improve.

A new survey of businesses and their staff conducted for employers' group the CBI has revealed widespread dissatisfaction with the nation's infrastructure and expectations that things will only deteriorate further.

Half of British companies believe the economy and reputation of the country is significantly harmed by transport problems, whilst a similar proportion said their company's own reputation has suffered.

Almost two-thirds (63 per cent) of companies in the survey said they expected the transport system to get worse in the next five years compared to only 15 per cent who think it will improve.

Half said that transport problems were having a substantial impact on their profitability, four out of 10 said their business' growth was significantly affected and a third said the problems were having a notable impact on investment in their company.

According to the Institution of Civil Engineers, congestion on UK roads alone is costing businesses about £20bn a year due to staff arriving late to work.

In an effort of reduce the effects of this lost productivity, plus increased costs and diminished customer service, the CBI survey found that almost six out of 10 (57 per cent) firms have introduced more flexible working and half have altered delivery schedules or logistics.

But the overwhelming majority of both employers and their workers believe these steps alone cannot overcome the problems and that extra investment is key.

"Although transport spending has risen in recent years, there are decades of under-investment to deal with and it is clear that business still finds it far too difficult to get its goods to market and its people to work," said Sir Digby Jones, Director-General of the CBI.

He added that the minimum needed to deliver improvements over the next decade is £300 billion of public and private investment, but pointed out that over the last 25 years Germany has invested two-thirds more per person on transport than the UK and France spends half as much more.

"We should all make more efficient use of transport - but unless we invest more to renew and upgrade the network, the economy cannot reach its full potential," Jones added.

"But money alone is not enough. We also need reform to the decrepit planning regime, which is still stuck in the 1940s - so that new projects can actually get built.

As a first step, he called on Chancellor Gordon Brown to commit £1 billion from capital reserves over the next two years to deliver quick-win, smaller-scale road and rail projects.

"Politicians of all parties will come unstuck if they allow transport to continue its slide down the political agenda in favour of more obviously voter-friendly issues," Jones warned.

"Transport is not just a business issue, it affects everyone - and they ignore it at their peril."