Transport and the economy

Annex A

NECC Briefing: Transport Priorities , July 2010

1. About North East Chamber of Commerce

The North East Chamber of Commerce (NECC) is the North East’s leading business membership organisation and the only regional Chamber of Commerce in the country, representing more than 4,500 businesses located in Northumberland, Tyne and Wear, Durham, and the Tees Valley. Our members are drawn from all sizes of business across all sectors and employ about 30% of the region’s workforce.

2. Summary

· NECC believes that the current spending review is necessary, but also that the private sector will need the very best transport infrastructure in order that it can generate the UK’s economic recovery;

· Following the spending review, improvements to A19 junctions around the Tyne Tunnel must go ahead as planned given the project’s strategic importance to the North East economy, and given that the scheme brings with it a benefit to cost ratio of 5:1;

· Investment in further infrastructure projects that demonstrate clear value for money must be ongoing, with regional aviation and low carbon vehicles playing an increasingly valuable role in the North East economy;

· Increasing capacity on the east coast mainline to cater for rising demand and ensuring that it links to a high speed rail network will unlock further growth potential for North East businesses.

3. Background

NECC members consistently highlight transport as a key issue to their businesses. In particular, effective links to domestic as well as foreign markets are critical, especially in the North East which is the only region in the UK to enjoy a positive (international) balance of trade.

Continued strategic investment in our transport infrastructure is of critical importance if we are to ensure that vital links to internal and external markets are not jeopardised as spending cuts are implemented. Any money that is available must be targeted at maintaining and building these links.

Strategic road connections to the North East remain sub-standard, with the region still not linked to the national motorway network. This must be addressed. Of immediate importance are junction upgrades on the A19 on both sides of the second Tyne Tunnel, which have been accepted into the current regional spending programme, and as the only elements of the strategic road infrastructure included should be seen as the top priority within that.

4. Spending Review

NECC agrees that the spending review is worthwhile in light of the pressing need to reduce the unprecedented levels of public debt. However the review must take into account the role that businesses will play in generating recovery, employment and growth. NECC believes that the Government should prioritise investment in infrastructure, provide the tools for businesses to improve their performance and remove barriers that impede growth. Pursuing these objectives will enable business to deliver the recovery.

Any loss of funding previously allocated to the region for transport would be disappointing.

The A19 is a project that is of critical importance to businesses in the North East, and has a benefit to cost ratio of 5:1. Ensuring that the schemes which make up this project go ahead must be a priority for the Department for Transport.

The A19 forms part of the strategic road network in the North East. It provides a vital commercial link connecting the Tees Valley, County Durham, Wearside and Tyneside conurbations. The Highways Agency has priced the upgrades to junctions on both sides of the Tyne Tunnel at £284.7 million and projected that the economic benefit will be £1.3 billion.

Improvements to the A19 junctions will ensure that the investment that has already been made in the second Tyne Tunnel will help enable this route to reach its full potential: easing congestion and delivering tangible economic benefits. A further benefit is that upgrading the A19 junctions will ease pressure on the A1 Western bypass and provide an affordable interim solution to this heavily congested stretch of road.

5. Other Transport Priorities

Investment in high speed rail should provide a network ensuring maximum economic benefit across the UK, including to the North East. A clear timetable for connecting different regions must be produced before the first phase is started to avoid skewing investment decisions. The North East must be linked to new high speed services from day one. However, capacity on the current East Coast Main Line will face severe pressure in the next decade so measures to address this cannot be put off.

International trade has been a vital component of North East economic success in recent years, so connections to gateway airports and ports must be strengthened. Air passenger duty threatens this as the extra cost burden will put the biggest pressure on more marginal flights to regional airports, in spite of the fact that the North East’s airports in particular generate roughly £500 million of gross value annually.

Switching to a per-plane system of aviation taxes will place UK airports at a disadvantage to their European competitors, and will have a particular impact upon regional airports due to the smaller loads that they often carry.

The North East has an established automotive industry and supply chain which contribute a vast amount to the regional economy. Low Carbon Vehicles represent a growing opportunity within this sector, with Nissan recently announcing that it is to produce the Leaf electric vehicle at its Sunderland factory. Low carbon vehicle expertise must be supported with low carbon vehicle infrastructure that supports growth in this sector.

July 2010