Written evidence from Hampshire Chamber
of Commerce (TE 76)
TRANSPORT AND
ECONOMIC GROWTH
A The Eddington Report (2006) on transport was
about reducing traffic congestion. Today's problem is ensuring
that the much reduced investment available for transport is used
primarily as an encouragement to economic growth, while still
reducing traffic congestion. Selected key transport infrastructure
upgrades of national or regional significance will need to be
judged as much on their value of encouraging growth and protecting
the economy as protecting the environment. We will need to develop
partnerships to deliver some projects including Local Enterprise
Partnerships (LEPs) and identify more innovative, perhaps more
"user-based", funding mechanisms like tailored project-related
infrastructure funds).
B In this regard, it is considered essential
that the forthcoming National Planning Framework should incorporate
an appropriate and definitive degree of specific spatial guidance
in relation to transport and safeguarding future transport routes,
including ports and airports and not be simply a generic "catch
all" planning policy document. This is particularly important
given, for example, that the draft National Policy Statement for
Ports published earlier this year has been criticized as "unfit
for purpose" and that serious questions continue to be raised
about the inadequacy of current methods for assessing proposed
transport schemes.
C The Port of Southampton is of particular significance
for the Hampshire Chamber of Commerce and its business members.
It is a national asset and an absolutely essential element of
the regional, sub-regional and city economies. The Port is universally
recognized as one of very few UK international gateways whose
commercial growth is critical to both national and regional economic
success. Furthermore, with the stunning success of the modern
cruise liner industry and the iconic vessels associated with it,
Southampton has regained its historic maritime identity.
1. The Port of Southampton as a driver for
economic growth, investment and jobs
1.1 The Port of Southampton has a crucial role
to play in driving economic growth internationally, nationally
and locally and the Hampshire Chamber of Commerce, which incorporates
the Southampton & Fareham Chamber of Commerce, has a long
and unbroken record of support for the Port and its industries
since the Chamber's establishment in 1851. For over a hundred
years, the port city of Southampton has been one of the major
international gateways for overseas trade and for the cruise industry.
It is now the major UK cruise port and UK's second largest container
terminal - DP World Southampton. Its key geographic location
in the UK and relative to mainland Europe, its deep water channels
and double tides make the Port of Southampton uniquely accessible
for modern cruise and container giants and therefore worthy of
development to encourage further investment and local jobs.
1.2 In recent years considerable investment in
technology has taken place in the Port of Southampton and its
operation which now handles over 40 million tonnes of sea borne
trade per year. A substantial proportion of this trade is with
countries outside Europe which have emerging economies not burdened
by national debt and increasingly prosperous consumers as a ready
market for UK goods.
1.3 The Port of Southampton with its modern logistics
and its direct access to the national motorway system is a deciding
factor for many companies who move into the area bringing new
investment and jobs to local people.
THE PORT
OF SOUTHAMPTON
AS CRUISE
CAPITAL OF
THE UK
1.4 Despite the recession Southampton's cruise
passengers have increased to nearly 1 million a year and a new
purpose built cruise terminal was opened two years ago. There
has been a significant increase in the number of cruise ships
and cruise lines operating from the Port of Southampton and the
cruise line Carnival has shown its commitment to the port by recently
bringing together all its staff in a new state of the art headquarters
building next to the city cruise terminal. This year the international
cruise convention was held in Southampton for the first time and
the Port of Southampton was recently voted number one turn-round
port, having handled no less than nine cruise ships in 48 hours
during a weekend in August 2009.
1.5 The cruise industry is supported by a myriad
of small and not so small companies in the local economy that
provide supplies and maintenance for the cruise ships. The Port's
continued success demands improvements to the transport infrastructure
and logistics that are essential for maintaining the timely arrival/departure
of passengers and provision of supplies to the cruise ships.
2. The importance of the port for creating
"green jobs" through supporting the development of renewable
energy such as offshore wind
2.1 South Hampshire's main contribution to diversifying
energy supply to the grid and supporting the development of green
energy will depend on the degree to which it can facilitate major
offshore capacity being "plugged in" to the grid. The
development of a tidal power array in the Solent might, for example,
contribute to exploiting this resource.
2.2 The Port of Southampton can provide direct
support for the further development of renewable energy, particularly
tidal/wave energy and off-shore wind, both in terms of on-shore
base/ trans-shipment facilities and related research and development.
The internationally recognized Oceanography Centre is located
within the Port of Southampton and supports the work of the University
of Southampton/Natural Environment Research Council.
2.3 Biomass is also of relevance and the Port
of Southampton is therefore currently partnering with Helius Energy
to deliver a 100MWe (Megawatt equivalent) biomass fuelled generating
station within the port.
2.4 The Hampshire Chamber of Commerce fully supports
this development and would wish to underline the importance of
the Port of Southampton to other future renewable energy initiatives
within the Solent area.
3. The key role the port has in promoting
manufacturing and engineering jobs
The Solent Maritime Economy
3.1 The Solent area of South Hampshire and the
Port of Southampton in particular is the focus of a major cluster
of marine employment which is of both regional and national importance.
It has been extensively researched and promoted through the
Solent Waterfront Strategy backed by the South East Development
Agency (SEEDA) and the local authorities in the area.
3.2 The Port employs approximately 12,000 people,
and in 2007 its overall contribution to the local economy was
estimated to be £2 billion. It is an essential part of the
Solent maritime economy, which is estimated to support 77,000
jobs, and is calculated to generate a total GDP of £5.5 billion.
The Port has hosted the internationally renowned annual SEAWORKS
exhibition for the commercial marine sector for the passed 10
years and has committed to ensuring on water facilities are available
for the annual Southampton International Boat Show for leisure
boats since the first Boat Show 41 years ago.
3.3 Hampshire Chamber of Commerce considers that
the Solent is probably unique in terms of its diversity - and
it is important that maximum advantage is taken from this, both
nationally and locally. Solent Maritime is of huge importance
to the economic wellbeing of the region and retains huge potential
for existing and new businesses to identify opportunities for
innovation, cutting edge international development, tapping into
the dynamics of this critically important sector of industry.
3.4 The Chamber believes that the future success
of this sector must not be compromised by failure to support the
necessary growth and enhancement of the Port of Southampton and
failure to provide for the necessary transport infrastructure
improvements.
4. The importance of infrastructure upgrades
to support the port
4.1 The Port of Southampton is identified by
Government as a key international gateway which is a component
of the nation's transport system that is critical both to the
functioning of that transport system, and the economic success
of the country. In the context of the South East, the Port of
Southampton is further recognised by Government as a major deep
sea international gateway port with significant global and economic
importance. The Hampshire Chamber of Commerce wholeheartedly agrees
with this viewpoint.
4.2 The current rail up-grade between Southampton
and the Midlands is a key £71 million project designed
to remove up to 50,000 lorries a year from the region's roads
and provide a cheaper, quicker and more practical way of transporting
goods around the country. This up-grade is a further enhancement
of the rail, road and port infrastructure already in place. Over
the next twenty years however, further significant improvements
will be required. Regarding the road system that feeds into
the Port, important improvements to M27 J5 are on hold for phases
2 and 3 pending the spending review this autumn.
4.3 By 2030, the Port is expected to be handling
a minimum of 4.2 million containers units (TEU); 840,000 motor
vehicles; over 2.1 million tonnes of dry bulks and almost two
million cruise passengers. It is likely that by 2020 the Port
will be approaching the practical limits of land use optimization
within the Eastern and Western Docks, and that further road/rail
enhancements will have been required to support this optimization.
Beyond 2020, the Dibden port development land comprising over
200 hectares of land on the Western Waterside reclaimed between
the 1930s and the late 1970s (as a result of various dredging
operations in the Solent area) will need to be brought on-stream
for port expansion purposes, including land sufficient to provide
appropriate road and rail access to the reclaimed area.
4.4 The Port has made a commitment in its Masterplan
to deliver sustainable development which secures an appropriate
balance between environmental factors and economic growth. Within
this context, future development necessary for port optimization/expansion
and related transport infrastructure upgrades is fully supported
by the Hampshire Chamber of Commerce.
September 2010
Written evidence from the London Chamber
of Commerce and Industry (LCCI) (TE 77)
The London Chamber of Commerce and Industry (LCCI)
is the capital's largest and most representative business organisation,
comprising some 2,500 members. Our members range in size from
multi-national companies to SMEs and sole traders, in a variety
of sectors.
Without exception, our policies are always informed
by the experiences of our member companies. It is only by putting
London's businesses first that the capital can maintain its outstanding
record for creating well paid jobs, leading the world in service
provision and being Europe's favourite location for foreign direct
investment.
Transport is a key aspect of the work of the LCCI,
as it is essential for the continued success of London as a centre
for business, offering accessibility to a skilled workforce from
a wider area than otherwise would be possible and excellent connectivity
to domestic and international markets.
We welcome this opportunity to respond to the Transport
Select Committee's call for evidence for its inquiry into transport
and the economy as this is a vital issue to London's business
community.
INTRODUCTION
1. The importance of transport to the economies
of the UK and London cannot be overestimated. Many of the things
that we take for granted today would most likely be impossible
had it not been for innovations in transportation. There would
not have been great infrastructure, industrialisation or mass
production, if transportation was not available to facilitate
it. Development would have been hampered and the country could
not have kept up with competitive markets if there were not roads,
railways, shipping or airways to carry goods and passengers to
different places. In other words, the UK would not have experienced
the economic prosperity and progress it has were it not for advancements
in the transportation sector, and the access to local, national
and international opportunities these have provided.
2. The transport infrastructure available in
London in particular, but the UK more generally consistently comes
out very highly as a reason why business choose to locate here,
in survey work conducted by the LCCI. Over 85% of businesses rated
this aspect of London's offering either "very important"
or "somewhat important" in one of our most recent
polls on the subject.[244]
3. By the same token, businesses report it is
a constant source of concern, particularly in London. Were the
advantages that London enjoys through its transport offering to
be lost through under-investment and neglect, firms would consider
relocating their business to one of the capital's global competitors.
Obviously, this is something that cannot be allowed to happen,
especially in light of the current government's focus on economic
recovery and encouraging entrepreneurship and private sector job
growth.
Have the UK's economic conditions materially changed
since the Eddington Transport Study and if so, does this affect
the relationship between transport spending and UK economic growth?
4. The LCCI feels that the economic conditions
of the UK have changed significantly in the four years since the
publication of the Eddington Transport Study. In 2006 the UK was
still enjoying the fruits of overwhelmingly benign global economic
conditions. That year UK GDP grew by 2.7%, while the LCCI's own
survey work registered an average positive balance of +20 points
across all four quarters when directors were asked if they were
confident in the outlook for London's economy over the upcoming
twelve months.[245]
5. Fast forward to 2010 and the figures tell
a very different story. GDP is still down by around 4.5% on its
pre-recession levels, while unemployment has risen from around
5.5% in 2006 to 7.8% in 2010.[246]
Figures from the LCCI's own quantitative data show a similar tendency
with an average negative balance of -3.33 points when directors
were asked the same questions as above.[247]
6. The country has also seen the size of the
national debt, as well as the spending deficit rise since the
Eddington Transport Study was published, with the former reaching
£905.4 billion or 68.1% of GDP, while the latter currently
stands at £155 billion per annum.[248]
7. It is for these reasons that, upon its election
in May 2010, the new government has embarked on a Comprehensive
Spending Review, the aim of which is to restrict and reduce the
sizes of the national deficit and debt. This will obviously necessitate
efficiency measures and the cutting of a wide variety of departmental
programmes, in order that Whitehall is able to meet the Treasury's
demands for savings of around 25%, except in Health and International
Development. This is the wholly different economic context in
which this inquiry finds itself, from that which existed in 2006,
when the Eddington Transport Study was first published.
8. In the view of the LCCI however, these economic
circumstances have not altered the key messages of the Eddington
Transport Study around the importance of transport to the prosperity
of the country. Spending on the infrastructure is still a vital
component of economic growth.
9. In fact, the LCCI would argue that there has
never been a better time to invest in the transport network. The
recent uncertain economic conditions have actually had a negative
impact on the number of users travelling on our roads, using our
trains and flying from our airports. This will only be a short
respite, however, before numbers of users reach and then surpass
the levels predicted before the recession. In fact the Association
of Train Operating Companies already estimates the number of rail
journeys taken has returned to pre-recession levels, while the
next 20 years will see a doubling of demand for rail travel.[249]
10. This slowing of demand has created an opportunity
to invest in the transport infrastructure of the country, while
potentially reducing the disruption and impact to the public at
a time when the number of journeys is not as high as it might
have been.
11. It is also equally vital that transport investment
be maintained as it has been continually shown that improving
links between the different areas of the country encourages growth
and investment. This is in addition to the employment created
by the project itself and its requirements.
12. The LCCI and the whole business community
in the capital understand that the government sees its first priority
as being that of getting the deficit under control, and that this
necessitates departmental spending cuts. However, we would caution
against cutting spending on transport projects as they have been
proven to facilitate economic development. Where cuts are unavoidable,
we would instead encourage taking a different approach to the
funding of these projects, maybe through private funding raised
via a national infrastructure bank.
13. There is, however, an important pre-condition
to this and that is that assurances must be given that those projects
for which the money is being raised via an infrastructure bank
will go ahead. Otherwise, it will not be an attractive investment
opportunity for businesses, pension funds or private investors.
The LCCI would therefore suggest that an efficient approval process
must be put in place for major projects which are privately funded,
at least.
14. This will also require the government to
consistently take a longer term, strategic view than businesses
have perhaps previously felt has been taken, as they did when
considering building Crossrail, taking into account passenger
estimates up to 2,076! Despite this two-thirds of businesses still
felt the government did not take a sufficiently long-term strategic
view on major London infrastructure projects in recent survey
work, and it was a central feature of the Eddington Transport
Study.[250]
What type of transport spending should be prioritised,
in the context of an overall spending reduction, in order to best
support regional and national economic growth?
15. The LCCI is somewhat reluctant to "pick
winners" out of all the possible transport types and projects
which are under consideration or proposed at this time. We feel
it can be problematic to try and second guess what and where the
future needs o economic growth will be.
16. The LCCI does however, understand the need
to prioritise, especially in these straightened times and so would
suggest to the Transport Select Committee and encourage the government
to focus on those projects that would provide the benefits of
increasing capacity and connectivity the most. We believe these
are the projects which will offer the best in terms of the returns
on investment and social benefits, and ensure the economy is
able to grow and sustain itself.
17. From a London perspective, the LCCI feels
that this means projects such as Crossrail and the upgrades to
the London Underground network are vital. With the population
of the capital set to rise by 1.3 million by 2031 and with
an additional 750,000 new jobs being created, the extra capacity
provided by these two projects is crucial.
18. In total, Crossrail and the tube upgrades
will add an estimated £78 billion to the GDP of the
country, while the Treasury will see a tax boost of up to £17 billion
through the provision of Crossrail alone. Due to the innovative
way Crossrail is being funded, through a special business levy,
contributions and funding from Transport for London (which is
due to be recouped from the fare box in any case), this is on
an investment of one-third or £5 billion towards the
cost of the project.[251]
19. The capital's boroughs will also benefits
significantly, with Tower Hamlets (£51.8 million), Newham
(£99.8 million) and Ealing (£56.9 million)
seeing some of the largest boosts to their economies.[252]
20. The LCCI also feels there is a strong case
to be made for other transport projects which are more long-term
in their provision. These projects include Crossrail 2 (the Hackney-Chelsea
line), the building of a high speed rail line, beginning with
a link between London, Birmingham, Manchester and Scotland and
the provision of extra capacity at London's airports.
21. These projects will both supply more capacity
on over-crowded routes and at airports but also increase the connectivity
of London to other regions and internationally, especially if
the future high speed network were to be linked up with the existing
High Speed 1 line operating out of St Pancras.
22. The LCCI also believes that in some cases
it would be appropriate to adopt a phasing approach to the provision
of certain transport projects. High Speed 2, for instance, could
be built in a number of stages, with subsequent extensions to
the line being paid for by revenue generated by those parts of
the route already in service, thereby spreading the cost but still
delivering on a vital infrastructure scheme.
23. There are also other regional projects that
the LCCI feels are important to safeguard the future of the UK
economy, represent excellent value money and deserve to be prioritized.
These includes the Birmingham motorway box, which offers hard
shoulder running in the areas around the M5, M6, M40, M42 motorways,
the Manchester Transport Hub and upgrades to the East Coast Mainline.
In total, according the Department for Transport's own figures
these projects will see a £5.8 billion return on £1.7 billion
invested.
How should the balance between revenue and capital
expenditure be altered?
Are the current methods for assessing proposed transport schemes
satisfactory?
24. The LCCI does not wish to comment on these
two issues.
How will schemes be planned in the absence of
regional bodies and following the revocation and abolition of
regional spatial strategies?
25. The LCCI feels this is an issue of particular
concern, despite the retention of the capital's own spatial strategy
by the Mayor of London.
26. This stems from the idea that many projects,
particularly those which are transport related, will cross local
authority boundaries. As far as London is concerned, this can
be seen in relation to Crossrail which will pass through Hillingdon,
Ealing, Hammersmith and Fulham, Kensington and Chelsea, Westminster,
the City, Tower Hamlets, Newham, Redbridge, Barking and Dagenham
and Havering in the capital alone. Plans for a high speed rail
line between London, Birmingham, Manchester and Scotland will
encounter similar issues.
27. Future projects therefore run the risk of
being undermined should one local authority which will see part
of the proposed transport project located within its boundaries
choose to protest. This overall strategic oversight is one aspect
of regional spatial strategies that, with their abolition, risks
being lost.
28. The LCCI understands the current government
wishes to foster a more accountable and empowered civic society,
where local communities' needs and wishes are central to government
thinking. However, we also feel this could act as a brake on progress
and development, and the UK could lose out to its global economic
competitors in the race to secure inward investment.
29. We would therefore like to see nationally
important transport projects, whether infrastructure or operational
schemes, decided on the basis of the balance of benefits and impacts
to the nation and not skewed by local, or even regional, issues.
The LCCI believes this can best be handled by national government.
September 2010
244 http://www.londonchamber.co.uk/docimages/6270.pdf
Engineering London's Success: The value of civil engineering to
the capital's economy, December 2009 p. 5. Back
245
Taken from LCCI's Quarterly Economic Surveys, conducted in March
(+28), June (+18), September (+15) and December (+19) 2006. Back
246
GDP figures for 2010 can be found at http://www.statistics.gov.uk/cci/nugget.asp?id=2294,
while unemployment statistics for 2010 can be found at http://www.statistics.gov.uk/cci/nugget.asp?id=12 Back
247
Taken from LCCI's Quarterly Economic Surveys, conducted in March
2009 (-48), June 2009(-6), September 2009 (+17), December 2009
(+2), March 2010 (+5) and June 2010 (+10). Back
248
http://www.statistics.gov.uk/pdfdir/maast0310.pdf Back
249
http://www.atoc.org/media-centre/latest-press-releases/demand-for-rail-travel-returns-to-pre-recession-levels-100496 Back
250
Engineering London's Success, p. 7. Back
251
London's Transport Upgrade, Transport for London, pp. 1,2
and 5 Back
252
http://www.london.gov.uk/sites/default/files/finalprospectus.pdf
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