A new report by leading thinktank Policy Exchange has concluded that traffic congestion is now endemic, affecting not just large cities but also the core motorway network and small towns.

It currently costs the UK economy in the region of £20bn per year, a figure set to rise significantly in the coming years, harming our future economic competitiveness and growth.

According to Towards Better Transport, which was produced in cooperation with Serco and Bevan Brittan LLP, the UK has the most crowded and congested roads, the fewest motorways, and some of the worst public transport among the leading industrialized countries.

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Each year more than 1.6 million passenger kilometres are travelled on each kilometre of Britain's road network - more than twice the European average.

The deficiencies of UK transport infrastructure do not reflect a shortage of tax revenues from transport. The report argues new roads have also tended to be built for political reasons rather than to tackle congestion.

Just 6 per cent of passenger travel is undertaken by train, compared with 84 per cent by car, yet the railways receive annual subsidies totalling almost £6.5 billion, nearly as much as the government spends on roads.

Policy Exchange's Chief Economist Dr Oliver Hartwich said: "Britain's transport infrastructure is, quite simply, not fit for purpose and unable to meet the needs of a modern country. Transport infrastructure investment has become detached from consumer demand."

The report also argues that simplifying the system and improving accountability would make transport investment considerably more attractive to potential investors, lowering finance costs and raising the quality of affordable schemes.

The research finds that relatively small charges on congestion hot-spots would soon pay for improvements.

(GK)