George Trefgarne is CEO of Boscobel & Partners, an adviser to the Heathrow Hub extended runway consortium.
The Swedes, like the Germans, are good at inventing compound words, and here is a new one: Flygskam. It translates as “flight shame” and it is already having an impact, with the Swedish airports trade association reporting a four per cent decline in passenger numbers last year.
The Conservative Party is suffering from a British strain of this disease: Heathrow shame. Its symptoms include hiding behind a political face mask and nervously washing your hands with anti-bacterial gel at the mere mention of the nation’s hub airport.
The previous transport secretary, Chris Grayling, approved a third runway at Heathrow and Parliament voted in favour of it. But the current Prime Minister is uncomfortable with it, judging by his recent comments about “no immediate prospect of any bulldozers”, and he is apparently eager to stop it if he can.
Boris Johnson is right to be sceptical. A cynic will say his doubts are simply because Heathrow Airport Ltd is coincidentally due to submit its application for a Decision Consent Order to Grant Shapps around the time of the COP26 Climate Conference in Glasgow in November, or his promise to “lie down in front of the bulldozers” when he was Mayor for London. But the reality is that like so many things overseen by the Department for Transport in recent year, the third runway is a flawed scheme, beset with serious problems which may erupt whatever the outcome of an expected judgement by the Court of Appeal in coming weeks.
First, there is the cost. Heathrow Airport Ltd claims it will cost £14 billion. But that is a six years old number for a previously pared back scheme. Not only has the proposal since changed with, among other things, extra land take, they still have no confirmed means of getting the new runway over the M25 so close to the M4 junction, without causing years of traffic delays and construction chaos.
Critical elements, such as the business plan, Safety Case (necessary to show how the airport would be operated in practice) and the proposed new flight paths remain shrouded in secrecy. Put all this together and costs seem to be going through the roof. The Civil Aviation Authority recently refused to approve a £3 billion tranche of pre-application spending, triple the original estimate. Heathrow responded by announcing completion would be delayed three years until 2029.
Our estimate is the real cost is likely to be at least £38 billion. Who pays if there is a big cost overrun? The answer is, in the first instance, the punters. Heathrow is financed by passenger fees, already the highest in the world. It has wriggled out of a commitment to keep them flat and IAG, the owner of British Airways, reckons they could double to more than £40 each. The taxpayer is also on the hook for at least £5 billion of road and rail upgrades.
In order to make this complex project economic, Heathrow not only wants to increase passenger fees, it wants to add 50 per cent to its current capacity with an extra 260,000 flights annually, or another 700 departures and arrivals per day. Which leads us to the next point: how can this be compatible with the Government’s strict new limits for carbon emissions and air quality? And what about the extra noise over West London?
Supposing, for the sake of argument, it is either not compatible or the effect of “flight-shaming” is such that demand fails to arrive? What then? After years of paying out large dividends to its shareholders, Heathrow, already some £15 billion in debt, would currently struggle to absorb any cost overruns itself.
Messrs Johnson and Shapps will not be able to avoid this issue much longer. Some time in the next few weeks a judgement is expected from the Court of Appeal in a Judicial Review case brought by environmental campaigners and local authorities. We are supporting a parallel competition-based case brought by Heathrow Hub, an independent consortium which has proposed an alternative, extended runway (which came second in the process run by the Airports Commission).
Either the Government will win, in which case it will be game on with Heathrow’s planning application later in the year; or it will lose, in which case Ministers will, ironically, have to decide whether to take it to their favourite place: the Supreme Court.
If they decide to cancel the project, there will be uproar from the business community and the considerable Heathrow lobby in the Commons. Presumably, Heathrow itself would demand hundreds of millions of pounds in compensation. If they go ahead with it, then environmental campaigners and prominent London-based Conservatives – some of them in the Government, including trade minister Greg Hands (also chair of Shaun Bailey’s Mayoral campaign), environment minister Lord Goldsmith and Cabinet office minister Lord True – would instead kick up a big fuss, and all in time for the London Mayoral election in May.
There is actually a way out of this mess. The brains behind our cheaper, simpler and quieter extended runway concept – including Jock Lowe, a former Concorde pilot and some of the world’s leading engineering firms – anticipated the need to help politicians solve the Heathrow dilemma. The first phase of our proposal costs only £4.7 billion and would add only 70,000 additional flights. At that price, regulators need release no additional flights at all if they are not confident that carbon, air quality and noise limits could be met. In the meantime, the airport would operate more efficiently, with fewer delays, less taxiing and fewer track miles.
Our proposal came second in the Airports Commission process, which deemed it viable. And unlike the third runway brings no new communities into the noise footprint and has an independent Safety Case which has been shared with the CAA.
Under Section 6 of the National Planning Act, the secretary of state has a duty to consider a review if the circumstances change significantly after a major infrastructure project is approved by Parliament. In Heathrow’s case, the circumstances have obviously changed very materially. The best way forward for Johnson and Shapps would be to initiate such a review as soon as possible, before the Swedes invent another new word: Heathrowskam.