Published on October 26th, 2016 | by Jim Lee0
UK Government decides on new runway at Heathrow but further consultation to continue
On 25th October, in what it described as “a major boost for the UK economy,” the UK government announced its support for a new north-west runway at Heathrow Airport – the first full length runway in the south-east, since the Second World War. The scheme will now be taken forward in the form of a draft ‘National policy statement’ (NPS) for consultation.
The decision is the culmination of a process that started in September 2012, with the setting up of the Airports Commission, led by Sir Howard Davies. It published its final report in July 2015. In December 2015, the then Secretary of State for Transport, Sir Patrick McLoughlin announced that the government accepted the case for airport expansion in the south-east and the Airports Commission’s shortlist of options for expansion. It put forward three viable options for expansion, one new northwest runway at Heathrow Airport; a westerly extension of the northern runway at Heathrow Airport; and one new runway at Gatwick Airport. It unanimously agreed that the proposed north-west runway at Heathrow presented the strongest case.
On 14th December 2015, the then Secretary of State for Transport, Patrick McLoughlin, announced that the government, while accepting the commission’s assessment of the need for additional capacity, made it clear that further work was required, before making a decision on the location of a new runway. That work is now complete.
The government’s decision on its preferred location, which was described by Transport Secretary Chris Grayling as, “truly momentous.” The decision which he said is “long overdue”, but is one which will serve the country “for generations to come”. “Today’s decision is a central part of the government’s plan to build a global Britain and an economy that works for everyone. This is just one of a series of major infrastructure investments that will create jobs and opportunities for every part of the UK” he added.
He went on: “The step that government is taking today is. I am proud that after years of discussion and delay this government is taking decisive action to secure the UK’s place in the global aviation market – securing jobs and business opportunities for the next decade and beyond.
A new runway at Heathrow will improve connectivity in the UK itself and crucially boost our connections with the rest of the world, supporting exports, trade and job opportunities. This isn’t just a great deal for business; it’s a great deal for passengers who will also benefit from access to more airlines, destinations and flights.
This is an important issue for the whole country. That is why the government’s preferred scheme will be subject to full and fair public consultation. Of course it is also hugely important for those living near the airport. That is why we have made clear that expansion will only be allowed to proceed on the basis of a world class package of compensation and mitigation worth up to £2.6 billion, including community support, insulation, and respite from noise – balancing the benefits and the impacts of expansion”.
He concluded: “It is not an easy issue or a simple process. I make no apologies for the fact that we have taken time to get it right, but today also shows that this is a government unafraid to take the difficult decisions and get on with the job”.
In outlining the government decision to the House of Commons, the Minister was at pains to explain how the announcement fits within the planning process, and the opportunities that members of the House of Commons, will have to contribute.
The Government’s Airport expansion proposals will be delivered through a thorough, faster planning process, under the 2008 Planning Act and the 2011 Localism Act. This legislation was introduced to speed up major projects, but in an open and fair manner, following the saga of the planning process behind Terminal 5, which took years to resolve.
The next step will be for the government to set out the airport scheme it wants, along with supporting evidence, in a draft ‘National policy statement’ (NPS), which it plans to bring forward in the new year. As required under legislation, this will be subject to a full and extensive public consultation, followed by a period of Parliamentary scrutiny.
This will enable both the public and Members of Parliament to be fully consulted and there will be a vote in the House of Commons. Only once members have voted on the final ‘National policy statement’ and it has been designated, will the airport be able to bring forward a detailed planning application. The planning application will be made by the airport to the Planning Inspector, who will take a view, and advise government of his decision. Final sign off will be by the Secretary of State for Transport and then construction will start.
In time, a new runway will also require the redesign of the airport’s flightpaths. This will form part of a wider programme of airspace modernisation, which is already needed across the country, in the coming years. The government also expects to consult in the New Year on a range of national proposals covering noise and airspace.
The UK Aviation Industry in context
The UK currently has the third-largest aviation network in the world, second only to the United States and China, and contributing over £22 billion (around €24.61 billion), to UK Gross domestic product (GDP). It has the second largest aerospace manufacturing sector, which generates annual exports of £26 billion (around €29.1 billion). The aviation industry supports almost 1 million jobs and invests £1.7 billion (around €1.9 billion), every year in research and development.
Last year, UK airports handled over 250 million passengers, up on 2014, as well as handling 2.3 million tonnes of freight. Already, Heathrow is the busiest 2-runway airport in the world and Gatwick the busiest single runway airport. Indeed, the London system will be almost entirely full by 2030, with the exception of a small amount of capacity at Luton, and that will be taken up soon afterwards.
If the UK was to do nothing, the cost is still expected to be significant, amounting to more than £20 billion (around €22.37 billion) over 60 years, through delays, fewer flights and passengers having to fly from airports elsewhere. In addition, the wider impacts on the UK economy are in the region of £30 to £45 billion (between €33.56 and €50.33 billion).
What a new runway for Heathrow will deliver
A new runway at Heathrow will bring economic benefits to passengers and the wider economy worth up to £61 billion (around €68.23 billion), over 60 years. Up to 77,000 additional local jobs are expected to be created over the next 14 years (i.e. by 2030) and the airport has committed to create 5,000 new apprenticeships over the same period.
Expansion at the airport will better connect the UK to long haul destinations across the globe and to growing world markets. including in Asia and South America, bringing a significant boost to trade.
Heathrow already handles more freight by value than all other UK airports combined, accounting for 31% of the UK’s non-EU trade, and its expansion will create even more opportunities for UK business to get their goods to new markets. Access to Heathrow is more resilient and it is therefore better placed as the national freight hub.
While there are clear gains for business, passengers will also benefit from a greater choice of airlines, destinations and flight times. They should also see lower fares relative to no expansion, fewer delays, better connections to destinations including to Asia and South America.
This was a view accepted by the Airports Commission, chaired by Sir Howard Davies, which anticipated that a new runway would bring in new capacity to meet demand and allow greater levels of competition, lowering fares, even after taking into account the costs of construction.
The airport’s location means it is more accessible to business and the rest of the UK, both by road and rail and in addition to the benefits identified by the commission, this scheme will deliver the connectivity and hub capacity the UK needs to compete with fast growing European and Middle Eastern hubs.
A third runway will also support new connections to the UK’s regions, as well as safeguarding existing domestic routes. Heathrow has proposed a further six new routes, to Belfast International, Liverpool, Newquay, Humberside, Prestwick and Durham Tees Valley to be added after expansion. The eight existing routes offered in the announcement: are: Edinburgh, Glasgow, Inverness, Aberdeen, Belfast City, Manchester, Newcastle and Leeds Bradford. This would provide 14 domestic routes in total, and spread benefits right across the country.
The Government has confirmed that it will also take all necessary steps including, where appropriate, ring-fencing a suitable proportion of new slots for domestic routes, to ensure enhanced connectivity within the UK.
Who will pay for the new runway?
The UK Government has confirmed that these expansion costs will be paid for by the private sector, not by the taxpayer. It will be for the Civil Aviation Authority (CAA), as the independent industry regulator, to work with Heathrow Airport Ltd and the airlines operating at the airport, on the detailed design and costs, to ensure the scheme remains affordable. The government expects the industry to work together to drive down costs to benefit passengers. The aim should be to deliver a plan for expansion that keeps landing charges close to current levels.
The new runway will deliver major economic and strategic benefits to the UK and for an economy, which works for everyone, but it must be delivered without hitting passengers in the pocket. The Airports Commission was clear that this is achievable, as is the CAA.
Transport Secretary Grayling makes three assurances
The Minister has made three assurances in his statement to the House of Commons. Firstly, to make Heathrow a better neighbour by tackling air quality and noise, and meet the UK’s obligations on carbon both during and after construction.
In relation to noise, despite the increase in flights, Heathrow Airport Ltd has made firm commitments to noise reduction. The government has proposed that a six-and-a-half hour ban on scheduled night flights will be introduced for the first time at Heathrow and will make more stringent night noise restrictions a requirement of expansion. The timing of this ban will be determined through consultation.
Furthermore, the government proposes new legally binding noise targets, encouraging the use of quieter aircraft, and a more reliable and predictable timetable of respite for those living under the final flight path. The airport has also pledged to provide over £700 million, (around €782.84 million), for noise insulation for residential properties.
In addition, modernising use of UK air space will boost the sector and will help to further reduce noise and carbon emissions. Proposals will be brought forward to support improvements to airspace and how to manage noise, including the way in which affected communities can best be engaged and whether there is a role for a new independent aviation noise body, as the Airports Commission recommended.
The Airports Commission concluded that even with the extra flights added by the airport’s expansion fewer people would be affected by noise from Heathrow by 2030 than are today.
Following the clear recommendation of the Airports Commission, the government conducted more work on the environmental impact. That work is now complete and confirms that a new runway at Heathrow is deliverable within air quality limits, if necessary mitigation measures are put in place, in line with the ‘National air quality plan’, published in December 2015.
The UK has already achieved significant improvements in air quality across a range of pollutants. Emissions of nitrogen oxides in the UK fell by 41% between 2005 and 2014. Heathrow’s scheme includes plans for improved public transport links and for an ultra-low emissions zone for all airport vehicles by 2025. The government will make meeting air quality legal requirements a condition of planning approval.
These measures will complement the unprecedented UN global agreement achieved earlier this month to combat aviation emissions. Under the deal, airlines will offset their emissions with reductions from other sectors to deliver carbon neutral growth for the aviation sector from 2020.
Finally, the Department for Transport has also set up a working group with Her Majesty’s Treasury and the Department for the Environment Food and Rural Affairs on air quality. This is part of a 10 year project to accelerate improvements in air quality.
Mitigation measures to be put in place
The second commitment, aimed at making Heathrow a better neighbour, is a mitigation package for the local community most affected by expansion, worth up to £2.6 billion (around €2.91 billion). In addition is the pledge to provide over £700 million, (around €782.84 million), for noise insulation for residential properties, while £40 million, (around €44.72 million), will be provided to insulate and ventilate schools and other community buildings. For people with homes subject to compulsory purchase, they will receive 125% of full market value for their homes, plus stamp duty, legal fees and moving costs.
In addition, up to £450 million, (around €503.11 million), could be available to local authorities through business rate retention. A Community Compensation Fund could make a further £750 million, (around €838.52 million), available to local communities. This will be determined through the planning process.
Finally and following consultation the a six-and-a-half hour ban on scheduled night flights as referred to above, which will be introduced for the first time at Heathrow
This comprehensive package of mitigation measures, will be subject to consultation with the public, as part of the draft NPS consultation process. The measures will also be subject to regulatory approval by the CAA.
UK wide benefits
The third assurance given by the Minister was that an expanded Heathrow airport will benefit the whole of the UK; not just by creating jobs across the airport’s UK-wide supply chain, but by giving even more of the UK access to important international markets – by strengthening existing domestic links, and developing new connections to regions not currently served, which have already been discussed above.
In addition, the government wants to see the continued prosperity of the UK’s second busiest airport, and the world’s busiest single runway airport, Gatwick. It believes that Gatwick’s continued success will drive competition in the sector, “which is good for passengers and the prosperity of the nation, drawing inward investment, trade and growth”.
An end in sight
Transport Secretary Grayling has acknowledged that the issue of runway capacity in the south-east is one that has challenged successive administrations for decades and that there are strong feelings both for and against a third runway at Heathrow.
However, he was at pains to point out that this is not the same scheme that was supported in 2009. It does much more to mitigate environmental impacts, compensate communities and distribute benefits across the nation.
“This is an issue of national interest that touches every part of the UK, which is vital to the economic prosperity and global status of our nation” he said in commending the proposal to the House of Commons.
Heathrow statement on Government announcement
A Heathrow spokesperson said:
“We welcome the news that Heathrow is the Government’s preferred site for a new runway.
“Expansion of Heathrow is the only option that will connect all the UK to global growth, helping to build a stronger and fairer economy.
“We await the full details, but Heathrow stands ready to work with Government, businesses, airlines and our local communities to deliver an airport that is fair, affordable and secures the benefits of expansion for the whole of the UK.”
London City Airport CEO responds to Heathrow decision
Over at London City Airport, it’s CEO Declan Collier said the announcement was good news for business, good news for tourism and good news for Britain. “A new runway in the South East will create much needed capacity, helping secure the UK’s position as a global hub – never more important than in the current political climate”, he added.
He went on: “Approving development at London City Airport earlier this year showed the Government’s readiness to act in the best interests of the British economy as it will generate more economic activity and create more jobs at the airport. The aviation industry must now work with Government to ensure we continue to look to the future and can deliver in the short, medium and long term to keep Britain open for business.”
Gatwick not so happy
In a brief statement Gatwick Chief Executive Stewart Wingate, said:“We are disappointed as we do not believe this is the right answer for Britain. Gatwick has put forward a credible financeable and deliverable plan for expansion.
“It is a plan that can guarantee growth and guarantee certainty for Britain. We look forward to studying the full reasons behind the Government decision in detail.
“The challenges facing Heathrow have not changed. Our message today is that Gatwick stands ready to proceed when the time comes.”