Member Article

London business leaders back HS2 despite division on infrastructure priorities

The majority (66 per cent) of business leaders in London and the South East believe that the planned high speed railway link between London and the North (HS2) will benefit British business, according to research announced today.

A report carried out by the BGF (British Growth Fund) found that 33 per cent of business leaders in the region believe that it would be better to start with the connections from the Northern cities to Birmingham, and then move on to London.

The second BGF Growth Climate Index polled BGF’s network of board-level directors and chairman with wide ranging experience across the spectrum of UK and international business, from senior business leaders of high growth small and mid-sized companies to FTSE 100 corporates.

Investment in infrastructure remains a top priority, but respondents in London and the South East were divided over whether this should be physical or digital. Nearly half (49 per cent) of respondents claim that improved roads, rail (local and high-speed) and airport expansion would benefit the businesses they work with, while the same number prioritise investment in high-speed broadband.

Nearly three quarters (74 per cent) of London and South East business leaders believe that building a third runway at Heathrow is good for British business, although almost half (48 per cent) think that increasing capacity, routes and flights at regional airports is equally or more important. The vast majority (85 per cent) of Southern business leaders are against the Government re-nationalising the railways.

Once again prospects for growth look bright but there were signs of growing caution among the London and South East business community. Over half (53 per cent) believe conditions for growth have improved over the last quarter while 49 per cent expect them to continue to grow over the next quarter. This marks a significant drop on the 82 per cent and 78 per cent who answered the same questions in June of this year, perhaps reflecting the recent slowdown in growth of GDP.

The skills gap remains an issue for London and South East business leaders, with recruiting and retaining the right talent cited as the biggest factor holding back business growth (31 per cent agreed with this). This was followed by instability in overseas markets (21 per cent) and macro-economic conditions (20 per cent) – suggesting that political and economic turmoil overseas, in Europe, the Middle East and Asia, is of growing concern among the business community.

Marion Bernard, BGF’s Regional Director for London and the South East said: “Small and medium sized businesses are the lifeblood of economy, bringing much needed jobs and prosperity, but they do depend on infrastructure to grow. Working with businesses across London and the South East, we see first-hand the importance of investing in world class infrastructure, combining big ticket projects such as HS2 and increasing airport capacity but also ongoing improvements to roads and online connectivity.

“Once again this index paints a positive picture of the UK growth climate where ambitious companies continue to thrive, but there are also concerns on the horizon. Political and economic instability overseas has leapfrogged access to finance as one of the top issues holding businesses back from growth, suggesting that the challenges of doing business in an interconnected world are increasingly front of mind for UK entrepreneurs.”

Keith Jordan, Chairman of Cennox said:“I welcome the Government’s planned boost to infrastructure spending. It is long overdue but will be positive for the country, particularly for the roads network. Challenges for businesses remain however, particularly for manufacturers in relation to Europe and the exchange rate. The skills shortage remains an issue, and this could have an impact on SME growth.”

This was posted in Bdaily's Members' News section by Ellen Forster .