Perhaps the most interesting thing about Heathrow’s revived plan for a third runway, unveiled last week, was the relative lack of interest in it. Only one national newspaper put it on the front page. Outrage from opponents was muted: even the No Third Runway Coalition, which brings them all together, has published nothing on its website since the announcement.
This is not because everyone is now relaxed about increases in noise and pollution for up to 10 million people, rises in C02, the closure and diversion of Britain’s busiest road, the destruction of two entire villages and the eviction of thousands from their homes. Nor is it because everyone now agrees with the Chancellor, Rachel Reeves, that this two-mile concrete strip is Britain’s single most important growth project.
It is because informed people on all sides – except Reeves, of course – think the plan is a fantasy: certain not to happen, at least not without large amounts of public money.
Indeed, it’s not clear if even Heathrow itself wants to be taken seriously when it claims the first planes could fly in 10 years, that the scheme will be “100 per cent privately financed” at “no cost to the taxpayer”, that there will be “lower fares” as a result and that a 57 per cent increase in flights is “compatible with meeting our net zero commitments”.
The supposed cost – £49bn – is more than three times Heathrow’s total investment over the whole of the last two decades. And in the next few years, before work on the new runway begins, the airport separately plans a £10bn investment in its existing assets.
‘Rachel Reeves, I imagine, seized on this turkey because she was worried about growth and needed a big announcement’ (Photo: Ian Forsyth/Getty)Nearly £60bn to find, then (in practice, of course, certainly more). But Heathrow’s current net debt, £17bn, is already 80 per cent of its entire asset value. Would anyone really agree to lend them four or five times more, albeit spread over a long period and on a bigger asset base?
Even to finance that first £10bn of non-third runway investment, Heathrow seeks a 17 per cent rise in landing charges, currently averaging £28.46 per passenger. If the new runway were financed on the same basis, the charge would rise to around £60 to £90 (Heathrow says only that it hopes to keep it “below £50”). The airlines would have to pass that on. So much for the promise of “lower fares”.
The passenger experience would be worse, as well as more expensive. At least one of the two new terminals would not be on the Tube or the Elizabeth line; you’d take a shuttle train from the existing Terminal 5. The central-area terminals would be rebuilt, with most gates in satellites, and far more shuttle train rides. Driving from London to the current T5, you’d need to go right round the southern edge of the airport, because the A4 road would be closed.
The claim of zero taxpayer cost is equally dishonest. Transport for London says new ground infrastructure to get the extra passengers to Heathrow will cost £10bn. Heathrow’s own proposal document admits it will need “a shared vision with the Government and agreement on an appropriate mechanism for funding these investments”. Its plans for net zero, despite more flights, also depend on “financial incentives… from government” for lower-carbon fuels.
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The greatest risk to taxpayers, though, is that – as with HS2 – project costs, underplayed to get things started, rise. Heathrow then runs out of money, and the Government has to rescue the project.
Most fundamentally of all, not even the runway’s supposed beneficiaries, the airlines, really want it. If you’re British Airways, Heathrow’s main user, you currently control more than half the slots at Europe’s busiest and most lucrative airport. The deal on offer – raising your fares to fund others to compete with you – is unattractive. Yet most of the low-cost carriers, including Ryanair, are not interested either; Heathrow will always be too expensive for them.
We’ll now spend the next decade on debates, government announcements and court cases about Heathrow, all of them totally pointless. Let’s save ourselves the bother, and focus (as ministers, to be fair, are also doing) on the expansion plans of the other London and UK airports, almost every one of which is a cheaper, quicker and easier way of growing the economy, improving Britain’s already unrivalled international air links, increasing competition and cutting fares. They also further undermine the case for Heathrow expansion, such that if a third runway eventually did happen, nobody would want or need to fly from it.
Reeves, I imagine, seized on this turkey because she was worried about growth and needed a big announcement. But as we’ve come to realise, she and Starmer promising something is usually the ultimate sign that the opposite will happen. The same will be true of Heathrow’s third runway.
Andrew Gilligan is head of transport and infrastructure at Policy Exchange and was special adviser to former Prime Minister Rishi Sunak and transport adviser to Boris Johnson
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