Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence

Memorandum by London Chamber of Commerce and Industry (IT 31)



  1. London Chamber of Commerce and Industry is the largest business representative organisation in the capital. London is heavily dependent for its continuing success as a World City on the development of an excellent public transport system: in the capital 43 per cent of people travel to work on public transport (75 per cent for those working in central London, more than five times the national average) and while bus use everywhere else in the country has declined, in London it has grown. Its good record of public transport provision and use means that while London receives a large share of the national transport budget, when translated into subsidy per passenger head it is much lower than other parts of the UK. London is the economic powerhouse of the UK, contributing between £5 billion and £14 billion, net, to the Exchequer. The capital's transport infrastructure is, clearly, a national asset.

  2. The London Chamber made detailed representations to the consultation on Developing an Integrated Transport Policy in November 1997. These representations addressed a wide range of issues of concern to the business community, reflecting how important an efficient transport infrastructure is to London's economy. This evidence, however, does not repeat that. It focuses on five key issues: improving public transport; the future of rail infrastructure including investment funding; efficient freight transport; airports policy; and implementing the new arrangements in London.


  3. Having long called for a strategic approach to transport provision—encompassing both passenger and freight transport—which would take into account economic and environmental objectives, and which would consider transport in the context of land use and infrastructure planning, London's businesses welcome the publication of the White Paper. The Government is to be congratulated for tackling this difficult task.

  4. "A New Deal for Transport: Better for Everyone" proposes that the way forward is to implement a sustainable transport system. Business believes that the objective of such a strategy must be to foster and support a thriving regional and national economy, efficient movement of people and freight and an improved quality of life offering mobility, access to goods and services and freedom from pollution.


  5. The worsening problem of traffic congestion, and the serious impact this is having on the capital's businesses, means we welcome the Government's commitment to encouraging reduced reliance on the private car. The way to achieve this is to ensure that there exists a realistic alternative to the private car in the form of an efficient and attractive public transport network. If people are to be attracted to and retained on public transport, it must offer not only a "seamless journey" but be able to compete successfully with the car's reliability, speed, frequency and comfort. Improvements to all aspects of public transport—infrastructure, services, integration between modes, provision of information, fares and ticketing—are essential. It is also essential that these improvements are implemented before any restrictions on the use of private cars are introduced. As the White Paper recognises (paragraph 4.70), London has a good record of public transport provision and use, helped by the London Travelcard.

6. Fares and Ticketing

  Employment and travel patterns are changing. Despite the success of the Travelcard, which LCCI regards as the single most effective measure of encouraging public transport use in London, it is essential that it is supplemented by new sorts of tickets which reflect the way people work today. Commuters who need their cars for work on some occasions, but would be able to use public transport at other times, part-time workers, people working at more than one site or partly at home—all might be encouraged to use public transport more if new types of ticket and fare packages which are financially attractive to irregular users could be introduced.

7. Buses

  Expansion of the bus network and service levels is a quick and relatively inexpensive way to improve public transport, hence the White Paper's emphasis on the role of buses. Expansion must, however, be matched by improvements in reliability and journey times. Key to this is the completion of a coherent, London-wide network of bus lanes, and other bus priority measures, and high levels of enforcement. We therefore welcome the Governments commitment (paragraph 3.15) to this. However, creation of new bus lanes and completion of other priority measures must not take place at the expense of careful planning and thorough consultation with business to ensure that appropriate arrangements are made for access, including short-term parking and loading bays.

  8. We recognise that significant improvements in public transport can result from better bus services, and making more effective use of existing road and rail infrastructure. However, we strongly believe that the priority for public transport in London must be substantial investment in the whole of the rail network: "heavy" rail, the underground system, and light rail schemes.


9. Strategic Rail Authority (SRA)

  The stated objective of this proposed new authority, to maintain and enhance an integrated network of infrastructure and services for passengers and freight, is a worthy one. Legislation will need to set out in more detail the SRA's duties and powers. London's heavy reliance on commuter rail services into and within the capital as well as the Underground, makes it essential that services across the whole are planned and managed in a coherent way. Business has serious concerns that this imperative will be compromised as, with the creation of the SRA and new public-private partnership arrangements for the Underground, the number of organisations responsible for this combined network increases. It is vital that these concerns are addressed in the SRA Bill by including a clear duty to work closely with London's Mayor and Transport for London.

10. Investment Funding

  To fulfil its responsibilities to assess future need and propose development of the network to meet this, the SRA will have to address how expansion of the railways is to be funded. Government constraints on public spending have led to consideration of alternative sources of funding for major infrastructure projects. Involving the private sector, through the Private Finance Initiative or Public-Private Partnerships, offers some scope. New or extended charging systems or taxes, with revenues ring-fenced for transport, also have their supporters. On these proposals, LCCI believes that the debate must focus on which measures, either singly or as part of a package, would be appropriate and effective. In addition, we would draw the Committee's attention to some recent research and economic modelling carried out for LCCI by the National Institute of Economic and Social Research[9] which bears on this issue.

  11. Calculations reveal that London makes a net contribution to the UK Exchequer of between £5 billion and £14 billion. Analysing the impact of re-investing a fraction of that sum (£2 billion) back into the capital suggests that the greatest benefits result from spending on infrastructure. The modelling demonstrates that such investment will result in the largest improvement in private sector output when compared with increases in general levels of public spending or with reductions in property or personal taxation. LCCI considers that there is a strong case for investing an additional £2 billion per year in London's infrastructure, to boost the capital's competitiveness and thus ensure it is able to continue to fulfil its responsibilities to the UK as a whole.

  12. In these circumstances, projects such as CrossRail, the Chelsea-Hackney Line and the extension of the East London Line become affordable. With their completion would come not only a revitalised and more efficient public transport network, but wider economic benefits such as increased output, increased employment and productivity, and a rise in investment and exports.


  13. The White Paper sets as an objective the absorption of all increases in freight traffic by non-road modes, such as rail and river. Business supports initiatives to shift freight from road to rail, but believes the White Paper's target is wholly unrealistic. The scope to shift the balance away from road is clearly limited, and will cost the Exchequer substantial amounts in direct and indirect subsidy. Therefore, while proposals to revise the freight facilities grant regime and to harness the land-use planning system to help achieve these objectives are welcome, the vast majority of freight movements will continue to be road dominated.


  14. LCCI has long urged the Government—both current and past—to take a long-term strategic approach to airports policy believing that the current policy vacuum poses a real threat to the continuing health and success of the air transport industry. LCCI therefore strongly welcomes the Government's commitment in the White Paper to prepare a UK airports policy—in line with the Transport Select Committee's own recommendation. The 30-year approach taken is particularly refreshing given the long lead-time required for many infrastructure projects. The establishment of a planning framework will also provide a climate of security in which the private sector can be encouraged to invest.

  15. LCCI also supports the Government's stated objective of increasing public transport links to airports particularly in relation to rail access. As in so many cases, where issues of surface access are addressed too late, problems are compounded and the cost of solutions increased. The solutions that are chosen must however be adapted to the particular needs of those travelling long distances, often with heavy and bulky luggage.

  16. While LCCI is not unsympathetic to the Government's desire to press for the removal of the exemption from tax on aviation fuel, we would draw attention to the fact that the decision to introduce Air Passenger Duty (APD), was partly justified on the basis of there being no aviation fuel tax. To superimpose a fuel tax on the APD would be to penalise the UK airline industry twice over with potentially severe consequences.


  17. The White Paper alludes to proposals for a new Authority in London, and the Mayor's responsibilities for transport, set out in more detail elsewhere. LCCI has evaluated the White Paper in the context of London's changing political landscape, and considers that there is a need for clarification of the Government's intentions for the introduction of local transport plans, road user charges and workplace parking charges in the capital.

  18. Business firmly believes that transport planning in London demands a strategic approach. The Mayor's integrated transport strategy should, in effect, be London's "local transport plan". That strategy must include policies which will define where and how the various new charges are to be applied in London and how the revenues are to be invested. Individual boroughs, with responsibility for developing local implementation plans, will thus be able to reflect local circumstances within a coherent, London-wide framework.

  19. Business has supported call for the introduction of congestion charges to tackle what is a growing problem, with two provisos. First that, charges are introduced, public transport is improved to offer a reasonable alternative to the car, and secondly that revenues are ring-fenced to benefit transport. The White Paper does not contain an unequivocal commitment to meet the first of these provisos, we welcome the Government's undertaking that powers to charge road users will have to be used specifically to reduce congestion, and that revenues must be spent on transport improvements. However, while the prime purpose of road user charges must be to reduce congestion, in considering whether or not to introduce a charging scheme the wider social, economic and environmental impacts must be taken into account in order to prevent problems simply being displaced.


  20. The publication of the Integrated Transport White Paper is a major step forward, and many of the proposals it contains are welcome. However, it is only a first step. Much work remains to be done to develop the framework into a detailed strategy, to refine it, and to translate its vision into a reality. This Select Committee Inquiry is a valuable opportunity to begin this work, and we look forward to its Report and the Government response.

  21. Through the series of consultations promised in the White Paper the process will be continued. The London Chamber will seek to represent the views of the capital's business community and to ensure that due weight is given to the economic arguments for an efficient and integrated transport infrastructure.

23 September 1998

9   London Economy Research Programme What if part of London's subsidy to the rest of the UK was ploughed back into the capital? LCCI September 1998. Back

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