HS2 value divides opinion among Northern business leaders

Investing in physical, rather than digital, infrastructure will be more beneficial to UK businesses, according to a survey of senior business leaders in the North of England carried out by BGF (Business Growth Fund).

69% of respondents believe that improved roads, rail and airport expansion would help the businesses they work with, compared to 31% who would prioritise investment in high speed broadband.

Despite this, the value of HS2 is still dividing opinion among Northern respondents.

The planned high speed railway that will link London with Birmingham and cities in the North West and Yorkshire is good for British businesses, according to half of business leaders in the North.

But 40% disagree, and one in 10 remaining undecided. Nationally, 60% of business leaders agree that the high speed railway will benefit British business.

In contrast to current plans, 60% in the North think it would be better to start with the connections from the Northern cities to Birmingham, and then introduce London routes, compared to the national average of 43%.

As for airport expansion, 71% of Northern business leaders believe that building a third runway at Heathrow is good for British business, although 60% thought that increasing capacity, routes and flights at regional airports is just as important.

90% of Northern business leaders are against Government re-nationalising the railways, compared to the national average of 83%.

Andy Gregory, regional director of North BGF, said: “Small and medium sized businesses are the lifeblood of the economy, bringing much needed jobs and prosperity, but they depend on infrastructure to grow. We can see from our latest index that businesses in the North, while united in recognising the importance of investing in physical infrastructure, want this investment to be evenly spread across the UK and bring direct benefits to the companies close to home.

“Once again this index paints a positive picture of the growth climate in the North of England, where ambitious companies continue to thrive, but there are also concerns on the horizon. Political and economic instability overseas – in Europe, the Middle East and Asia – has leapfrogged accessing the right skills as one of the top issues holding Northern businesses back from growth, suggesting that the challenges of doing business in an interconnected world are increasingly front of mind for these entrepreneurs.”

Edward Walsh, finance director at BGF-backed The Coaching Inn Group, added: “Investment in superfast broadband and cloud computing has been a good enabler of business. But, after years of underinvestment, what we have now in the UK is a legacy transport infrastructure that’s unable to cater to the demands of businesses. Improvement in roads and railways across the North will make quicker, easier and more efficient for people to do business.

“Our coaching inns, which cater to the corporate and leisure markets, have been performing well over the past few months, with high occupancy rates. This is one indication that business people are actively out there - meeting suppliers, partners and customers.”