Major policy decisions are looming in both transport and energy fields - decisions which will have important consequences for the future competitiveness of the UK economy. Transport and energy have both suffered lengthy periods of under-investment, leaving the UK struggling to cope with inadequate infrastructure. The shortcomings of the transport system are all too obvious in the increasing congestion and delays facing users of the road and rail networks, and similar constraints are starting to emerge in aviation and shipping too. As well as substantial new investment, rational pricing across all modes of transport is necessary if additional resources are to be deployed in the most effective manner, and to deal with transport’s major impact on the environment. The goals of achieving competitive, low carbon and secure energy supplies for the UK will be missed if government cannot meet its ambitious targets for renewable energy while failing to encourage private investment in new nuclear power stations.
Britain has enjoyed the benefits of liberalised energy markets for many years, but the same degree of competition does not exist in the rest of Europe. With growing UK dependence on continental European networks for the delivery of energy supplies, the need for a more competitive European energy market is vital to UK interests. The IoD supports the European Commission's liberalisation objectives, but would like to see more being done to reduce the pervasive use of long-term contracts which hinder free competition. Proposed targets for use of renewable energy sources are unrealistic and potentially damaging to competitiveness by unnecessarily raising the cost of energy. Read more>>
Cost and competitiveness should be at the heart of the UK’s energy policy, in addition to the objectives of seeking security of energy supply and pursuing a low carbon economy. Decisions about the UK’s future energy mix must be taken – and implemented - as a matter of urgency in order to give the maximum flexibility over future energy supplies. This requires a balanced energy policy that leaves room for a range of energy sources – including both new nuclear and renewables - based on what the market can deliver. Read more>>
The IoD clearly recognises that improving energy efficiency is an area where business activities and government climate change policies can move forward together. Improving energy efficiency reduces operating costs thereby contributing to improved business competitiveness. It also reduces carbon emissions and makes an active contribution to the UK government’s climate change commitments. The IoD also acknowledges that further improvements in energy efficiency can and need to be achieved and aims to help our members and UK business as a whole in the drive for greater energy efficiency. Read more>>
All modes of transport should be expected to cover their full environmental costs, preferably through the application of market instruments based on a global carbon price. The IoD therefore endorses aviation’s participation in the EU’s emissions trading scheme from 2012. Environmental targets should not be pursued through damaging regulations or by restricting much-needed capacity expansion, as this would have little impact on global emissions while undermining the competitiveness of the UK economy. Read more>>
Transport pricing should reflect the fundamental influences of demand and supply, varying by time of day and season of year where appropriate, and should reflect in full any external costs and benefits generated, such as pollution, congestion and wider economic gains. Current pricing arrangements on most modes of transport do not match this ideal, and policy should therefore seek to encourage convergence on economic pricing where it is feasible to do so. Price signals could then be used to drive decisions about where investment in additional capacity is likely to deliver the best returns. Read more>>
The economy is now reaping the legacy of decades of under-investment in the transport system in the form of increasing delays and congestion. It is therefore essential to provide more and better transport infrastructure in order to sustain the UK's competitiveness. Transport investment is one thing the government should be spending more on, and not less. Read more>>
IoD Policy exists to advance the case for business in Government, the media and other influential areas.
Policy Team