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Business “tearing its hair out” as Government ducks runway decision

Business blasts the government for delaying a decision on siting of a new south east runway and kicking it into the summer grass. Political considerations over the London mayoral elections are seen to be behind the move to duck out of the decision.

Prime Minister David Cameron has been heavily criticised by business lobby groups for putting short term political interest before the long term interests of the country as he once again ducked the difficult decision over airport expansion in the south east.

Despite Sir Howard Davies’ Airports Commission coming down firmly behind Heathrow as the choice for a third runway, Government decided on Thursday evening that, although it accepted that the case had been made for airport expansion in the south east, more time was needed to "develop the best possible package of measures to mitigate the impacts on local people and the environment".

"The National Infrastructure Commission was set up just two months ago to take an evidence-based approach to our needs. We cannot fall into the habit of simply commissioning new evidence, instead of the Government taking the tough decisions needed at the end of the process" - CBI

Government highlighted that it accepted the Davies commission’s shortlist of options for expansion, which includes two optiokns at Heathrow and one at Gatwick and said it had also identified the most appropriate way of delivering planning consents for new capacity.

However, in a statement by Transport Secretary Patrick McLaughlin, government said it wants more work on air quality and environmental risks and has put the decision off until the summer, after the elections for the London Mayor in which both Tory and Labour candidates – Zak Goldsmith and Sadiq Khan strongly oppose the Heathrow option.

The Airports Commission’s air quality analysis will be tested using the latest projected future concentrations of nitrogen dioxide, Government said.

“The next step is to continue to develop the best possible package of measures to mitigate the impacts on local people and the environment. This will include a package for local communities to include compensation, maximising local economic opportunities through new jobs and apprenticeships, and measures to tackle noise,” it announced.

More work is to be done on environmental impacts. “The government expects the airports to put forward ambitious solutions,” Government said.

“The case for aviation expansion is clear – but it’s vitally important we get the decision right so that it will benefit generations to come. We will undertake more work on environmental impacts, including air quality, noise and carbon,” said Transport Secretary Patrick McLoughlin.

“We must develop the best possible package of measures to mitigate the impacts on local people. We will continue work on all the shortlisted locations, so that the timetable for more capacity set out by Sir Howard is met.

“At the first opportunity I will make a statement to the House to make clear our plans.”

Pressure group Let Britain Fly criticised the government for further delaying a final decision.

  “The business community will be rightly angered by the latest delay in a final decision to implement the Airports Commission’s recommendation to expand Heathrow,” said its director Gavin Hayes.

“Instead of showing strong leadership the Prime Minister has yet again decided to put short-term political interests before the long-term national interest and kicked the can down the road for another six months. This latest fudge is all about political expediency not about doing what is right for our economy." 



He went on: “Having already spent three years and millions of pounds of tax-payer money looking at the issue in a Commission, including extensive analysis on the economic and environmental impact, this further delay is unacceptable.

Such indecision risks undermining our economic competiveness and our global competitors will be rubbing their hands in glee.

“We must develop the best possible package of measures to mitigate the impacts on local people. We will continue work on all the shortlisted locations, so that the timetable for more capacity set out by Sir Howard is met" - Patrick McLoughlin

“And the message this sends out to investors is quite frankly a disaster.

The government claim they have a ‘long-term economic plan’ but seem incapable of making the big strategic decisions that will deliver future jobs and growth.”

The Institute of Directors director general Simon Walker said business leaders will be “tearing their hair out at the news”. 

“Of course this is difficult choice, which is the reason the Government set up the Airports Commission to make a recommendation balancing economic needs, environmental concerns and the impact on local residents. We have to ask now, what was the point of the Commission if the Government still fails to act?," he said.

“The Government has set the very ambitious target of increasing UK exports to £1 trillion a year by 2020. If they can’t fly to emerging markets to make deals, our members are going to find it very hard to meet this aspiration. At this stage, IoD members care much more about a decision being made, than whether the new runway is built at Heathrow or Gatwick.”

CBI Director-General Carlyn Fairbairn said that the delay was “deeply disappointing”.

 “We urgently need to increase our runway capacity to spur trade growth, investment and job creation. Just eight new routes to emerging markets could boost our exports by up to £1 billion a year.

“But by 2025 - the earliest a new runway would be built - London’s airports could already be operating at full capacity and the longer we wait the further we fall behind the likes of Amsterdam and Paris. If we don’t have a new runway up and running by 2030 the cost to the UK will be as much as £5.3 billion a year in lost trade to the BRICs alone.

“It is of course essential that environmental conditions are met. But the Airports Commission spent three years analysing impartial evidence, at a cost of £20M, and the National Infrastructure Commission was set up just two months ago to take an evidence-based approach to our needs. We cannot fall into the habit of simply commissioning new evidence, instead of the Government taking the tough decisions needed at the end of the process.”

From the infrastructure industry, reaction was no less hard hitting. Here is this from  Richard Robinson, chief executive - civil infrastructure, Europe, Middle East, India and Africa. “Business needed an unequivocal green light from government. Instead, after much dithering, delay and inaction, industry has been hit with yet another deferred decision, further numbing the pace of progress. Short-term political gain has taken precedence over what is right for the country. This is no way to plan critical infrastructure of national importance," he said.

“Years of political procrastination have impeded many firms’ ability to plan for their future in the UK. The country is already lagging behind global rivals with nearly double our aviation capacity and far more nimble mechanisms for delivering new infrastructure. Further postponement could cripple the country’s competitiveness. The 2015 CBI/AECOM Infrastructure Survey found that 50% of firms in London have been negatively impacted by the ongoing failure to tackle aviation capacity.

“Without the ability to better connect to growing economies, the UK’s own growth could be constrained for generations to come. Industry looks to government to end decades of decision paralysis over a new runway in the South East so that economic growth is not further stifled.” 

 

If you would like to contact Jackie Whitelaw about this, or any other story, please email jackie.whitelaw@infrastructure-intelligence.com.