Chancellor Rachel Reeves set out a vision to “make Britain the world’s best connected place to do business” on Wednesday, as she signalled support for massive airport expansion across London.
Reeves said the government wanted a third runway at Heathrow — even though it will take more than a decade to deliver — and signalled support for more immediate expansions at Gatwick and Luton airports. Projects at Stansted and City have already been approved.
If delivered, the expanded airports could handle 309mn passengers annually — an 85 per cent increase on the 167mn travellers who used the airports in 2023, the last year for which there is complete data — according to a Financial Times analysis.
The scale of the plans show how airports, and their group of largely international investor owners, are betting that air travel will continue to grow in the coming decades, unencumbered by concerns over carbon emissions.
“The chancellor is right to get behind airports,” said Karen Dee, chief executive of trade association AirportsUK. “Expanding capacity will support growth . . . and will not come at the expense of our sustainability goals.”
But industry experts said growth of this scale would throw up serious challenges, including the need to redraw the flight paths in the skies over London and the south east of England to accommodate all the extra aircraft, likely impacting new communities with noise pollution.
Enthusiasm from the chancellor also belied barely-concealed tensions within the cabinet that have emerged over the UK’s most contentious infrastructure project in decades.
If successful, it would also likely make flying more expensive, particularly from Heathrow, as the airport raises the landing fees charged to airlines to recoup the cost of building the runway.
Still, Becrom Basu, a partner at LEK Consulting who has advised Heathrow, said the new capacity would be used.
“The London market has been struggling to meet demand for a while . . . I think investors can be comfortable there will be a business case for that level of demand,” he said.
By far the most serious challenge is likely to be the impact of airport expansion on the UK’s carbon emissions.
“I find it a bit difficult to see how you could have a third runway at Heathrow and a significant expansion of flight numbers at Gatwick within the government’s carbon budget,” said one person closely involved with the 2015 Conservative government decision to back a third runway at Heathrow. The airport never put forward a planning application because of the pandemic, however.
Casting herself as a chancellor willing to make “bold decisions in the national interest”, Reeves called on Heathrow’s management to put forward plans to build a third runway as soon as this summer.
While previous governments had offered lukewarm support to the politically controversial project, Heathrow’s chief executive Thomas Woldbye said he believed the airport would now “sit round the table together” with the government to deliver the third runway.
“We can trust the government, they can be with us for many years,” he said.
Woldbye said the airport will now dust off its 2019 blueprint for expansion, which was shelved when the pandemic struck in 2020. Costed at £14bn in 2014, it involves diverting the nearby M25 motorway into a tunnel, demolishing 750 homes, a primary school and an energy plant.
But few doubt the scale of the political challenges still facing the project.
Earlier this month energy secretary Ed Miliband said he would not resign if the third runway went ahead, in what appeared to be a capitulation by the project’s biggest cabinet opponent.
Behind the scenes, however, Miliband was said to be “livid”, according to one government figure familiar with the situation. He was not among the cabinet ministers at the speech.
Other cabinet ministers were also taken aback by what appeared to be a sudden decision by Reeves several weeks ago. “There really has been a huge row about it, between the Treasury and just about everybody,” said one person close to the discussions.
Some Whitehall officials even suggested Reeves had tried to bounce prime minister Sir Keir Starmer — who previously voted against the measure — into publicly endorsing the project. He so far avoided doing so, ducking a question on it at last week’s Prime Minister’s Questions session.
Despite Reeves’ warm words, one sceptic inside the government said that Heathrow’s development consent order would still have to pass stringent criteria on climate, air pollution and noise.
“They will still have to reach the same standards that they did 24 hours before this announcement,” they said. “There is a lot of road to run on this.”
Meanwhile long-standing opponent London mayor Sadiq Khan said he remained “simply not convinced that you can have hundreds of thousands of additional flights at Heathrow every year without a hugely damaging impact on our environment”.
Ruth Cadbury, Labour MP for Brentford & Isleworth — and chair of the transport select committee — said the committee would now examine “how clear the links between airport expansion and growth” are.
Cadbury said she was sceptical that the project could ever meet the four tests set by the government on climate change, regional economic benefits, noise and air pollution.
“The test is whether the project provides growth for UK [businesses] as a whole, for the nations and regions, and does it? Not really,” she said.
Reeves, by contrast, insisted the third runway would benefit the entire country.
Reeves insisted the expansion was compatible with the government’s “legal, environmental and climate obligations”, as she pointed to technological advances that could pave the way to “cleaner and greener aviation”.
The aviation industry agrees it can grow while decarbonising. Its road map to net zero 2050, published in 2022, assumes that passenger numbers can still grow while emissions fall.
To do this it is largely relying on “sustainable aviation fuels” or SAFs, which are made up of a diverse range of sources from crops and used cooking oil to household waste. The industry estimates they can emit about 70 per cent less carbon dioxide over its life cycle than traditional aviation fuel.
But it is far more expensive than jet fuel and currently only available in tiny quantities. Airline bosses have said the industry will need considerably more government support to scale up the production of SAFs to reach net zero.
Colin Walker, head of transport at the Energy and Climate Intelligence Unit research group, said the government’s hopes that sustainable aviation fuel will offset the extra emissions from Heathrow’s expansion “are unrealistic”.
“A third runway will increase emissions way beyond the capacity of these fuels to offset them,” he said.
Meanwhile planning experts said Heathrow has spent decades unsuccessfully pushing for growth.
“Heathrow would have to run really hard and the government’s decisions would be challenged along the way,” said Alistair Watson, partner and head of planning at Taylor Wessing.
“The only ones who will win from this are lawyers.”
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