Political uncertainty is stopping the UK delivering the “transformational” infrastructure upgrades the country needs, according to new research from the Confederation of British Industry (CBI).
The survey of 443 senior business leaders shows that in the key areas of energy and transport, 67% and 57% of businesses respectively, expect infrastructure to worsen in the next five years.
Some 89% believe that infrastructure decisions should be taken out of politicians’ hands and given to an independent commission, as proposed by Olympic Delivery Authority boss Sir John Armitt.
Almost all businesses believe political intervention discourages investment and 93% identified political rhetoric as a problem, damaging confidence in markets.
Two-thirds of firms report that energy infrastructure has worsened in the past five years, and more than half see the same in transport. Four out of five firms say fears about future energy security are being factored into their investment decisions now.
Businesses see UK infrastructure as worse than that of the EU, Australasia and North America.
More than half of businesses (52%) report a worsening of motorways in the last five years, and 65% see the same in local roads. The future is seen as bleak, with 77% and 86% of respondents expecting motorways and local roads to either stay the same, or get worse, over the coming five years.
Some 46% of firms in London say that indecision on new airport capacity is already impacting investment decisions.
Katja Hall, CBI deputy director general, said: “Progress on infrastructure has been a case of two steps forward and three steps back for far too long. While the policy environment has improved, businesses still don’t see upgrades to mission-critical parts of our infrastructure on the ground in practice – and don’t expect to anytime soon.
“Politicians are too often seen as ducking the big, politically difficult questions looming large on businesses’ risk register, like runway capacity and long-term road funding, rather than grasping the nettle.
“Where hard decisions have been taken on issues like energy, populist political rhetoric threatens to send us backwards. Just recently National Grid warned that spare capacity margins are at the lowest level in seven years, so building up investor confidence couldn’t be more important.
“We’re at a crossroads. The next government must build on the successful policies of this Parliament, but we also need to see bold thinking and a renewal of the politics of infrastructure, finding a new way to agree upon and then consistently deliver the improvements we’ll need over the next 50 years – not just the next five.
“The vast majority of businesses back the creation of an independent body to assess the UK’s long-term infrastructure needs. That 99% of firms think this would have helped the government make a more compelling case for HS2 demonstrates the powerful role a more independent voice could play.”
The full results of the survey can be viewed here.
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