Airport capacity
Heathrow Airport expansion and the government's airport policy.
Introduction
With permission Mr Speaker, I would like to make a statement about airport policy.
Last year, the independent Airports Commission delivered its ‘final report’ under the chairmanship of Sir Howard Davies. I would like to pay tribute to the quality and professionalism of their work.
It concluded that we needed more capacity in the south-east.
And put forward 3 viable options for expansion.
It unanimously agreed that the proposed north-west runway at Heathrow presented the strongest case.
In December, my predecessor came to the House to announce the government accepted the commission’s assessment of the need for additional capacity but made clear that further work was required before making a decision on the location of a new runway.
That work is now complete.
Mr Speaker, this is a momentous step for our country. The decisions taken earlier today, which I shall outline in a moment, are long overdue, but will serve our country for generations to come.
I know that some members of this House have strong convictions on this issue, and that everyone in this House will understand the significance of this announcement.
It is significant for jobs. For an economy which works for everyone. For passengers. For the global importance of our country. For the environment and people affected by expansion. And also, Mr Speaker, to send a clear message today that Britain is open for business.
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.
Heathrow Airport expansion: background and technical reports.
Process
Before I outline the decision the government has reached, I want to explain how today’s announcement fits within the planning process, and the opportunities members of this House will have to contribute.
In the new year, we will bring forward a draft ‘National policy statement’, which includes the details of the proposed scheme.
As required under legislation, this will be subject to a full and extensive public consultation, followed by a period of Parliamentary scrutiny.
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.
Industry
Mr Speaker, strong connections with global partners and the ability to trade with new and growing markets are vital to securing Britain’s place in the world.
The UK currently has the third-largest aviation network in the world, second only to the US and China and contributing over £22 billion to UK GDP.
We have the second largest aerospace manufacturing sector, which generates annual exports of £26 billion.
Our aviation industry supports almost 1 million jobs and invests £1.7 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.
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 we do nothing, the cost to our nation is significant, amounting to more than £20 billion over 60 years through delays, fewer flights and passengers having to fly from airports elsewhere.
In addition, the wider impacts on our economy are in the region of £30 to £45 billion.
Government’s conclusions
That is why the decision we have reached today is so important to the future of our country; not just to tackle the immediate shortage of airport capacity, but to set our country on a course to even greater prosperity for future generations.
I have spent, Mr Speaker, a considerable amount of time this summer visiting the different schemes, talking to their promoters, and assessing their strengths and weaknesses. I have been genuinely impressed by the quality of choice available to us, and the detailed work that has been put into the 3 plans. Any one of them would bring benefits to this country.
At the end of the work that the Airports Commission did, it made a clear and unanimous recommendation to the government – that we should accept the proposal to build a new north-west runway at Heathrow, subject to a package of measures to make expansion more acceptable to the airport’s local community.
Since the publication of that recommendation, my department has studied in detail both its report, but also new and supplementary information that has emerged about the different options since then.
The commission’s report and that subsequent information formed the basis of the discussion that took place this morning at the Cabinet sub-Committee.
As a result of that discussion, the government has decided to accept that recommendation. We believe that the expansion of Heathrow Airport and the north-west runway scheme – in combination with a significant package of supporting measures of the scale recommended by the Airports Commission - offers the greatest level of benefit to passengers, business and to help us deliver the broadest possible benefit to the whole of the UK.
It delivers the greatest economic and strategic benefits to our economy; it strengthens connectivity for passengers right across the UK; it offers a major boost to freight operators; it can be delivered within carbon and air quality limits; and crucially, it comes with world leading measures to limit the impacts on those living nearby.
Mr Speaker, 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.
The airport’s location means it is more accessible to business and the rest of the UK both by road and rail.
Access to Heathrow is more resilient and it is better placed as the national freight hub.
Ultimately, it brings the largest benefits to passengers and the wider economy, of up to £61 billion over 60 years.
But we are not alone in this view. UK airlines and business are also clear that Heathrow is the right place to expand.
Before continuing, Mr Speaker, I would like to pay genuine tribute to the promoters of the other 2 schemes considered by the sub-Committee. Both presented well-developed and compelling cases for new capacity.
In particular, I would like to place on record that Gatwick, despite not being selected today, remains a key part of our national transport picture and will continue to do so in future.
Concerns and evidence
I want to be very clear - expansion will not be at any cost to local people, to passengers, or to industry.
We have to make 3 assurances.
Firstly, to make Heathrow a better neighbour.
We must tackle air quality and noise, and meet our obligations on carbon both during and after construction.
Air quality
Air quality is a significant international health issue which this government takes very seriously. That’s why we undertook further work which confirms the commission’s original conclusion on air quality that a new runway at Heathrow is deliverable within air quality limits and we remain committed to ensuring this remains the case.
The airport has already committed to industry leading measures to mitigate air quality impacts.
Furthermore, this government will only grant development consent if we remain satisfied that a new runway will not impact on the UK’s compliance with its air quality obligations.
The broader issue of air quality is one that this government takes very seriously indeed, and the updated evidence base shows very clearly that the biggest challenge we face is not the expansion of an airport, but the level of emissions in built up urban areas more generally.
That is the very reason for our ‘National air quality plan’.
I can also tell the House that as part of our ongoing work on air quality, my department, along with Defra and the Treasury have embarked on a joint project to identify further ways in which we can tackle this issue. By the time a new runway opens in the next decade, we intend to have made very substantial progress indeed in tackling these air quality challenges across our nation as a whole.
Noise
On the issue of noise, no airport can be silent.
Technology is making aircraft quieter. The newer generation aircraft coming into service have a noise footprint typically 50% smaller on departure than the ones they are replacing, and at least 30% smaller on arrival.
Although planes are getting quieter, they still have an impact.
That is why we will expect a six-and-a-half hour ban on scheduled flights each night to be a requirement for development consent. This will also see the airport held to clear and legally-enforceable noise performance targets.
So even with expansion, fewer people will be affected by aircraft noise than today.
We also recognise the importance of providing local residents with a clear, predictable timetable of respite from aircraft noise. This is something local communities value today, and we will ensure this continues once a new runway is built.
Compensation
I recognise this decision will have a big impact on people who live close to Heathrow, which is why we have insisted on a world class package of supporting measures.
Those communities who are affected by the decision will be supported by up to £2.6 billion towards compensation, noise insulation for homes and schools, improvements to public facilities and other measures.
For those people whose homes need to be bought to make way for the new runway, Heathrow is planning to pay 25% above the full market value of their home and cover all costs including stamp duty, moving and legal fees; an offer significantly above the statutory requirement.
In addition, I can announce the creation of a community compensation fund and that local authorities will benefit from our policy of local retention of business rates.
Costs
The second assurance I want to give is on costs for airlines and passengers.
A new runway will bring in new capacity to meet demand and allow greater levels of competition, lowering fares relative to no expansion even after taking into account the costs of construction.
This is an investment in our country’s future and will deliver major economic and strategic benefits to the UK, but it must be delivered without hitting passengers in the pocket.
The Airports Commission was clear that this was achievable, as is the Civil Aviation Authority (CAA).
It’s really important to remember that this is not expansion at any cost, but the right scheme at the right price.
I expect the industry to work together to drive down costs for the benefit of passengers.
As the regulator, the CAA will have a vital part to play in achieving this and ensuring new capacity fosters competition. Their aim should be to deliver a plan for expansion that keeps landing charges close to current levels. I have full confidence in their ability to do so.
UK wide benefits
The third assurance I want to set out is around how the expanded 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.
The airport expects to add 6 more domestic routes across the UK by 2030, bringing the total to 14, strengthening links to existing nations and regions, such as Northern Ireland, Scotland and the north of England and also developing connections to new regions like the south-west.
I am determined that Heathrow will meet these pledges and government will hold the airport to account on this. Furthermore, government will take all necessary steps, including – where appropriate – ring fencing a suitable proportion of new slots for domestic routes through public service obligations, to ensure enhanced connectivity within all the UK.
Mr Speaker, it’s really important to say this is a decision in the national interest and not just the south-east.
Other measures
So a new runway will strengthen the aviation sector across the whole nation. But we can do even more.
Our airspace is out of date. Modernising it will boost the sector, and will help to further reduce noise and carbon emissions.
We will soon bring forward proposals 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 such as the commission recommended.
Process – next steps
Finally, let me turn to what happens next.
Mr Speaker, there have been suggestions in the media recently that this process has slowed down, or somehow delays construction.
In fact, the opposite is true.
Members will remember the saga of the planning process behind Terminal 5, which took years to resolve.
Following that, the ‘National policy statement’ process was designed by the last Labour government – through the 2008 Planning Act and subsequent 2011 Localism Act – to speed up major projects, but in an open and fair manner.
By setting out now why we believe there is a need for new runway capacity along with the supporting evidence, we will fulfil our legal obligations to consult with the public and allow members the opportunity to vote before it becomes national policy. That is what the law requires.
This means Heathrow is able to bring forward a planning application, safe in the knowledge that the high-level arguments have been settled and won’t be reopened.
Today the government has reached a view on its preferred scheme, and the ‘National policy statement’ we publish in the new year will set out in more detail why we think it is the right one for the UK.
It will also set out in more detail the conditions we wish to place on the development, including the supporting measures I outlined earlier.
We want to make sure that we have considered all the evidence, and heard the voices of all those that may be affected, and all that could benefit as well.
The consultation will start in the new year. And I can announce today that I have appointed Sir Jeremy Sullivan, the former Senior President of Tribunals, to oversee the consultation process. This is an independent role, and Sir Jeremy will be responsible for holding government to account and ensure best practice is upheld.
Ending
The issue of runway capacity in the south-east is one that has challenged successive administrations for decades.
There are strong feelings both for and against a third runway at Heathrow.
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.
Mr Speaker, I commend this statement to the House.