Transport and the economy

Memorandum from the Federation of Small Businesses (FSB) (TE 06)

The Federation of Small Businesses (FSB) welcomes the opportunity to respond to the above named consultation.

The FSB is the UK’s leading business organisation. It exists to protect and promote the interests of the self-employed and all those who run their own business. The FSB is non-party political, and with 213,000 members, it is also the largest organisation representing small and medium sized businesses in the UK.

Small businesses make up 99.3 per cent of all businesses in the UK, and make a huge contribution to the UK economy. They contribute 51 per cent of the GDP and employ 58 per cent of the private sector workforce.

Many small businesses rely on the road networks to visit customers, distribute finished products or obtain raw materials. An efficient road network with minimal congestion is therefore essential.

We trust that you will find our comments helpful and that they will be taken into consideration.

1. Small businesses are highly dependent on transport. When asked, in a recent survey, what the preferred mode of transport was for journeys over 200 miles, 54 per cent of respondents said car, 33 per cent said air and 31 per cent said rail. [1]

2. This suggests that when small businesses need to travel they travel by car. The road network is crucial to the survival and more importantly the growth of small businesses. Many small businesses rely on the road networks to visit customers, distribute finished products or obtain raw materials. An efficient road network with minimal congestion is therefore essential. This fact has not changed since the publication of the Eddington Study in 2006 and is unlikely to change in the near future.

3. Funding of road networks is therefore of great importance to small businesses. The FSB has traditionally been opposed to any form of road pricing. In an FSB transport survey carried out in September 2009, 58 per cent said that it is completely unacceptable to introduce a road-pricing scheme. FSB members feel they are putting enough funds towards the transport system through road tax and petrol duty.

4. Typically small businesses trade within their local vicinity and therefore travel to customers and clients by car. 60 per cent of small businesses have said that it is not relevant for their business needs to travel by air, because they never travel that far. [2]

5. Another reason why small businesses prefer to travel by road is that it is considerably cheaper than rail; especially if more than one person is travelling. Small businesses have to pay their own rail fares and as flexibility is not always possible, by booking in advance, small businesses often lose out on potential savings. The cost of rail travel has to be improved if usage is to be increased.

6. Looking at how toll charges affect small businesses only 4 per cent of respondents in an FSB survey said they were affected every day. Just over a quarter of respondents, or 26 per cent, said they were affected every month. More than half, or 60 per cent of respondents, said that they were not affected at all by toll charges in their regular business travels. [3]

7. When asked whether respondents would change route to avoid toll bridges/roads/tunnels, 48 per cent said they would change their route and. [4]

FSB Regions and the devolved countries

8. On a regional level matters get more complicated and down to detail due to the considerable regional variation of transport density and congestion. The FSB has not yet collected extensive data from every region but by way of example FSB members in the East of England have said that they are strongly in favour of the campaign to upgrade the A11 by dualling a section of the road.

9. In the South West, FSB members have said that a significant part of the productivity gap stems from the time distance separation from major population centres. Each 100 minutes of travel time reduced productivity by 6 percentage points.

10. The major strategic need for the South West is a second primary route. The M4/5 corridor is increasingly liable to closure as a result of accidents. On such occasions, the absence of alternative routes means the South West is effectively shut off from the rest of the UK. This is not acceptable from a business perspective.

11. Although transport is a devolved issue, English transport policies and projects are of great significance to small businesses in Scotland, Wales and Northern Ireland.

12. Transport systems are vital as trade routes, and it is important that ports, airports and road networks in particular are as efficient as possible to ensure ease of movement of goods and freight throughout United Kingdom and beyond.

13. Similarly the Rail network – mainly development of High Speed Rail as well as issues around fuel duty is of importance to the devolved countries.

September 2010

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