A FEW WEEKS AGO I said I would look at transport and the problems road congestion and overcrowded and unreliable public transport caused for the economy. The phone, metaphorically speaking, has not stopped ringing.

This is a subject many feel passionate about. There is much to say and I can only scratch the surface. If transport does not work, businesses struggle and our quality of life suffers. Nationally, according to official figures, we make 61 billion journeys a year, more than 1,000 a year for every person.

My feedback confirms the problem is most acute in regions with the biggest concentrations of population: the southeast, West Midlands and northwest. But many other areas also suffer unacceptable levels of delay and inadequate public transport.

Road congestion costs the economy an officially estimated £7 billion to £8 billion a year, according to the Department of Transport.

The government-commissioned transport study carried out by Sir Rod Eddington found that a 5% cut in travel time would save business £2.5 billion a year. Unofficial academic studies put the figure as high as £21 billion annually. I would not be surprised if even this was an underestimate. This is because, while it is possible to measure the direct effects of transport inadequacies, the indirect effects are harder to gauge.

One powerful strand of feedback related to the M4 corridor, an area of huge economic importance to Britain. International executives, it seems, are increasingly disenchanted with that location, the horrors of Heathrow being compounded by the stop-start motorway journey at the end of it. Nobody wants that after a long flight from California or, similarly, on the way to catch a plane.

Transport also features high on the list of gripes from businesses about London, again hugely important economically. Many of those footloose businesses that are not driven away by Darling’s clumsy nondom tax will, it seems, be persuaded to move by the capital’s transport failings.

One of the people I heard from was Peter Hendy, London’s transport commissioner under Ken Livingstone, the beleaguered mayor. He is honest in his appraisal of the situation.

The public-transport statistics, he says, give no impression of a city haemorrhaging people or suffering a downturn; bus-passenger journey numbers in January were up 6.1% on a year earlier; the Tube by 6.5%. The alarming overcrowding on the network is genuine. Investment in longer and more frequent trains and better signalling will help, but take time.

When it comes to roads, the prognosis is gloomier. He concedes that the central London congestion charge has not increased traffic speeds because other factors, notably digging up roads to replace old gas and water mains, have slowed them down. The best he can claim is that, without the charge, things would be worse.

A lack of joined-up thinking is built into the system. Transport for London controls only 5% of the capital’s roads, the strategic routes, with the rest the responsibility of the boroughs. If they do not coordinate their work, the result is chaos.

Hendy can offer no comfort on infamous traffic blackspots such as my bête noire, the Blackwall tunnel. Once the police introduced new safety restrictions, the transport authority was powerless to intervene. Things will not get better until there is another London river crossing, and that is not even on the drawing board.

Across the country there are problems like this. Dual carriageways end abruptly and become low-speed, single carriageways. Dreadful bottlenecks result when motorway traffic joins a road like the A14 in Cambridgeshire, or where there is no motorway at all, such as the A11, also in East Anglia.

Diagnosis of the problem is easy. For decades Britain underinvested in roads and transport generally. We have the worst of both worlds, inadequate road capacity and poor public transport. Last week Network Rail was fined £14m for taking out vital bits of the network over the Christmas and new-year travel period. Road users pay £32 billion a year in tax but only £8 billion of that is spent on improving and maintaining the system.

What’s the solution? The first part, recommended by Eddington, is to tackle obvious bottlenecks in the system, where a small amount of investment will go a long way.

The government published a response to Eddington last autumn, and a green paper is promised this spring, but I don’t hold out much hope. In the end, the answer is much more investment, in public transport and the roads.

A recent report from Policy Exchange, the think tank, Towards Better Transport, made a convincing case for building new motorway links first, through PFI (private finance initiative) projects, then introducing charging on them. It stated: “Travellers would then see clear evidence of the direct benefits of road-user charging and understand that a significant share of future revenues was being spent on transport rather than being absorbed by the Treasury for general expenditure.”

The closest you get to French-style motorway nirvana in Britain is the M6 toll road, though it isn’t cheap. It is a scandal that it remains unique, 25 years after it was first mooted.

If there is clear government policy on road-pricing, apart from leaving it to local authorities, it is hard to detect. People and businesses would be prepared to pay for congestion-free journeys. That is the long-term solution to a genuine and growing problem for Britain’s economy. Allow the private sector to build more motorways, and to charge for them. Otherwise, the economy will jam up.

PS: Despite a 0.5% drop in house prices and evidence from the CBI that February was a struggle for retailers, this does not seem like a month when the Bank of England’s monetary policy committee should or will cut interest rates. I still think in terms of May for the next one.

The “shadow” monetary policy committee (SMPC), which meets under the auspices of the Institute of Economic Affairs, agrees. It votes seven-two to keep Bank rate on hold at 5.25% this month. The two dissenters, Patrick Minford and Peter Warburton, favoured a modest quarter-point reduction, though also had a “bias” to ease further.

Two of those on hold, Ruth Lea and Peter Spencer, were inclined towards further cuts. Another, Gordon Pepper, an old City hand, warned that the Bank may be forced to cut aggressively to head off the effects of the credit crisis.

As for the other SMPC members, Trevor Williams, Kent Matthews and Andrew Lilico all had a neutral bias, while my near namesake David B Smith, committee chairman, thinks the next move should be to tighten policy.

We are still in a “phoney war”. Warnings about the impact of the credit crisis have come thick and fast. The UK banks’ reporting season was, however, quite reassuring despite overblown stock-market reaction, and the economic numbers, so far, are holding up.

That is true, though figures for gross domestic product in the final quarter showed clear slowdown signs. Growth was unrevised at 0.6% but consumer spending rose only 0.2%, and the GDP rise was supported by a big rise in inventories. Weakness lies ahead.

david.smith@sunday-times.co.uk

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