Airports Still Await Expansion Decision

Airports Still Await Expansion Decision

As the UK awaits a decision on who will be its next Prime Minister, the anticipated resolution on the proposed expansion of Heathrow and Gatwick airports has been put on hold until possibly October this year. The current Prime Minister David Cameron was set to unveil a decision on expansion in early July, but the political chaos that has been thrown up in the wake of decision to leave the EU has meant that such a major economic decision will now be delayed.

Leading business figures have harshly criticised the government’s move to delay the decision on which airport will win backing for expansion, with the head of the EEF manufacturers’ organisation, Terry Scuoler, slamming the delay as a “missed opportunity to let the world know that post-Brexit Britain is open for business”. The CBI estimates that the UK faces a potential £22.5bn loss of trade to Germany and France, compounded by a £30bn trading deficit with the Brazilian, Russian, Indian and Chinese economies by 2030. Paul Drechsler, the CBI’s president, has warned that the delay is already having a negative effect, but that further damage could be avoided “if the new Prime Minister makes a decision with a clear timetable for action immediately after entering Downing Street, so that construction can begin by 2020”.

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In the wake of the Brexit vote, both airports came out fighting with refreshed statements to stake their claim on the move towards expansion. In July 2015, Heathrow won the preliminary round in the competition for its £17bn third runway plans when it received the recommendation of Sir Howard Davies’ Airports Commission report. And, Heathrow’s bid played strongly to the potential future economic uplift created by the expansion of the UK’s only hub airport, meaning it acts as a layover point for long-distance travellers. The airport’s bid suggested that around 40,000 new jobs will be created in the South East, with another 100,000 roles benefiting the rest of the country, with its strong transport connections to London boosting Heathrow’s proposition.

Heathrow has been prevented from expanding twice before due to noise and air pollution concerns, and it is continuing to breach legal limits on air pollution even without a new runway. Furthermore, Gatwick’s bid has stated that less than 5 per cent of the number of people would be adversely affected by noise than at Heathrow. The number of flights, passengers and the economic uplift will be comparable to Heathrow, but the clincher could be that all this could all be done at a lower cost to the taxpayer and without the wholesale disruption to the surrounding area through noise and air pollution with a Gatwick runway. A Deloitte report discredited Heathrow’s claims that £6.5bn of benefits – or half of the overall estimated economic benefit of a third runway – could be borne from Heathrow expansion if the impact of international transfer passengers is taken out of the estimates.

However, as we await the final decision, it is telling that almost a year after Sir Howard Davies first recommended expansion at Heathrow, the Airports Commission chair is still backing stronger air links via Heathrow not least as a way of offsetting the early signs of slowing growth since the EU referendum vote.

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