Powering Up The Engines

Powering Up The Engines
Investing in regional infrastructure
to drive UK growth

2 3
The Channel Group www.thechannelgroup.org
The Channel Group is an independent think tank
established to champion Free Trade
We collaborate with leading thinkers to promulgate a vision of international
free trade, the breaking down of trade barriers and the ending of internal
protectionist measures. Through rigorous independent research and insightful
comment, The Channel Group informs debate and develops policy.
The Channel Group was founded in 2015 by three partners with experience in
politics, law and finance. The partners came together to create a strong voice for
international free trade.
The Channel Group will:
• Serve as an independent expert in international trade;
• Work with governments and regulators to remove barriers to trade;
• Champion business interests and support free trade;
• Educate the public on trade issues.
Toby Illingworth
Partner
Daniel Campbell
Partner
Thomas Dempster
Partner
www.thechannelgroup.org

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Businesses have traditionally expanded
more easily and efficiently when there
has been a good level of investment in
supporting infrastructure. From canals
to airports, the methods by which
goods and services are transported has
been key to growing British trade and
the economy.
Britain has a long history of being
able to conduct business by using well
maintained infrastructure, but in recent
decades investment in infrastructure
has slowed. The once pioneering rail
network has not been updated since
Victorian times.
This paper will explore the
infrastructure investment decisions
that have been made recently and
the next projects that will bring the
greatest benefit to businesses.
London has been the primary
beneficiary of investments in
traditional infrastructure projects.
Large-scale projects such as Crossrail,
extensions to the underground
network and significant road
improvements have created an unequal
playing field for regional cities. The
Channel Group would like to see a re-
balancing of the British economy away
from London. This decentralisation is
not only beneficial to the regions, but
also to businesses and consumers.
Large organisations have already
moved many non-key services out of
their London bases and this has been
followed by head offices and front-line
services.
Foreword
Later in 2016, the Government will
decide whether Gatwick or Heathrow
should be expanded. The Channel
Group believes that the UK needs
to move away from having a single
hub airport, and that regional growth
centres should be internationally
connected themselves. Expansion
at Gatwick is essential to ensure
competition. It is the only option for
expansion that does not undermine
regional growth. Gatwick can meet the
point-to-point demand and keep the
London economy directly connected to
international markets. To that end, we
recommend expansion at Gatwick.
Regional infrastructure expansion
is at the heart of stronger growth in
the UK. The Channel Group believes
that the future of infrastructure
investment needs to move away from
London as a business hub. Investment
should be made in a series of regional
growth centres, comprising of clusters
of cities with excellent national and
international transport links. This
pattern of regional growth centres will
distribute the economic benefits of
trade more widely across the UK and
will allow a greater proportion of UK
businesses to enter the national and
international markets.

6 7
This paper identifies three
main areas of focus for
infrastructure spending to
help boost its trade growth:

Executive SummaryContents
Chapter
Executive Summary
Introduction
Investing in infrastructure pays off
Future Growth
Global trade patterns in 2050
Connected regions
Six key regions for regional growth
London and Beyond
The UK as a mega region
Regional Connectivity
Road & Rail
What regions need
Air
Rail
Freight
Maritime
Conclusion
Key regions in focus
Birmingham
London & the South East
Edinburgh
The Northern Powerhouse
Newcastle
Bristol & Cardiff
1
2
3
Make key UK city regions the engines of
growth
Focusing investment in two or three key
city regions - most notably the ‘Northern
Powerhouse’ and the Greater London region
- and treating them as coherent economic
clusters should be a priority. Building better
links between these regions matters too.
This approach will drive faster overall growth
and give a much better return than letting
every UK city and town argue the case for
funding its own particular and disjointed
infrastructure wish lists.
A focus on global growth
To meet its potential the UK must connect
to the global economy, which is set to grow
dramatically in the coming decades. It must
focus its attention on enabling more business
with the areas of greatest growth, principally
southeast Asia.

More and better global air links
Better and more flexible, international air
links will boost the UK’s trade performance.
Without frequent links to global mega-
regions Britain's economy will not grow to
its potential. We recommend the expansion
plans begin at Gatwick immediately to avoid
further delay and uncertainty.
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International trade is the lifeblood
of the UK’s wealth and has been
for centuries. Today its economy is
vibrant and diverse thanks to it being
an integral part of the global trading
system.
Trade brings jobs, wealth, innovation
and the taxes that fund a modern
society. Infrastructure is a key enabler
of deeper, more valuable trade ties.
Therefore, the UK must spend wisely
to increase its ability to trade with the
world.

This is a good news story. World trade
is set to explode in the coming decades
and the UK has a golden chance to
benefit from this growth, but only if it
creates the wherewithal to do so.
The UK is already a year into a five-
year plan to invest £100 billion in
infrastructure by 20201
, much of it
transport related. This is just a fraction
of the total it will need to spend,
however, if it is to realise its full trade
potential.

It is the view of the Channel Group
that the UK must do much more and be
far more ambitious. Infrastructure is
clearly fundamental for UK growth yet
its investment record is a poor one.
The UK needs to invest £400 billion to
deliver all the infrastructure projects
planned by the UK government to
2020 and much more beyond 2020.
For example, London’s transport alone
needs £973 billion by 2050 to keep up
with its rising residential and working
populations2
.
Infrastructure is a huge topic, and
defining it can include many different
areas including health services,
schools, utilities and energy. Important
though these are, the focus of this
study is to ask what infrastructure
projects will directly boost deeper
trade ties and offer UK businesses,
of all sizes, the chance to grow their
business with the rest of the world.

The purpose of this paper is to ask
and propose answers to this question:
What infrastructure should the UK
make sure it invests in beyond 2020
to realise the greatest and most
rapid growth in trade levels in the
subsequent 20 years?
Introduction
1
HM Government, National
Infrastructure Commission: terms of
reference, (2015)
2
Mayor of London, London
Infrastructure Plan 2050, (2015).
Investing in
infrastructure
pays off
+5%
How UK GDP would
have grown on average
annually from 2000-
2010 if infrastructure
had matched other global
economies.6
The UK is spending less than
it used to on infrastructure.
In 1950 it spent £1 in every
£8 on infrastructure.Todayit
spends just £1 in every £30.
UK businesses urgently need better
transport infrastructure:3
• 91% want a new runway for the
South East
• 81% see rail as crucial to their
operations
• 96% are concerned about
congestion on Britain’s roads
• 89% see investment in motorways
and local roads as crucial or
beneficial
28
The UK’s ranking
for overall quality of
infrastructure, behind
France, Japan, the United
States, Canada, and
Scandinavia.4
£300bn
The predicted annual
cost of traffic jams
in the UK by 2030
without adequate road
investment.5
3
CBI, Turning momentum
into delivery: CBI/AECOM
infrastructure survey 2015,
(2015)
4
Cebr/CECA, Securing
our economy: The case for
infrastructure, (2013)
5
INRIX/Centre for Economics
and Business Research, The
Future Impact of Congestion in
the UK
6
Association for Consultancy
and Engineering, Investment
in smart infrastructure requires
shift towards “disruptive” business
models, (2015)
Sources: CBI, INTRIX, Cebr, Infrastructure Intelligence

10 11
The global trade opportunity for the
UK is huge. Research for HSBC by
Oxford Economics forecasts a “third
wave of globalisation” that will see total
global goods exports reach US$68.5
trillion by 2050, nearly four times the
value of global exports in 2015.1

The march of industrialisation will
continue, while the costs of trade will
drop sharply and new markets will
open up thanks to changes in trade
policy. Technology will also drive rapid
change, creating new products and
business models. Crucially for strongly
service-centric economies like the UK,
trade flows will increasingly relate to
the movement of services rather than
products.
Mature economies, such as the UK,
which are faced with higher costs, will
continue their move towards higher-
value-added manufacturing. This is
in response to the increasing global
demand for higher-quality and more
personalised products.

Tariffs and other barriers to trade
will continue to fall. In addition to the
Trans-Pacific Partnership, further
mega-regional trade agreements will
be eventually concluded. These include
TTIP, the proposed bilateral agreement
between the European Union and USA.
RCEP, the Regional Comprehensive
Economic Partnership, is a key trade
deal specifically for New Zealand,
which will enable it to access the area's
3 billion inhabitants. The incorporation
of the existing ASEAN trade area into
RCEP gives the entire region a great
opportunity to grow trade.
Key to their success will be providing
the supportive environment that
will help businesses, including
infrastructure upgrades and strong
international transport links. One
such environment that China is
backing centres on cross-continental
cooperation. China is planning to
build a new Silk Road across a large
part of the northern hemisphere. This
monumental task has already received
funding from the Chinese government
and will run an estimated 9,000km
through Russia and northern Europe.
The thinking behind President Xi
Jinping’s plan is that it takes nearly
double the amount of time by sea to
Europe than it does rail. Cutting the
transit time will allow better access
for Chinese businesses into European
markets.
A growing middle class in international
markets will create greater demand for
goods and services across the world.
The UK must be able to meet demand,
wherever it should come from. The
BRIC economies are leading a surge
in infrastructure development and
the UK must keep pace in order to
remain competitive in an increasingly
competitive world.
Future Growth
Global trade patterns will
look very different by 20503
3bn
New members of the
middle class by 2050,
most in new markets.
The centre of gravity of
global trade is shifting
eastwards towards Asia
Small and medium firms will be play a
bigger part in global trade:
• Businesses will be part of a global
connection of agile, specialist
micro-multinationals
• Physical borders will become less
important and how we define trade
will change
• Asia’s share of global exports is
predicted to reach 46% in 2050
×4
Total global exports will
reach US$68.5 trillion by
2050, four times those of
2015.
3
HSBC, Global Connections
November 2015
17
The number of new
runways in China by
2036. New airports
will flourish in new
economies.
1
November 2015
2
Infrastructure Plan 2050, (2015).

12 13
Cities are the economic “growth
machines of the 21st century”,
powered by diverse and “self-
reinforcing networks of knowledge,
suppliers and support,” says economist
Richard Florida2
. The top 600 urban
centres in the world contain just one
fifth of global population but create
around half of global GDP.3

The reasons for this include the
fact that specialisation is greater,
competition and economies of scale
increase, and ideas and innovation
spread faster in cities. City regions’
also foster face-to-face contact in high
value, technology-intensive economies
and help cultivate global production
chains.

City regions succeed because
success does not just lie in innovative
companies, it is also rooted in the
clustering of their supply ‘ecosystems’.
The UK must fully harness this link
between the success of city regions and
growth.
If UK firms are to remain or become
leading innovators in technologically
complex products and services the
links within key city regions must be
improved, including airports and new
rail lines.

Infrastructure development and a
growing regional economy go hand
in hand; the physical components
of interrelated systems providing
commodities and services are essential
to enable, sustain, or enhance societal
living conditions. Applying this
principle to the regions of the UK,
some of the major components that
require improvement can be identified:
better connectivity between regional
growth centres, a decentralisation of
the economy, and further investment
in key infrastructure projects in each of
the city regions.
Connected regions
London and beyond

The City Growth Commission4
identifies six key ‘powerhouse’ super
city regions:
• London & the South East
• Greater Manchester, West
Yorkshire, South Yorkshire and
Merseyside
• The Midlands and Leicester
• Glasgow and Edinburgh
• Tyne and Wear and Tees Valley
• Bristol and Cardiff
London’s connectivity to other global
mega-regions remains an important
factor in the UK’s growth prospects
thanks to an “accelerating dynamic”
of ever growing links between global
financial centres with London at its
heart, says Florida.

Agglomeration effects for industries
outside the financial sector are crucial
and so matter beyond London too.
“Sustainable UK growth will rely
increasingly on our major cities doing
for the North West, North East, West
Yorkshire and Midlands what London
does for the South East– driving
investment” says the 2014 City
Growth Commission report.5

Better infrastructure drives such
agglomeration effects and supply-
chain-driven productivity gains. Much
of the knowledge economy thrives
in cities, promoting new ideas and
innovation and they rely on good
transport links to connect businesses
to each other.
The City Growth Commission notes
that “Without effective, integrated
transport connectivity, cities limit the
size of their labour markets, risk the
competitiveness of their businesses
in connecting to trading partners,
and undermine the ability of people
to access public services and build
social capital. The UK currently loses
billions of pounds every year as a result
“In a modern, knowledge-based economy, city
size matters like never before thanks to deep
pools of human capital. There is a powerful
correlation between the size of a city and the
productivity of its inhabitants.”

Chancellor of the Exchequer, Rt Hon. George Osborne MP

Edinburgh
Newcastle
Manchester
Birmingham
Bristol
London & the
South East
Six key cities for regional growth
1
Chancellor of the Exchequer,
Building a Northern Powerhouse,
(2015)
2
Richard Florida, The Rise of the
Mega-Region, (2007)
3
McKinsey & Company
4, 5
The RSA City Growth Commission,
Unleashing Metro Growth, (2014)
2.3
6.6
2.5
6.8
1.1
7.9 Stansted
7.9 Heathrow
5.9 Gatwick
Catchment population (million)

14 15
of congestion and poor connections
between cities.”1

In the case of advanced manufacturing
in particular, location affects how
businesses pool skills, exchange ideas
and innovate new products. This effect
is felt when manufacturing firms are
located close to their research and
development, but also to suppliers and
competitors.
This is partly because technical
knowledge developed in the
early phases of the research and
development cycle is tacit in nature,
says the City Growth Commission.
“As a result, person-to- person
interactions are critical to advancing
and transferring such knowledge...
the supply chain is the key unit of
analysis for understanding these
interdependencies.”2

Birmingham
Improving rail links will also benefit
Birmingham. HS2 will not only benefit
the cities of the north. Properly
exploited, it will drive economic growth
and prosperity across the Midlands,
bringing or securing 104,000 jobs.6
HS2 could also release significant
capacity on the existing mainline and
regional rail networks offering options
to improve and optimise rail and road
accessibility across the Midlands.
The total cost to form the core of
this Midlands Engine is estimated to
be a relatively modest £3bn.6
To fully
exploit HS2, a range of infrastructure
investments to join the city’s metro
area and the network of smaller Black
Country towns and cities must be
made:
• Extend the Birmingham metro
• Develop the interchange at UK
Central with a well-connected and
integrated HS2 interchange
• Include supporting local sustainable
connectivity to the Interchange
from other surrounding areas
The Midlands Engine
Birmingham has been identified as the
perfect Midlands Engine. Birmingham
has increased in size since 2004
estimated as growing by 100,000 in
population by 2014.3
Birmingham Airport has been looking
at ways to accommodate this growing
demand. With plenty of capacity and
with a significant catchment area, it
is well placed to offer flights to both
Europe and worldwide.
Large businesses are taking advantage
of the benefits of the Midlands Engine;
last year HSBC announced that it is
to move its head office for its retail
and business lending operation from
London to Birmingham, moving 1,000
jobs to the Midlands.5
Deutsche Bank
has also expanded its operations in
Birmingham; it now has 1,500 people
based there, in both front and back
office capacities. Figures from 2013 put
Birmingham on a par with Manchester
in terms of Gross Value Added to the
greater metropolitan area.4
1, 2
The RSA City Growth
Commission
3
Birmingham City Council
4
Office for National Statistics,
Regional Gross Value Added
5
November 2015
6
UK Government, The Midlands
Engine for Growth
including Solihull, Blyth Valley,
Coventry and Warwickshire
• Transport links and accessibility
improvements between HS2 and
Birmingham Airport
• Secure direct international services
from the Midlands to Paris,
Brussels and beyond via a direct rail
link between HS2 and the existing
HS1 line to the Channel Tunnel and
wider European High Speed Rail
Network
• Bury some more congested parts
of Birmingham’s road network, re-
routing parts of the congested A38
This has particular resonance for the
world class manufacturers in the North
of England and the importance of the
infrastructure can strengthen their
clusters.

The UK as a ‘mega region’

Richard Florida proposes that the
UK can be seen as one ‘mega-region’
encompassing the whole of England
and South Wales, with Glasgow
and Edinburgh as a second, smaller
separate mega region.7
Greater
connectivity between the leading
regions will enable the UK economy to
thrive as a system of cities. As a 2014
study by economists Diane Coyle and
Bridget Rosewell notes, “infrastructure
investments should encourage...
positive spill-overs between London
and the other cities...rather than set
them up in opposition to each other.”8
Birmingham
60
50
40
30
20
10
0
GVA£bn
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Gross Value Added, Greater
Birmingham 1997 - 2013
7
Richard Florida, The Rise of the
Mega-Region, (2007)
8
Diane Coyle and Bridget
Rosewell (UK Government
Foresight Future of Cities
Project), Investing in city regions,
(2014)
Source: ONS
1 KEY REGION IN FOCUS

16 17
REGIONAL CONNECTIVITY
1hr10
1hr
1hr15
1hr15
Edinburgh
Newcastle
Manchester
Birmingham
London & South East
Bristol
1hr10
1hr
1hr15
1h
r05
Key
Air links
1hr15
Flight time
Road links
Major/Minor
Rail links
Major/Minor
South East
Bristol
Birmingham
Manchester
Newcastle
Edinburgh
SouthEastBristol
BirminghamManchesterNewcastleEdinburgh
-
2:10
2:15
4:00
5:05
7:15
2:10
-
1:45
3:00
5:00
7:10
2:15
1:45
-
1:40
3:30
5:00
4:00
3:00
1:40
-
2:40
4:00
5:05
5:00
3:30
2:40
-
2:15
7:15
7:10
5:00
4:00
2:15
-
Road travel times (hours:minutes)
South East
Bristol
Birmingham
Manchester
Newcastle
Edinburgh
SouthEastBristol
BirminghamManchesterNewcastleEdinburgh
-
1:40
1:25
2:10
2:50
4:20
1:40
-
1:25
3:00
5:00
6:40
1:25
1:25
-
1:30
3:15
4:15
2:10
3:00
1:30
-
2:27
3:20
2:50
5:00
3:15
2:30
-
1:30
4:20
6:40
4:15
3:20
1:30
-
Rail travel times (hours:minutes)
Sources: Highways Agency,
The AA, UK Airport route
data, National Rail
Regional Connectivity

In addition to external connectivity,
it is important that the UK regions
are connected internally. Good road,
rail and air links ensure that trade,
investment, and labour can easily flow
in the connected UK marketplace.
There are two forms of internal
connectivity; that between the regional
hubs and the surrounding areas,
and that between the regional hubs
themselves.
Connectivity within regions
The increasing availability of
international flights from UK regional
airports, and the introduction of some
long-haul links, means that it is no
longer essential for the whole country
to be connected to the London hub.
Good links within each region to the
regional hub are essential.
Travellers are no longer using smaller
regional airports to connect to the
London hub, instead they are using
larger regional hubs and flying directly
to their destination. Therefore, good
road and rail links within the regions
are of growing importance.1
An additional benefit for business
and consumers of increased intra-
regional connectivity is the effect of
competition. Competition between
airports in the South East has spread,
with airports in the Midlands and
Northern Powerhouse competing
within their regions. This has exerted
a downward pressure on fares and an
increase in routes offered.
Research by the University of Ghent
points to a strong link between regional
economic growth and air connectivity.2
Connectivity between
regions
Competition is not limited to within
regions. The roll-out of HS2 will see a
greater degree of pressure on London
airports from the Midlands and
Northern Powerhouse competing with
London & the South East.
Air travel remains the preferred mode
of transport for journeys of over 3
hours within the UK. Therefore, The
Channel Group would like to see
regional links maintained and grown
at UK airports. With increasing speed
and efficiency, air travel is becoming a
competitive option to road and rail for
journeys between 2 and 3 hours.3
The
Channel Group welcomes this healthy
competition.
Road & Rail
For journeys under 2 hours, road and
rail retain their advantage over air
travel. The National Connectivity Task
Force takes the view that the UK's
topography and morphology mean that
offering a comprehensive and cost-
effective surface transport network
is not possible.4
Nevertheless, a good
network of roads within and between
regions is essential.
Better and more capacious east-west
road connections are vital to growing
the northern economy to complement
the many north-south links. For
example, the M62 interchange
connecting Manchester and Sheffield
comprises a small single carriageway
road subject to the weather over
the Pennines. A link road under
them should be a priority and would
complete the ‘triangle’ of major road
links between Sheffield, Leeds and
Manchester. At up to almost 20 miles
it would be the world’s longest road
tunnel but could deliver economic
benefits of up to £421m a year.5
1, 4
National Connectivity Task
Force, Air Connectivity Matters
(2015)
2
Ghent University, Aviation's
role in city and economic
development (2015)
3
Force, Review of Regional
Accessibility Measures (2015)
5
HM Government, Trans-Pennine
Tunnel Study Interim Report
(2015)

18 19
The Greater Birmingham Chambers
of Commerce called the idea of a hub
airport a myth.2
For the past 50 years
the UK has operated a hub model, with
Heathrow at the centre. Connections
for both long-and short-haul flights
were via London. In the last 20 years
this has changed in the short-haul
market. A greater number of point-to-
point flights in Europe, and between
the regions, have been driven by
greater competition amongst airports,
airlines and the growth of low-cost
airlines.
These developments are now being
seen in the long-haul market, due
to the disruptive effects of new
technology and greater competition.
The break-up of BAA has allowed
Gatwick, Stansted and Edinburgh
to offer long-haul flights that had
previously been monopolised by
Heathrow.
This increase in competition has had a
positive effect for consumers - there
is now greater choice and better
connectivity without the need for
travelling via London. This has been
seen most predominantly in the short-
haul market, but is now having an effect
on long-haul.
Greater competition between airports
What regions need
“Without efficient transport between and
within metros, we hold back long-term,
sustainable economic growth, connectivity
between ... cities is a particular barrier to
realising the agglomeration benefits of major
urban areas just miles apart. Without a focus on
fast, efficient connectivity between and within
metros, we risk hindering long-term, sustainable
economic growth.”

City Growth Commission1
1
The RSA City Growth Commission,
Unleashing Metro Growth, (2014)
2
Birmingham Post, Call for
Birmingham Airport expansion after
London development plans hit by
delay, 09 Dec 2015.
AIR
UK AIRPORT CONNECTIVITY
Bristol103
2
101
Cardiff 46
2
44
Edinburgh175
8
167
Glasgow 187
14
173
Birmingham 110
14
96
Liverpool 71
9
62
Heathrow180
82
98
London & South East
Gatwick 200
50
150
Stansted170
2
168
Luton 125
1
124
City47
1
46
Southampton 40
0
40
East Midlands82
4
78
Manchester222
45
177
Newcastle 74
2
72
Source: UK Airport route data
Regions Total destinations
London & South East 762
Scotland 362
Manchester & Liverpool 293
Midlands 192
South West 149
Airport Total
LH
SH
Destinations
LH-Longhaul
SH-Shorthaul
Key

20 21
has also lowered the entry barrier into
the airline industry. WestJet, Emirates
and Norwegian airlines have been
successful in offering both short- and
long-haul flights from alternative UK
airports.
Smaller, more efficient aircraft are
opening up long-haul routes to new
carriers, allowing the opening of new
routes which were previously not
financially viable. New aircraft have
a longer-range, are smaller, and more
fuel efficient. This has made long-haul
routes financially viable even with a
lower demand. With a new generation
of aircraft coming into operation,
this effect will only become more
pronounced.
Heathrow is the UK’s busiest airport
- for now. We are in the age of
the consumer, where markets are
fragmented as consumers are given
more choice and a greater ability to
make these decisions. The internet has
given consumers far more information
than was available even 10 years ago.
For airlines, this means websites such
as Skyscanner are helping travellers to
opt for airports other than the obvious
hub, for cost, convenience or both.
A pattern of regional airports will
ensure that the UK has the air
infrastructure not only required, but
demanded by consumers today and in
the future.
The Channel Group would like to see a
pattern of regional growth centres that
spread economic benefits throughout
the country.5
With globally connected
airports, these cities and regions can
secure direct economic growth.
Expansion at Gatwick is essential
to ensure competition. It is the only
option for expansion that does not
undermine regional growth. Gatwick
can meet the point-to-point demand
and keep the London economy directly
connected to international markets.
The Channel Group would like
provision to be made for a pattern
of regional cities with associated
transport infrastructure, but this
growth also needs to be spread
within the regions. In the South
East & London, the growth has been
concentrated in the west around
Heathrow. Other global cities, such as
New York, rely on a dispersed network
of transport hubs. The Channel Group
supports a new runway at Gatwick
and either Birmingham or Stansted,
offering greater competition and many
benefits for consumers.
The upgrade of Gatwick is essential
to ensure competition in the airport
market and the continuation of
the benefits seen by airlines and
consumers over the past few years.
A new runway at Heathrow will
stifle competition in the long-haul
market and will undo all the positive
progress that has been made since
the break-up of BAA. According to the
OECD International transport Forum,
if Heathrow were to expand, “the
probability of new long-haul direct
flights from UK regional airports will
diminish”.¹
Keeping costs low for airlines is the
only way to offer greater choice for
consumers. Airlines make decisions
about routes based on economic
viability. Already levying the highest
airport charges anywhere in the world,
Heathrow could charge airlines up
to £40 per passenger if expansion
went ahead - over 2.5 times the
maximum cost at Gatwick.² Only a
decentralisation of airport capacity and
increased competition will keep costs
low for airlines and benefit passengers
and businesses.
2016
Support 88%
Oppose 9%
Abstain 2%
Other 0.5%
Survey of Gatwick Diamond Business
members' support for second runway
at Gatwick Airport6
Gatwick is also more internally
connected than Heathrow - serving
13 UK destinations to Heathrow’s
7, which could fall to 4 if the West
London hub is expanded. The Channel
group recognises that UK airports
must be well connected internally
as well as externally and challenges
other UK airports to increase internal
connectivity. Putting Heathrow to
shame, Edinburgh Airport flies to 21
UK destinations.4
“Norwegian can contribute to putting
50 Dreamliners into Gatwick. I've
looked into it, it's not something I've
pulled out of a hat. Gatwick has the
network to fly to every corner of
Europe. Not all the airports have that”.
BJORN KROSS, CEO, NORWEGIAN AIRLINES³
Heathrow
Gatwick
Luton Stansted
City
Southampton
The South East & London
1
OECD International Transport
Forum, Forecasting Airport
Demand: Review of UK Airports
Commission Forecasts
and Scenarios , (2015)
2
Airports Commission,
Final Report, (2015)
3
London Evening Standard,
Norwegian pledges 50 long-haul
Boeing 787 Dreamliners for
Gatwick if second runway is built,
(2016)
4
UK Airport route data
5
Ghent University, Aviation's
role in city and economic
development (2015)
6
Gatwick Diamond Business
(2016)

22 23
Connections
The UK risks missing out on billions of
pounds in trade unless it boosts direct
flights to the fastest growing world
economies. Traffic flows from the UK
to international markets such as China
and India will grow at a significant
multiple to underlying GDP growth.

Links with Europe’s ten economic ‘mega
regions’ are important but are arguably
already well served throughout the UK
thanks to the many destinations low
cost carriers have added in the last two
decades at airports throughout the UK.
It is new long-haul links that matter
most.

For every additional daily flight to
each of the eight largest high-growth
markets, the UK would increase trade
by as much as £1 billion a year, with
every increase in 1000 passengers
generating up to £920,000 in new
business.1
Let Britain Fly estimated that the
UK does 20 times more trade with
countries with which it has direct flight
connections.2

The long-standing need for more
airport capacity in the South East must
be urgently addressed given that all
London airports will be full by 2025.3
However, greater capacity must be
built beyond it too. Birmingham Airport
is forecast to have reached capacity by
2040 and future improvements in cost
efficiencies and technology will make
new routes viable throughout the UK.

New efficient aircraft, such as the
Boeing 787 and Airbus A350, are
delivering better route economics,
creating new point-to-point route
opportunities, and offering long-haul
option that were previously not viable
from UK regional airports.
Heathrow, London’s UK air hub, will
remain vital to the UK’s global trade
links but the arguments for a greater
role for non-hub airports are strong
and the evidence is that demand
for non-hub routes is growing fast
globally.

Regional airport growth is already
strong. The number of passengers
using Manchester airport, Britain’s
busiest outside London, has risen by
more than one-fifth since 2010, to 23
million a year. It is forecast to rapidly
grow its passenger numbers and
currently carries over 60 per cent of air
passengers in the north. Those regional
airports carrying six million passengers
a year or more, including Birmingham
and Edinburgh, are also enjoying strong
growth. But room must be made for
expansion. Birmingham Airport will
need a new runway by around 2030,
enabling it to increase capacity to more
than 70m passengers.4
Links to high-growth
economies are essential
+362%
UK trade growth in the
eight largest high-growth
economies from 1993-
2011.
Every new route to international markets
boosts trade dramatically.
Global non-hub demand is rising
2000+
The number of new city pairs have been added to the
aviation network in the last 15 years.
+266%
Increase in direct flights
to the eight largest high-
growth economies from
1993-2011.
£128m
Additional trade per year
for every daily flight to a
high-growth market.
New air links add significant value
Getting to and from the
airport

Good surface access to UK airports
must be improved if the full potential of
better international trade links is to be
realised. There is a paucity of ambition
and of connected thinking in the UK
with almost no concrete plans for
better overland links to major airports
post 2020.
A CBI survey of more than 50 per cent
of passengers cited public transport
links as the key determinant in their
choice of airport, rising to 65 per cent
outside London.5
Better rail links to existing airports are
vital along with ensuring local regional
links to airports such as Manchester
are fast and will be able to cope with
growing capacity.

The Channel Group calls for an urgent
response to the lack of solid proposals
to improve overland airport links in
the UK, and would like to see coherent
plans to ensure the UK makes the most
of the network benefits that HS2 can
unlock for the nation, as recommended
by the Transport Select Committee
report in February 2016.

The most pressing issue is Gatwick
Airport’s rail links which have the
highest rail mode share of any
1
City Growth Commission,
Final Report, (2015)
2
Let Britain Fly, Facts and
Figures
3
The Telegraph,
Poor airport connections
lose UK billions, (2015)
4
Birmingham International
Airport, Towards 2030:
Birmingham Airport Masterplan,
(2007)
5
CBI, Trading Places: Unlocking
export opportunities through
better air links to new markets,
(2013)
Source: CBI, Trading Places: Ulocking export opportunities through better air links to new markets, (2013)
Long-haul passengers from non-LHR UK airports
14
12
10
8
6
4
2
0
Source: CAA
Passengersperyear
(million)
7.3
Regional London (exc. LHR)
5.8
2011 2012 2013 2014 2015
5.7 5.9 6.4
5.2 5.0 4.9 5.0 5.3
11.0 10.7 10.8 11.4
12.6

24 25
Much of the debate surrounding airport expansion
has focused on the South of England’s major airports
due to their proximity to London. In July 2011, the
Edinburgh Air Masterplan was devised reflecting the
principles of the 2003 white paper “the future of Air
Transport” which laid down a responsible framework
for the future of Scottish airports. Edinburgh is the
5th largest airport in Europe and saw the opening
of a new £40 million departure lounge extension in
2010. The Masterplan recognises that if projected
passenger numbers exceed those forecast beyond
2020, development will need to be accelerated
to meet the demand. Up until 2020, the current
projections see a steady increase in domestic
passenger numbers, recognised in 2010 as 47%.
However, in less than four years the number of
international flights is expected to surpass this
domestic travel. By 2040 passenger numbers are
expected to grow to over 20 million based on an
average growth of 2.7%.1
Beyond Edinburgh’s airport expansion, better access
is required and in 2012 the Airport Surface Access
Strategy was born. The Strategy makes clear that
while improvement in public transport access is
important, road capacity is of increasing long term
significance, given the disparate nature of passenger
demand and the limited capability of public
transport to serve such a geographically-dispersed
customer base. This programme goes further than
trams, rail and buses and looks at the effect on
employees at the airport. Improvements to the Ride
2 Work scheme and car sharing methods are key
components. Initiatives such as “kiss and fly” will be
grown whereby a passenger is dropped off at the
airport from a vehicle which is then driven away, and
picked up again on return.
Edinburgh
Edinburgh
Airport²
47%
Increase in passenger
numbers by 2020
20 million +
Passenger numbers by
2040
1, 2
Edinburgh Airport
Masterplan (2011)
UK airport. There is a clear need
and demand from passengers and
businesses using the Brighton mainline
to Gatwick Airport with strong growth
predicted to rise from 27,300 in 2011
to 47,600 by 2043. The airport is a
major provider of jobs and business
growth, and is projected to create
more than 22,000 airport-related jobs
by 2050, and contribute £1.73 billion
per year to the local economy.1

Congestion travelling to the South East
leads to lost time for individuals and
businesses. Public transport to both
airports also needs to be faster with
more direct services from Sussex and
Surrey towns. Improvements should
include a major upgrade of the North
Downs Line with station upgrades,
rolling stock improvements and
electrification, and close examination
of more ambitious options including:
• Upgrading of Brighton mainline
capacity between Gatwick and
London and a look at the case for
a BML2 via Uckfield, connecting
with Crossrail and terminating at
Stansted, which could free capacity
on the original Brighton line for
better Gatwick Express links into
central London.
• A southern rail access to Heathrow
Airport that could facilitate the
extension of Crossrail services into
Surrey possibly encompassing a
new rail link broadly paralleling the
M25 from Heathrow Airport into
Surrey, potentially linking through
to Gatwick Airport and beyond.
• Other regional airports should not
be forgotten either. Of the 21 UK
airports which saw more than one
million passengers in 2014, only
nine have direct rail connections.2
Edinburgh
1
Gatwick Obviously, A train
every 2.5 minutes from Gatwick
to London, (2014)
2
House of Commons Transport
Select Committee, Surface
transport to airports: Planning
surface access schemes, (2015)
Catchment population within
60 minutes of airport (million)
London
City 8.0
Stansted 7.9
Heathrow 7.9
Luton 6.9
Gatwick 6.8
Glasgow 2.7 Edinburgh 2.5
Newcastle 2.3
Manchester 6.6
Birmingham 6.8
Source: DfT, Glasgow Airport,
The City of Edinburgh Council

26 27
The focus for much of the transport
spending post 2020 should focus on
the creation a multi-modal, integrated
transport system for both personal
travel and freight in the north of
England where “infrastructure is dated,
poorly integrated, and lacking the
large-scale investment it needs”.

A February 2016 poll from Ipsos
Mori North commissioned by the UK
Northern Powerhouse International
Conference and Exhibition revealed
that 82% of people in the north
of England believe 'transport
infrastructure investment should be a
priority'.

The recently announced £600m
investment in the Northern Hub,
upgrading rail links in the region to
cut journey times on trains between
Manchester, Leeds, Bradford and
Sheffield, should be just the start.

HS2, will connect eight of the 10
largest cities in the UK, including
Manchester, Leeds and Sheffield,
improving travel time, yielding large
economic benefits. It is a key transport
investment but will only have real
value if it forms part of a network that
creates significant spill-over effects.

To reap greater benefits from the
HS2 rail link, the Higgins review of
2014 found the north needs much
better internal connectivity. Part of
the solution may lie in a High Speed 3
(HS3) east–west line.

A One North proposition currently
under development proposes investing
£15 billion in northern transport across
several modes.
Transport for the North (TfN) identifies new rail and road
routes across the Pennines as a national priority, as urgent as
Crossrail 2 in London, along with a new Liverpool-Manchester
Airport-Manchester railway line, both of them linked to HS2.

TfN is working on a plan for £15bn-£50bn of infrastructure
spending over the next 10 to 15 years.

The Northern Powerhouse
Liverpool Sheffield
Manchester
10 million
Combined Northern
Powerhouse population,
more than Tokyo, New
York or London.
£56 billion
Value to the Northern
Powerhouse of
'rebalancing' the UK
economy.
Why rail travel is becoming more
important:

• More people are now travelling
by train than at any time since the
early 1920s¹
• Rail travel growth is happening
much faster than predicted
• Trends suggest demand is set to
grow much further still
• Under-30s and young women in
particular are much less likely to
drive and more likely to opt for
public transport including rail
travel²
• Annual growth on the West Coast
mainline continues to exceed 5%³
• A future capacity crisis may be
closer than thought

“Passenger journeys
increased by 69.5 per cent
between 2002 and 2014
but on a network that grew
hardly at all. Cities that are
growing also grow trips. This
requires capacity, and the
existing lines have run out of
the ability to provide it.”
The Office of Rail and Road4
The National Infrastructure
Commission intends to improve
regional interconnectivity and is
prioritising northern connectivity,
particularly identifying priorities
for future investment in the north’s
strategic transport infrastructure.
Regional infrastructure improvements
will benefit businesses both in the
north and south. London is increasingly
becoming easily accessible from the big
northern cities, yet from one northern
city to another it is surprisingly difficult
“High density centres require high density
people delivery systems, which car based
systems cannot easily provide. While 80% of
London’s workforce arrives by public transport,
the reverse is true in other cities and this
has constrained the ability to create high
productivity centres.”
Diane Coyle and Bridget Rosewell

RAIL
Source: HM Government, The Northern Powerhouse:
One Agenda, One Economy, One North, (2015)
1
Railnews, Passenger figures break
90-year record, (2016)
2
Railnews, Why rail passengers
growth will continue and has nothing
to do with privatisation, (2015)
3
Railnews, Are big changes afoot for
the rail industry?, (2015)
4
ORR, Passenger Rail Usage
2014-15 Quarter 4 Statistical
Release, (2015)

28 29
for businesses to trade. Improving
connectivity between cities will allow
businesses to expand and make
trading more efficient. Similarly in the
southwest with the electrification of
the Great Western Railway travelling
to and from the region will become
easier.
The Brighton mainline needs updating
and the London & South Coast Study,
ordered by the Chancellor George
Osborne in 2015, promised to include
BML2 and is due to be published in
Autumn 2016. ¹
Providing a better rail link to the
underused Stansted airport would
enable Gatwick and Stansted to work
together like a hub airport to increase
international visitors. It will also enable
better cross-London connections
for those living in Kent and Sussex.
Liberal Democrat East Sussex County
Council Councillor Rosalyn St Pierre,
who opposes BML2, acknowledged
that “People in Sussex are forced to
live with one of the worst performing
railway networks in the country”.2
In Cambridgeshire, the small town
of Wisbech hasn’t seen a railway line
in many years, but it has become a
thriving town in recent times. The
process of re-opening railway lines can
take years of consultation and this line,
like the Uckfield to Lewes line in East
Sussex, is no different. The problem is
that Britain has seen a third of its line
capacity, roughly 17,000 miles, shut
down and the process of re-opening
is something Whitehall is reluctant to
consider, not least because it may be
cheaper to add rail capacity through
pharaonic projects such as HS2.
In Scotland, the Edinburgh Glasgow
Improvement Plan (EGIP) is underway.
Scottish Transport Minister Derek
Mackay argued that the Edinburgh
Gateway station will offer “new
journey opportunities to the airport,
places of work and the surrounding
business development area”. A total
of £742 million out of a proposed
£5bn for rail improvement in Scotland
has already been put forward by the
Scottish government. The funding
is being ploughed into an array of
projects, from Edinburgh's Gateway
station and Glasgow’s Queen Street
station, to the line improvements
between Stirling and Dunblane. The
plan is for 150 km of electrified line
in Scotland and a 30% increase in
capacity by 2020, providing faster,
more reliable trains. The programme
faced criticism early on in the process,
with the original estimate being sliced
by £300m and a capacity reduction cut
by 20%. Nevertheless, the programme
is on schedule and will deliver real
change to the aged Scottish network.³
The effect of this regional
infrastructure improvement will
rebalance the scales, shifting the
economic hub away from London
and allow the UK to compete as a
whole on the world stage. Many
historic London-centric businesses,
such as accountancy and law firms,
now have offices in Leeds, Bristol and
Manchester. Cheaper rental space
has taken them there, and the lower
cost to their customers has kept them
there. Employees not living in London
benefit from the lower cost of living.
London cannot be entirely ignored.
It is constantly growing, with the
population expected to reach 10
million by the early 2030s and nearly
11.5 million by 2050.4, 5
Transport
infrastructure in London is already
the most advanced in the country; it
boasts the underground, regular buses,
trains from a multitude of stations, as
well as air travel. All of these modes
of transport are fundamental to daily
life, and the demands placed on them
are vast and varied; from personal
travel to the transportation of goods:
the international to the local. Due to
Newcastle is one of the key
government regional growth areas
and the vision is to have "a transport
system that is an engine for economic
growth”.6
In 2013 the Gateshead and
Newcastle Delivery Plan stretched
to 2030 and aimed to promote and
improve sustainable travel and ensure
effective maintenance of the existing
works. Of key importance is expansion
of the A1, a vital link to Edinburgh
and the South, which faces continual
congestion.7
The National Infrastructure Delivery
plan 2016 - 2021 released in March
2016 contains a £1billion package of
improvement and maintenance works.
Specifically it features the completion
of projects to create a motorway link
from the North East to the rest of
England and start of construction on
both the dualling of the section north
of Newcastle between Morpeth and
Ellingham, and a widening scheme on
the A1 Newcastle-Gateshead Western
Bypass.8
The Port of Tyne has also received
the go ahead for development at a
cost of £350 million which will aim to
provide full time employment to 300
people. The project is located on a 54
hectare brownfield site of which 38.8
hectares is a designated enterprise
zone. Conveniently located only 5
minutes from the metro station with
connectivity to Newcastle airport and
London, the project offers the port
huge support to continue the region's
strong tradition in heavy engineering.9
Newcastle
£350m
Investment in
development of the
Port of Tyne.
£1 billion
Value of
improvement
and maintenance
works outlined
in the National
Infrastructure
Delivery Plan 2016.
the sheer volume of people using the
transport systems in London, they are
often under pressure or operating in
excess of maximum capacity at peak
times. In order to improve, there must
be modernisation and new lines built.
London Bridge station is undergoing a
multi-billion pound overhaul like Kings-
Cross-St Pancras before it. London
Underground is investing millions of
pounds upgrading its network and
purchasing new rolling stock. See 'The
job isn't done in London' overleaf for a
detailed analysis.
“[Poor road and rail infrastructure]
is estimated at costing the Sussex
economy around £2 billion a year.
I am supporting the Brighton Mainline
2 (BML2) campaign which will see the
reopening of the Lewes to Uckfield Rail
line.”
Maria Caulfield, Member of Parliament for Lewes
Speaking to The Channel Group
1
HM Government, Terms of
Reference – London and South
Coast Rail Corridor Study, (2016)
2
Sussex Express, Tories and Lib
Dems clash overprogresstowards
reinstating Lewes-Uckfield
services, (2016)
3
Network Rail, Edinburgh
Glasgow Improvement
Programme, (2016)
4
Infrastructure Plan 2050, (2013)
5
HM Government, National
Infrastructure Delivery Plan
2016–2021, (2016)
6, 7
Gateshead Council, Gateshead
and Newcastle Infrastructure
Delivery Plan, (2013)
8
HM Government Infrastructure
and Projects Authority,
National Infrastructure Delivery
Plan 2016–2021, (2016)
9
HM Government Regeneration
Investment Organisation,
Regeneration Project: Port of
Tyne – Newcastle / Tyne and
Wear, (2015)

30 31
Journey times on UK roads are
slowing, clogging the nation’s roads
due to congestion. The roads are
essential for trade and this is holding
back expansion and growth. The
perceived rate of deterioration in
reliability on the road network due to
congestion increased to pre-recession
levels according to a 2015 FTA
report, and average speeds across the
network are falling.1
According to the 2014 CBI/URS
Infrastructure Survey, 99% of firms
surveyed said that the quality or cost
of infrastructure has a significant
impact on their investment decisions.2
The urgency of addressing the main
freight route into Europe is especially
pressing given the chaos caused in
2015 by the congestion arising from
Operation Stack, which closed the M20
for weeks at a time.
There is scope to move at least
some of this freight to rail. European
Commission forecasts predict a
doubling of Channel Tunnel rail freight
in the next five years, as Eurotunnel
announced it would reduce the
current level of track access charges
imposed on rail freight operators by
up to 50%. According to the FTA,
rail freight should also benefit from
new national planning guidelines that
should encourage private investment
in strategic rail freight interchanges.3
There is the potential for freight to
double on the West Coast mainline
and Felixstowe to London line, to grow
by 75% on the East Coast mainline,
and by a third on the line from
Southampton to the Midlands.4

FREIGHT
The end of bulk coal rail freight in the
coming decade, as the UK’s coal-fired
power stations close for good, may
further create capacity, and create
opportunities to increase the transport
of goods via rail beyond 2026.

Government and Network Rail must
make their commitment to rail freight
development clear to spur investment
decisions from operators if this
potential is to be realised. Wider gauge
capacities at key points for wider use of
containers will be needed in key parts
of the network.
The job isn't done in London
London and peripheral
locations within the
South East of England are
clear beneficiaries of the
agglomeration effect that
produces faster trend growth.
London has been a beneficiary of much
of the UK’s transport infrastructure
spending in recent years, some would
say disproportionately so.
Yet London’s importance to UK
growth, and the projections for
the growth in both its resident and
working populations, means the UK
should invest much more in order to
handle these greater numbers.

Future London projects

The constraints imposed by the existing
infrastructure and network require
ambitious planning to meet growing
capacity demands.
Construction innovations have allowed
increasingly ambitious projects such as
Crossrail’s 26 miles of new rail tunnels
under London.
Applying innovative thinking to
other problems could yield solutions
including these proposals:

• Replacing the disjointed roads
which make up London’s current
inner ring road with an orbital
tunnel estimated to cost £15-25
billion.
• A £6bn bored tunnel crossing the
Thames between East Tilbury and
Gravesham.
• Crossrail 2 costing an estimated
£27-32 billion and potentially set
for delivery around 2030 would
help connect more of London’s
outer reaches, speeding travel
times. This should be funded but
even greater ambition is needed.
• Hardly yet on the drawing board,
Crossrail 3, including a 4-kilometre
section of tunnels connecting
Euston and Waterloo, would
connect the West Coast mainline
corridor with services to the south
- further boosting the network
effects of the national rail system.
70%
Transport capacity
growth required by
2050.
£500 billion
Spending needed on
transport infrastructure.
£1.5 trillion
Extended economic
benefits.
Source: Mayor of London, London Infrastructure Plan 2050, (2013)
1
FTA, Logistics Report 2015, (2015)
2
CBI, Infrastructure survey:
Political uncertainty holding back
transformational progress on
infrastructure, (2014)
2
European Commission, European
Commission welcomes Eurotunnel's
plan to reduce charges by up to 50%,
(2014)
3
Freight Trabnsport Association,
Rail freight infrastructure funding,
(2007)

32 33
Bristol & Cardiff
Bristol itself has seen a different take
on funding for an “enterprise zone”,
instead of building a business park,
the council located it next to the main
train station to avoid people travelling
out of town. Developments at Bristol
airport have also begun, with planning
permission in place for a development
of facilities to accommodate 10 million
passengers a year. The airport's
masterplan extends to 2030 and sees
the expansion of its existing terminal
whilst planning to support 5,686 jobs
by 2030 and have a total regional
employment impact of 8,606 by 2030.
The Channel Group is disappointed
that the electrification of the Great
Western Railway has fallen behind
schedule. Electrification across the
Great Western network would be key
to the development of Cardiff and
Bristol as a key economic engines in
the southwest. Not only would trains
be more efficient with reduced running
costs, but journey times would be
shorter.
10 million
Passenger capacity
after improvement
works at Bristol
airport.
8500 +
Additional jobs
created by increased
capacity.
BristolCardiff
Severn crossings
About 95% of UK imports and exports
by volume go by sea, and volumes
are forecast to grow in the long-
term. There is a compelling need for
substantial additional port capacity
over the next 20-30 years, including
the creation of the ‘Atlantic Gateway’.¹
The UK ports sector comprises a
variety of company, trust and municipal
ports, all operating on commercial
principles, independent of government
and very largely without public subsidy.
The private sector operates 15 of
the largest 20 ports by tonnage and
around two-thirds of the UK’s ports
traffic.2

Supporting this growth with internal
links is vital. Port-centric warehousing
and the increasing proportion of all
freight traffic arriving in the expanding
northern ports means that the centre
of gravity of the UK’s freight and
logistics industry is in the north,
according to Transport for the North.

Current capacity will not meet
future demand for effective freight
movement. The trend towards lean
inventory models, which demand
fast, reliable deliveries, adds a further
imperative here.

UK freight operators who use UK
seaports overwhelmingly indicate that
congestion is worsening, especially
along access roads to ports.

The government allows judgements
about when and where new
developments might be proposed,
to be made, based on commercial
factors. However, the government
has worked with the ports industry to
establish a partnership that seeks to
provide a cohesive platform for future
development in the ports industry.

Increased port capacity is in the 'Top
40' priority infrastructure investments.
The Government is investigating ways
to extend capacity over the next 20-30
years.3

Southampton

The UK’s second largest port is
the infrastructure gateway of
Southampton Port recognised as
one of the very few UK international
gateways whose commercial growth
is critical to regional and national
economic success. The Port developed
a regional development plan that runs
to 2030, and seeks to estimate long-
term future demand.4
In 2007, the
Port handled 44m tonnes of cargo,5
an
increase of 33% since 1998. By 2030 it
is predicted that over 62 million tonnes
will pass through the Port.6
The Channel Group recommends that
the ports in the UK are integrated
more strategically with the regional
infrastructure network. Better road
and rail links can provide a more
efficient operation of the ports. These
improvements are essential to support
the now commonplace Just In Time
model of supply chain management.7
As discussed previously, increased rail
capacity may come after 2026 with the
reduction in coal transport.
MARITIME
1
HM Government, Policy on
Maritime Sector 2010-2015,
(2010)
2, 3
HM Government,
Infrastructure Pitchbook
4
ABP, Port of Southampton
Master Plan 2009-2030, (2009)
5
DfT, Maritime Statistics 2007,
(2007)
6
ABP, Forecast demand analysis
for the Port of Southampton to
2030, (2009)
7
DfT, The container freight
end-to-end journey An analysis
of the end-to-end journey of
containerised freight through UK
international gateways, (2008)
8
Force, Air Connectivity Matters
(2016)
Northern Ireland
This paper has not explored the
infrastructure investments required in
Northern Ireland. This is due in part to
the geographic isolation of Northern
Ireland from the rest of the UK, but
also to the relatively porous land
border with the Republic of Ireland.
The two airports in Belfast offer a
mix of long- and short-haul flights.
Historically, Northern Ireland has
been dependent on London as a hub,
but advances in aviation technology
have reduced this. In addition, surface
transport improvements to the
Republic of Ireland, where the aviation
tax regime is markedly different, mean
that business travellers can access
cheaper and more numerous routes
with increasing ease.8
Despite the
economic consequences of leakage to
the Republic of Ireland, The Channel
Group believes that competition
between the nations is providing
value to businesses and consumers at
present.
Source: Bristol Airport, Masterplan, (2006)

34 35
• Regional cities are key for UK
economic growth.
• There has been a substantial
move away from London-centric
infrastructure projects. However,
more can be done to prevent
London becoming the UK’s sole
business destination.
• Better connectivity between and
within the regions is essential.
• Regional growth centres can only
be effective if their infrastructure
needs are met by international
connectivity.
• New airport capacity in the South
East is paramount to create
and maintain London’s position
as a leading global business
destination. Gatwick is the only
option for expansion that does
not undermine regional growth.
It can meet the point-to-point
demand and keep the London
economy directly connected to
international markets.
Infrastructure is fundamental for
UK growth, yet investment has
deteriorated over recent decades. The
UK needs to invest £400 billion to
deliver all the infrastructure projects
planned by the UK government to
2020, and much more beyond.
The Channel Group advocates that
support is given to developing a
pattern of regional growth centres that
spread economic benefits throughout
the country. With globally connected
airports, these cities and regions can
secure direct economic growth.
Growth also needs to be spread
within the regions. In the south the
growth has been concentrated around
Heathrow. Other global cities, such
as New York, rely on a dispersed
network of transport. The Channel
Group supports a new runway at
Gatwick which is essential to ensure
competition in London by delivering
more point-to-point capacity. A
new runway at Heathrow will stifle
competition in the long-haul market
and will undo all the positive progress
made since the break up of BAA.
Further expansion is required at either
Birmingham or Stansted, to offer
greater competition and more benefits
for consumers.
The Channel Group urges decisiveness
when discussing improvements to
overland airport links in the UK and
calls for comprehensive plans to
ensure the UK makes the most of the
network effects that HS2 can unlock.
The Channel Group recommends that
the ports in the UK are integrated
more strategically with the regional
infrastructure network, with better
road and rail links making accessibility
more efficient.
Increased rail freight capacity may
come after 2026, with the reduction
in coal transport. This will provide the
opportunity for freight to be moved
Conclusion
from road to rail, increasing efficiency
and reducing the burden on the UK’s
road network.
To meet its potential the UK must
make itself available to the global
economy, which is set to grow
dramatically in the coming decades.
It must develop connections with the
areas of greatest growth, principally
southeast Asia. This can be supported
by internationally connected regional
airports.
Focusing investment in six key city
regions, treating them as inseparable
economic clusters and building better
links between these regions should
be a priority. Without substantial
infrastructure investment, the UK
economy will be unfit to compete in
the globalised market.

© The Channel Group May 2016 .
The Channel Group International LLP, Trinity House, School Hill, Lewes, BN7 2NN.
Registered company no. OC401170.

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