Written evidence from the City of London
Corporation (TE 102)
INTRODUCTION
1. The City of London's leading position as an
international finance and business centre is heavily dependent
on it being easily accessible not only from across the UK but,
crucially, also from all over the world. To maintain London's
position as the leading global centre for financial services,
the City would encourage further investment in the capital's transport
infrastructure. London accounts for 19% of national GDP, and 15%
of jobs. While the City Corporation is not in a position to respond
to all the areas being covered by the Committee's inquiry, it
welcomes the opportunity to highlight the economic importance
of having an efficient, high-quality multi-modal transport infrastructure.
Comments are focused particularly on rail, in particular Crossrail,
the Tube upgrade, and aviation.
RAIL
2. The City is served by two distinct rail systems
- the national rail system, which operates both shorter distance
commuter services as well as sub-regional services from across
the south east, and the London Underground. The City has five
mainline termini (Liverpool Street, Fenchurch Street, Cannon Street,
Blackfriars and Moorgate), and a through station at City Thameslink.
Farringdon, London Bridge and Waterloo stations are also of importance
to the City, lying just outside the Square Mile. The City benefits
from 15 Underground stations serving seven different lines within
or close to the City boundary, including the major interchange
at Bank.
3. The number of people employed in the City
of London is set to grow to 400,000 by 2016. It is therefore crucial
that rail capacity keeps pace with forecast growth. Over 80% of
City workers commute by rail, clearly demonstrating the importance
of the rail network to the economy of both London and the UK.
4. If no additional capacity was added to the
transport network in the medium-term, overcrowding would worsen
significantly, to the point where current and potential investors
in London may begin to focus their resources elsewhere. The Corporation
therefore supports the improvement of rail services both in quantity
and quality, with the primary concern remaining the provision
of improved peak period commuter services. Action is required
to modernise and upgrade the existing rail network, and also to
support the implementation of new schemes such as Crossrail and
Thameslink.
Crossrail
5. It is widely known that the City has a particular
interest in the successful delivery of Crossrail. The importance
of creating a direct link between the City and Heathrow airport,
as well as easing pressure on the central-area of the Underground
system cannot be underestimated. It will directly connect three
major centres of employment - Canary Wharf, the City and the West
End - and will bring approximately 1.5 million people within an
hour's commute of central London. The direct, high frequency link
to Heathrow airport is something which has been identified by
a majority of City businesses as being important to their operations.
Crossrail will add 10% to London's overall transport capacity,
and will contribute to reduced levels of overcrowding on the London
Underground and other National Rail routes, most notably the Central
line and the inner Great Eastern Main Line.
6. London must maintain its competitiveness versus
other financial centres, (e.g. New York, Hong Kong, Tokyo, Singapore
and many other competing cities) all of which have major rail
investment programmes. In addition, the delivery of further UK
high speed rail will be at risk without Crossrail. The favoured
option of a high speed terminus at Euston is dependent upon the
diversion of some West Coast Main Line commuter services onto
Crossrail to free up capacity for high speed trains. A similar
consideration applies were the high-speed train proposals to be
centred on a Heathrow Hub development as an alternative to a third
runway.
7. As well as the direct transport benefits of
Crossrail, the economic benefits to both London and the wider
UK economy are substantial. In London, there is expected to be
an economic boost of £1.24 billion annually across all London's
boroughs. On a national level, Crossrail is expected to provide
at least £36.24 billion worth of benefits to national GDP
over a 60 year period[309].
8. In addition to the direct economic benefits
of Crossrail, there is also the potential for indirect benefits
of creating employment. At the peak of construction, the project
will employ up to 14,000 people, and Crossrail have committed
to establish a National Skills Training Academy, providing an
opportunity to support the skills development of those building
the project. These skills will provide benefits long after the
construction of Crossrail is complete.
The Tube Upgrade
9. Crossrail alone, however, will be insufficient
to meet the demands placed on London's transport network. The
London Plan estimates that the population of London will increase
by 1 million by 2026. Despite a slight dip in passenger numbers
in 2009-10, the London Underground carried over one billion passengers
for the fourth year in succession[310].
In the long term, demand is forecast to continue to grow by around
25% to 2025, and demand across the wider transport system is forecast
to continue to grow to 2026, with the recently-published Mayor's
Transport Strategy showing that, by 2031, some parts of the transport
network (including some central sections of Crossrail) will continue
to face severe overcrowding. It is therefore crucial that the
Tube upgrade programme is delivered to complement Crossrail.
10. The additional capacity that will be realised
by the upgrade programme is vital. Without it, the current network
will come under increasing strain and could become more unreliable
as the system starts to become more and more overcrowded. According
to London Underground, by 2026, without the upgrade overcrowding
would increase by 40% and capacity would decrease by 30%[311].
Such a situation is unsustainable if London's economic recovery
and growth are to be supported, and the Tube investment programme
is therefore critical to both.
11. The Tube upgrade programme will produce £30.5
billion of direct benefits to users as a result of time savings
and improved travel conditions. It will also generate wider economic
benefits for the UK in the order of £23.5 billion of additional
GDP. Total benefits of £54 billion, are expected to flow
beyond London to the rest of the UK[312].
12. The case for both the Crossrail and the Tube
upgrade is clear and compelling. However, equally clear is the
significant erosion of benefits resulting from one being taken
forward without the other, or of one being scaled back. It is
therefore vital that both Crossrail and the Tube upgrade programme
are delivered in full, to ensure that London continues to recover
from the economic downturn and is capable of transporting growing
numbers of passengers, and the full contribution to the UK economy
is realised.
AVIATION
13. The City Corporation acknowledges that the
Government's stance on airport expansion as set out in the Coalition
agreement is very different to that proposed by the previous administration
and accepts that there will be no expansion at Heathrow, Gatwick
or Stansted for at least the course of this Parliament. Aviation
services however remain crucial to the well being of London and
the UK economy, and the City welcomes the creation of the South
East Airports Task Force to consider options for improving services.
The City Corporation is currently in the process of commissioning
research into aviation in light of the Coalition's policy statement
and to build on the previous City-backed studies set out below.
This new piece of work is expected to be available later this
year in order to feed into the South East Airports Task Force.
14. The City Corporation first commissioned research
into the importance of aviation in 2002. The study[313]
identified that the provision of air services in London that would
compete with and outperform services available in other financial
centres are essential if London is to remain globally competitive.
This was updated by a further study by published in July 2008[314]
which looked more at the extent to which City businesses relied
on air travel. Although it did not go as far as placing a monetary
figure on the value of aviation to the UK economy, this research
demonstrated that, at the time, 64% of businesses regarded air
travel as critical or very important for internal company purposes,
and that 73% considered aviation critical or very important for
meeting external clients or service providers. In addition, 82%
of businesses regarded Heathrow as critical or very important
to their operations, making it the most highly-valued airport
in the South East by some margin. This was largely attributed
to the wide range of destinations served and the frequency of
the service. The research concluded that that this hub airport
plays a key role in the functionality of the financial services
industry in the UK.
15. The 2008 report concluded that, in recent
years, Heathrow had stagnated and lost some of its market share
to European competitors. This is reflected in the fact that, while
the frequency of services from Heathrow rose between 2003 and
2008, the number of destinations to which it provided air services
declined and, in comparison with other major European hub airports
where additional runways have been built to meet rising demand,
the rate of expansion has been noticeably slower. Furthermore,
50% of businesses surveyed regarded road and rail access to London's
airports as worse than that of airports in other major cities.
16. Whilst recognising the importance of Heathrow
to London's business community, both pieces of research highlighted
major weaknesses in the airport's management. The 2002 report
indicated that there was real concern about time wasted at airports
waiting for security checks. While the importance of good security
measures is understood, it is expensive for companies to have
staff unable to work because of overly-long airport security processes.
The 2008 report also identified that inefficient security procedures
led to passenger delays and also prevented many flights leaving
Heathrow at the time scheduled. The City Corporation therefore
welcomes the inclusion in the Taskforce's terms of reference of
consideration of "options for making best use of [existing]
capacity, including scope for improving airport efficiency, reducing
delays, greater reliability and enhancing the passenger experience
to, from and within the airport, whilst having regard to the local
environmental implications of any measures".
October 2010
309 The Economic Benefits of Crossrail, Colin
Buchanan & Partners, 2007. Back
310
PPP & Performance report 2009-10, London Underground,
2010. Back
311
LU. London's Upgrade. Our City is Evolving. So is our Underground,
Transport for London, 2010. Back
312
Holding the Line; the economic benefits of modernising the
Tube, London First, 2009. Back
313 "The
Use of Aviation Services in the City of London and the Central
London Business District and the Implications for Future Aviation
Policy", Oxford Economic
Forecasting, published by the City of London Corporation, December
2002. Back
314
"Aviation Services and the City", York Aviation,
published by the City of London Corporation, July 2008. Back
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