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The Channel Tunnel Rail Link: Opportunities and Problems for Regional Economic Development

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THE CHANNEL TUNNEL RAIL LINK: OPPORTUNITIES AND PROBLEMS FOR REGIONAL ECONOMIC DEVELOPMENT, David Matthew Smith Thesis Submitted to the University of Plymouth in Partial Fulfilment of the Requirements for the Degree of Doctor of Philosophy Department of Geographical Sciences University of Plymouth December 1992 THE CHANNEL TUNNEL RAIL LINK: OPPORTUNITIES AND PROBLEMS FOR REGIONAL ECONOMIC DEVELOPMENT. David Matthew Smith ABSTRACT The regional economic impact of the Channel Tunnel has engendered much public and private sector interest. Previous studies examining the regional implications of the Tunnel have argued that related development pressures will be largely confined to South East England, further widening the "North-South" divide. Economic Potential Analysis was earlier employed by Clark el. al. (1969) and Keeble et. al. (1982a) to model the geographical impact of the Tunnel on the relative accessibility of the UK regions. The conclusions drawn from these studies support the proposition that the South East would gain at the expense of the more peripheral regions. However, the important implications of a rail-only Tunnel have yet to be modelled. The results of the present study show that opportunities created by the Tunnel could be spread more evenly than had previously been predicted. However, following a review of the legislative and policy environment of the Tunnel and related infrastructure, it is argued that as a result of British Government inaction the more peripheral UK regions are likely to be unable to maximise any potential benefits created. Nonetheless, the overall regional economic impact of the Tunnel will depend ultimately on the reactions of the business community (Pieda 1989a&b). The findings of a questionnaire survey carried out for this thesis reveal a considerable degree of similarity in perceptions and anticipated usage of the Tunnel for companies in the South East and South West, including the "Far South West". If this similarity is apparent after the Tunnel opens, the regional economic structure of the UK might only be marginally affected. ' " " * ' 90 0164125 0 !1 UNIVERSITY OF PLYMOUTH LIBRARY SERVICES Item No. Class /( 1^s.^\n 5MX No. Conti No. Y.-io;::>-io6.u.?.S ACKNOWLEDGEMENTS For making this project possible and the continual support, I would first like to thank Richard Gibb. Without his relaxed approach to supervision and the "occasional" constructive criticisms (expand is a word that comes to mind!), it is unlikely that this thesis would have progressed so far. For the frequent words of encouragement and his dedication towards the end, I would also like to thank Mark Wise, Furthermore, for his excellent cartography I wish to acknowledge Tim Abslom. The University of Plymouth and the ERASMUS programme are acknowledged for their financial support. Thanks also to my fellow postgraduates in the Department of Geographical Sciences, as well as Adrian Holmes for his computing expertise. I would also like to thank my family and future in-laws for all their all their support, financial or otherwise. Finally, I wish to thank Michelle for her love and confidence. CONTENTS Page Number CHAPTER 1: INTRODUCTION 1 1.1. Aims and Objectives 1 1.2. The Channel Tunnel Project 2 1.2.1. The History of the Fixed Channel Link 3 1.2.2. The Present Scheme 6 1.3. The Scope of the Study 14 1.4. Research Philosophy 20 1.4.1. The Positivist Approach 20 1.4.2. The Humanistic Approach 21 1.5. Research Methodology 22 CHAPTER 2: THE LITERATURE REVIEW 25 2.1, The National Economic Impact 26 2.1.1. The Opponunities 26 2.1.2. The Problems 29 - The opportunity cost 29 - Who benefits and how? 30 - Supporting transpon infrastructure 32 2.2. The Regional Economic Impact 33 2.2.1. The Potential Impact on the South East 34 - Constrained optimism 35 - The continental threat 39 - A direct link to the Continent 40 - The tourist trade 42 - The South East: a summary 43 2.2.2. The Potential Impact on the "North" 44 - Rail links to the "North" 44 - The landbridge market 49 Page Number CHAPTER 2 (CONT'D): - The short-term impact 51 - The "double-edged sword" 52 - The "Third Market" impact 54 - The "Nonh": a summary 55 2.3. Conclusion 55 CHAPTER 3: ECONOMIC POTENTIAL ANALYSIS 60 3.1. Aim of the Mode! 60 3.2. Economic Potential 62 3.3. Keeble, Owens and Thompson's 1982 study - 64 'Economic Potential and the Channel Tunnel' 3.4. Methodology 65 3.4.1. The Scope of the Model or 'Universe' 66 3.4.2. The Mass Mj Term 68 3.4.3. The Distance Dij Term 69 3.4.4. The Distance Exponent 71 3.4.5. Self Potential 72 3.5. Regional Accessibility within the EC 73 3.6. Analysis of the Results 80 3.6.1. Simulation 1 81 3.6.2. Simulations 2 and 3 90 3.7. Critique 96 3.8. Conclusion 98 CHAPTER 4: THE LEGISLATIVE AND POLICY FRAMEWORK 101 4.L Introduction 101 4.2. The Tunnel and Government Policy 103 4.2.1. The Pre-Selection Stage: the politics of rival schemes 104 Page Number CHAPTER 4 (CONT'D): 4.2.2. The Parliamentary Stage: a Hybrid Bill 107 4.2.3. The 1987 Channel Tunnel Act: implications for the UK 111 4.2.4. Overall Tunnel Philosophy 113 4.3. The High-Speed Rail Link 114 4.3.1. The Recent History 115 4.3.2. *Wider Considerations* Lead lo a Further Delay 118 4.4. Post 1979 Railway Policy: implications for international 124 rail services 4.4.1, Financing of the Railways in the 1980s 125 4.4.2. Full-Scale Privatisation or ^Creeping Denationalization' 129 4.5. British Uncertainty Versus French Optimism 131 4.5.1. French Policy-Making for the Tunnel 132 4.5.2. The French (and Belgian) High-Speed Rail Network 135 4.5.3. European Community Policy on High-Speed Rail Travel 140 4.6. Conclusion 143 CHAPTER 5: THE QUESTIONNAIRE SURVEY 145 5.1. Objectives of the Survey 145 5.2. The Methodology and Scope of the Survey 146 5.3. The Questionnaire 148 5.4. The Response Rate 150 5.5. Analysis of the Results 158 5.5.1. Company Details 159 5.5.2. The Perceived Impact of the Tunnel 163 - Impact on company location 165 - Impact on company competitiveness: 167 increased accessibility to markets - Impact on company competitiveness: 170 vulnerability to increased competition Page Number CHAPTER 5 (CONT'D); - Tunnel usage and company perceptions 172 - Comparison of the results with the LCCI (1989), 173 BR and Eurotunnel (1988) surveys - A migration of industry? 175 - Company perceptions: a summary 176 5.5.3. Potential Usage of the Tunnel 177 - The business trip market 179 Comparative findings 179 The current cross-Channel market 183 The estimated future usage of the Tunnel 188 Factors likely to influence planned Tunnel usage 189 - The freight market 191 Comparative findings 191 The current cross-Channel market 193 The estimated future usage of the Tunnel 193 Factors likely to influence planned Tunnel usage 195 197 - Anticipated Tunnel usage: a summary 198 5.5.4. Wider Considerations 201 5.6. Conclusion CHAPTER 6: A COMPARATIVE ANALYSIS OF THE 206 QUESTIONNAIRE RESULTS 6.1. Regional Analysis 206 6.1.1. The Regional Company Base 207 6.1.2. Perceptions of "Peripherality" or "insulation" 215 - The Tunnel and company location 215 - Regional competitiveness: 219 increased accessibility to markets Page Number CHAPTER 6 (CONT'D) - Regional competitiveness: 221 vulnerability to increased competition - The threat of company relocations 223 - Regional perceptions: a summary 223 6.1.3. Planned Usage of the Tunnel and its Services 224 - The business trip market 225 The attraction of the Tunnel 225 The current cross-Channel market 227 Factors influencing company plans 233 - The freight market 235 The attraction of the Tunnel 235 The current cross-Channel market 238 Factors influencing company plans 239 6.1.4. A South East Bias? 241 6.2. Conclusion 245 CHAPTER 7: THE HOMOGENEOUS SOUTH EAST - 247 THE QUESTION OF EAST KENT 7.1. Introduction 248 7.2. The Short-Term Impact 250 7.2. J. Local TML Recruitment 250 7.2.2. The Local Orientation of Construction Conu^cts 254 7.3. The Medium-Term Impact 256 7.3.1. The Net Employment Implications 256 7.3.2. A Complete Collapse of the Short-Sea Ferry Industry? 259 - Market size and patronage levels 260 - Market structure 262 7.3.3. The proposed Merger of P&O and Sealink 265 7.4. The Long-Term Impact 267 Page Number CHAPTER 7 (CONT'D): 7.4.1. The Kent Impact Study: 1991 Review 267 - Employment implications for the county 270 - Employment implications for East Kent 273 7.4.2. The Theoretical Perspective 277 7.4.3. Nord-Pas de Calais 281 7.4.4. The Tourism Industry 283 7.5. Summary and Conclusion 285 CHAPTER 8: THE FAR SOUTH WEST" (DEVON & CORNWALL) 288 8.1. The Long-Sea Ferry Industry 290 8.1.1. Existing Ferry Services 290 8.1.2. The Post-Tunnel Western Channel 296 8.1.3. A Westward Redeployment of Ferry Services? 298 8.2. Transport Links to the Far South West 299 8.2.1. International Rail Services 299 8.2.2. Road Links to the Tunnel 304 8.2.3. An Inadequate Transport Network: a summary 305 8.3. Regional Implications 306 8.3.1. Local Industry 306 8.3.2. The Tourism Industry 312 8.3.3. The "Third Market" Impact 315 8.4. Conclusion 317 CHAPTER 9: SUMMARY AND CONCLUSIONS 319 9.1. Summary of the Results 319 9.1.1. Improved Accessibility to the Periphery? 321 9.1.2.
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