After last week’s bond market jitters, the Chancellor pledged to go ‘further and faster’ to improve the UK’s anaemic economic growth. An early test of that resolve looks now to be looming in the familiar form of a third runway at Heathrow airport. As I reported earlier this month, Reeves is poised to make a swathe of announcements intended to increase economic growth in a speech later this month. Among them includes giving a political green light to Heathrow’s third runway and an expansion of Gatwick and Luton airports, according to Bloomberg.
Successive governments – of various stripes – have ducked Heathrow expansion for decades, with the airport’s last remaining diagonal runway being decommissioned in 2003. Between 1990 and 2015, three major studies all concluded Heathrow’s third runway afforded the greatest benefits. The coalition government cancelled the Brown government’s proposed expansion, shortly after coming to office in 2010. Yet the idea was resurrected by Theresa May. The Commons voted in favour of it in 2018 but plans were blocked by an appeals court in February 2020 on environmental grounds. It thereafter became one of many schemes kicked into the long grass under Johnson, Truss and Sunak.
Now, Rachel Reeves has a chance to prove that this government is different. The Chancellor wants policies that will turbocharge growth, predicted to be 1.6 per cent this year. Higher borrowing costs and a plunging pound mean she wants deep cuts from spending ministers. If difficult spending reviews are to not become a staple of this government, Reeves knows she needs an uptick in the UK’s economic fortunes and fast. Heathrow expansion is the kind of measure that would help: a new runway was estimated in 2016 to eventually produce £61 billion in benefits to the wider economy.
Yet this afternoon has offered a reminder as to why no government is yet to pull this policy lever. Members of Reeves’s own party are already demanding that she disown reports suggesting she wants a third runway. Labour MPs like Clive Lewis and Ruth Cadbury are respectively citing local concerns and the government’s own eco-commitments. Ed Miliband, the Energy Secretary, is believed to privately be against the scheme. The ever-helpful Sadiq Khan has issued a statement to the Guardian, noting his ‘longstanding opposition to airport expansion around London’. Influential campaign groups warn it would have a ‘catastrophic’ environmental impact. Andy Burnham complains – predictably – that the North is getting a raw deal.
Reeves likes to say that she is not afraid to take tough decisions. Endorsing and actually constructing some bigger airports will be a useful test of her growth credentials. Conservative MPs complain that, thus far, the concentrated ‘costs’ of clean energy measures like solar farms have tended to fall on Tory-voting constituencies like Rutland and West Suffolk. Analysis by Politico suggested that prior to the election the overwhelming majority of constituencies hosting the largest proposed solar farms – 25 out of 27 schemes waiting for permission to build – are held by Tory MPs. Many of these have now been approved by Miliband, cheered on by his Labour colleagues.
If Reeves can face down opposition from a Labour London Mayor and her own MPs then it will show a willingness to embrace pro-growth measures – even when they are not politically convenient. It will send a useful signal too to the City, whose businessmen use Heathrow regularly. Almost 80 years after a new runway at Heathrow was originally mooted, Rachel Reeves has the chance to finally get the idea off the ground.
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