BUSINESS NEWS heathrow:An independent report is scathing on merits of a third runway. By Ian Taylor
DfT spotlights ‘adverse impacts’ of third runway
Heathrow Airport
A Department for Transport Appraisal of Sustainability (AoS) released alongside the draft statement “identifies major adverse impacts” from a third runway. It concludes: “The balance of
effects is mixed [and] are not evenly distributed, with some communities experiencing a greater share.” The NEF notes these findings
“appear at odds” with the HENPS statement that not increasing capacity at Heathrow would be “detrimental to the UK economy”. It points out the government
has designated a Heathrow third runway as “critical national growth infrastructure” owing to “the clear
need for the identified expansion and the economic and strategic benefits it would provide”. The NEF argues the government
assessments “highlight the lack of a viable economic case for the construction of a third runway . . . [when] exceptional disruption and congestion will be created in west London, millions of households will be exposed to new or worsened air quality and noise, and significant climate damage will result”. It also notes “the potential drain
on public resources” in providing surface access, planning and construction, plus additional carbon.
NEF report queries claim regions will enjoy gains from expansion
The NEF describes the official assessment of the regional GDP impacts of expanding Heathrow as “negligible in all cases bar London”. It notes the government claim
that “up to 40% of the growth benefits of expansion” are forecast to come outside London and the southeast, saying it cannot find a source for this figure. But it quotes the external peer
reviewer of the forecasts who suggests: “It would be erroneous to claim a broad distribution of the gains from Heathrow to regions on the basis of the modelling.” NEF analysis suggests “two-
thirds of the aviation-linked jobs created at Heathrow represent jobs
displaced from other parts of the UK”, with an “acute reduction” in the West Midlands, east of England and southwest. This is partly because the DfT’s latest forecasts suggest passenger growth at Heathrow will come at the expense of other UK airports. Gatwick, Luton and London City are forecast to lose about 13 million passengers a year by 2040 while Birmingham airport could lose 7.5 million by 2050.
Runway ‘offers very small return’ Ian Taylor
Construction of a Heathrow third runway will boost the UK economy by a fraction of a percent, mainly from the impact of the construction work itself, and have “negligible” economic impact on regions outside London while drawing passengers away from other UK airports. That is according to a damning
report by research and policy institute the New Economics Foundation (NEF) on the government’s draft Heathrow Expansion National Policy Statement (HENPS) published in June. The Department for Transport
(DfT) analysis accompanying the statement estimates impact on GDP at a mere 0.03% to 0.05% by 2056, equivalent to up to £2.6 billion and a fraction of the GDP boost forecast
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by the 2015 Airports Commission report that previously presented the case for Heathrow expansion. The NEF argues: “This represents
a very small return on a scheme estimated to cost £50 billion, plus public transport upgrade costs.” It notes the DfT analysis was
commissioned from Frontier Economics, which “has previously worked extensively for Heathrow”, and describes the “very large decline” in forecast GDP impact as “striking”. The NEF further notes a peer
review of the DfT-commissioned model describes the report as “opaque” and flags its “double counting” of impacts. The same review found 88% of the GDP benefits would be from spending on construction. The NEF accuses the government
of “cherry-picking” the upper estimates of benefits in its policy
statement when these are contradicted by its own cost-benefit analysis. It points out the DfT has
significantly revised its forecast of business travel demand, halving the estimate of corporate travellers at UK airports by 2050, with the NEF concluding the DfT recognises forecasts used by the Airports Commission “were systematically wrong”. Yet it notes the HENPS references the commission figures “multiple times” and not the DfT assessments. The NEF also notes the DfT
expects the jobs created by the scheme to “primarily represent jobs displaced from around the wider UK”, suggesting 15,000-plus jobs would be lost in the UK regions. Yet the HENPS states expanding
Heathrow could deliver “over 60,000 new jobs . . . and over £40 billion of benefits” and designates it as “Critical
Heidi Alexander
National Growth Infrastructure . . . driving economic growth across every region of the UK”. The DfT hailed publication of the
policy statement as “a key milestone in delivering a final planning decision”. Transport secretary Heidi Alexander declared: “We’re determined to move quickly and responsibly.” Consultation on the policy
statement was due to end on September 1.
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