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Early in the Industrial Revolution, Exeter's industry developed on the basis of locally available agricultural products and, since the city's location on a fast-flowing river gave it ready access to water power, an early industrial site developed on drained marshland to the west of the city, at Exe Island. However when steam power replaced water in the 19th century, Exeter was too far from sources of coal (or iron) to develop further. As a result the city declined in relative importance, and was spared the rapid 19th century development that changed many historic European cities. Extensive canal redevelopments during this period further expanded Exeter's economy, with "vessels of 15 to 16 tons burthen [bringing] up goods and merchandise from Topsham to the City Quay".
The first railway to arrive in Exeter was the Bristol and Exeter Railway that opened a station at St Davids on the western edge in 1844. The South Devon Railway Company extended the line westwards to Plymouth, opening their own smaller station at St Thomas, near the lower end of Fore Street. A more central railway station, that at Queen Street, was opened by the London and South Western Railway in 1860 when it opened its alternative route to London.
Exeter was bombed by the German Luftwaffe in the Second World War, when a total of 18 raids between 1940 and 1942 flattened much of the city centre. In 1942, as part of the Baedeker Blitz and specifically in response to the RAF bombing of Lübeck, forty acres (160,000 m²) of the city, particularly adjacent to its central High Street and Sidwell Street, were levelled by incendiary bombing. Many historic buildings were destroyed, and others, including the grand Cathedral of St Peter in the heart of the city, were damaged.
Large areas of the city were rebuilt in the 1950s, when little attempt was made to preserve Exeter's ancient heritage. Damaged buildings were generally demolished rather than restored, and even the street plan was altered in an attempt to improve traffic circulation. The post-war buildings are generally perceived as being of little architectural merit, unlike many of those that they replaced, such as Bedford Circus and a section of the ancient city wall.
Despite some local opposition, the Princesshay shopping centre has been redeveloped between the Cathedral Close and the High Street. The development was completed and opened on time on 20 September 2007. There are 123 varied residential units incorporated into the new Princesshay.
In order to enable people with limited mobility to enjoy the city, Exeter Community Transport Association provides shopmobility for use by anyone suffering from short or long-term mobility impairment to access to the city centre and shopping facilities, events and meetings with friends and company.
Previously regarded as second only to Bath as an architectural site in southern England, since the 1942 bombing and subsequent reconstruction Exeter has been a city with some beautiful buildings rather than a beautiful city. As a result, although there is a significant tourist trade, Exeter is not dominated by tourism. In May 2008 there was an attempted terrorist attack in Princesshay.
Exeter forms a single parliamentary constituency. It is relatively marginal, and since World War II its Member of Parliament has usually been drawn from the governing party. At the United Kingdom general election, 1997, Ben Bradshaw was elected as MP for Exeter, and he retained the seat at the elections of 2001 and 2005. Exeter is part of the South West England European constituency, which elects 7 MEPs.
Exeter's city council is a district authority, and shares responsibility for local government with the Devon County Council. Since 2003, no party has had a majority on the council. Exeter City Council is bidding for the city to become an Independent Unitary Authority, a status granted to nearby Plymouth and Torbay in 1998. An outline case was submitted to the Secretary of State for Communities and Local Government in May 2006.
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