Congratulations on your appointment as Transport Secretary. I remember sitting round the Shadow Cabinet table with you when you held this brief in opposition; and know how passionate you are about modernising our infrastructure And I was delighted to hear that you are keen to press ahead at speed.
In the post-Brexit vote Britain, the new Government needs to show that the economy can keep moving, and to send a signal that Britain is investing and open for business. There are some projects which the Government can quickly green light, such as licenses for shale gas in Lancashire and – after what I hope is a brief pause for reflection – Hinkley Point C.
But the really big one is airport expansion in the South East. No one seriously disputes today that this is needed. Aviation is a hugely important industry, employing hundreds of thousands of people. We’re good at it. But the key hub airport, Heathrow, is today at bursting point. Without a speedy decision, we will increasingly see airlines heading off elsewhere. I recently visited Dublin Airport, which boast more connections to UK regional airports than Heathrow, and plans to capitalise on them.
As MP for Horsham for 18 years, I lived and – literally – breathed airports. Gatwick is outside my former constituency boundaries, but its flight paths are within them. The airport sustains many jobs among my former constituents, but it didn’t take long to persuade me that a second runway at Gatwick is the wrong answer. The environmental damage would be huge; the logistical burden on surface infrastructure insurmountable; and in the end it isn’t where the airlines want to be. And in reality, I suspect Gatwick is at least as interested in frustrating Heathrow’s expansion as in developing its own new runway.
Fifteen years ago – way before Boris had thought of “Boris Island” – I thought the right answer was a new airport in the Thames estuary. I chaired a Parliamentary Group to promote it – with the current Shadow Chancellor, then an obscure Marxist backbencher, as my deputy. But Britain’s congenitally blinkered approach to big visionary projects killed it, and the moment for it has been and gone. It’ll happen someday, but not in my lifetime.
So that brings us back to Heathrow. Is there a perfect Heathrow solution? Probably not: today you’d never start to build an airport there. But we do need to consider why the classic Third Runway option, which has been around forever, has been stalled for so long. It’s because it’s fundamentally toxic.
It’s incredibly expensive: £15.7bn. According to the Airports Commission, funding it would require massive capital markets activity, and would mean creating a new corporate entity the size of National Grid. The costs of this would be passed on to airlines and consumers via a significant increase in the air passenger levy to some £32 – up from £20 now. BA, Heathrow’s biggest user, who would effectively pay half the cost, are going nuts at the prospect. Willie Walsh, CEO of BA’s parent, IAG (International Airlines Group), says the cost is “prohibitive” and “indefensible”. It might even require a Treasury guarantee, since Heathrow’s shareholders would struggle to raise the equity without one.
And it’s politically toxic. It’s the most disruptive option, the most intrusive, the one that is guaranteed to maximise opposition and hostility, cause the most judicial reviews – and has as a result the greatest degree of execution risk.
So that leaves the third proposal: the Heathrow Hub. This intrigued me as soon as I read about it. It isn’t a third runway at all. The plan is to extend the existing northern runway. It’s the kind of innovative, entrepreneurial, left-field thinking that we too readily kill off in this country.
First, it is cheaper. The first phase, to extend the runway taking advantage of spare terminal capacity, would cost just £3.7 billion and the full scheme less than £10 billion. The first phase could be funded out of Heathrow’s existing cash flows, and would have almost no impact on air passenger charges.
Second, it’s quicker. The first planes could be taking off in 2023, compared with 2027 for the third runway.
Third, it is simpler and less disruptive. One reason the third runway is so expensive is it would require the demolition of some 783 houses in three villages, and also the Home Office’s immigration facilities and the important Lakeside Energy from Waste Plant. The extended runway would simply see the demolition of 242 houses which are already uncomfortably placed at the end of the existing runway.
Fourth, there is noise. An extended runway would bring no new people into the noise footprint, and enable a structured respite plan which would bring relief to many of those currently affected by noise. The Third Runway, by contrast, would require complex new flight paths across London, bringing hundreds of thousands of people into the noise footprint for the first time.
Fifth is politics. An extended runway is not a Third Runway. For all those people who have opposed a Third Runway, many of who know in their hearts that additional runway capacity is urgently needed, this is a way out.
So why hasn’t the Heathrow Hub already been chosen? There was no huge corporation behind it. It started as the brainchild of Jock Lowe, a brilliant former Concorde pilot. So it got pigeon-holed as a wacky, non-serious wheeze- interesting, but not a runner. But Jock got investors behind it, and commissioned loads of outside work to test the idea thoroughly. It’s passed every test. The safety test. The financial test. The economic test. All of the myriad technical tests. It passed muster with the Davies Commission. The airlines like it, as does the CAA. Truthfully, I expected at every stage that someone would come up with a showstopper reason why the Heathrow Hub can’t possibly work. No one has come up with a showstopper. It really does work. It’s cheaper. It’s quicker. It’s less disruptive. It’s less politically toxic.
Yes, it’s new. Yes, it’s innovative. Yes, it’s entrepreneurial. But since when did any of that become a reason not to embrace something? At its best, this country has been the hub of innovation and enterprise. In the new world of Brexit Britain we need to double and redouble it. So let’s embrace this Heathrow Hub and show that Britain is open for business. It could be a fantastic emblem for the new post-Brexit Britain.