The Government’s decision to give the go-ahead to the second runway at Gatwick is welcome and good news.
Economically, it means billions of pounds in additional growth and thousands of new jobs. Strategically, it boosts the UK’s position as an international travel hub – preventing the loss of momentum and opportunities to competitors like Amsterdam’s Schiphol airport.
Fiscally, it’s good news for the Government too. The project will generate a lot of additional tax revenue, and a concrete basis for economic optimism may give the Office for Budget Responsibility (OBR) sufficient reason to raise its forecasts. In our slightly bizarre era, it’s the OBR’s spreadsheet wizards who get to determine how much spending or borrowing Rachel Reeves is allowed come Budget-time, so that matters more in the short-term than you might imagine.
In terms of quality of life, it’ll mean continued improvements in business and leisure travel connectivity around the globe for Brits, over and above the bean-counting upsides.
Even better from the Treasury’s perspective, the second runway is a privately financed initiative, so the nation and the Government not only get these goodies, they get them without additional cost to the cash-starved Exchequer.
Put like that, the amazing thing about this news is not that it’s happened but that it didn’t happen sooner.
The story of Westminster’s can-kicking over airport expansions is lengthy and depressing. It’s now 24 years since we last built a full-length runway. Istanbul airport has built five new runways in the past decade, while the United Kingdom spent two and a half decades failing to decide whether we should build any.
To some extent, that’s simply part of our national infrastructure paralysis. The same toxic combination of Nimbyism, short-termism, over-regulation and chronic indecision has left our famously rainy island facing water shortages because we haven’t built any reservoirs since 1992.
Airport infrastructure, however, faces other political challenges over and above the strictures of the planning system. This can be seen in the fact that the most vocal criticism of this positive Gatwick decision comes from the environmental movement. Put simply, the growth and other benefits of a new runway have been delayed because they have come into conflict with the net zero agenda.
Officially, of course, there’s no tension at all between net zero and economic growth. In the same way that officially the Employment Rights Act won’t increase unemployment, and that it’s just a coincidence that after years of deliberately driving up energy costs, we now have a cost of living crisis and a dying steel industry.
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It’s obvious that there is a tension, but Westminster’s cross-party culture of taboos means it is politically unpalatable to acknowledge it. In truth, there are ways to become more green as an economy which are less costly and damaging to growth than other ways – but for some years it’s been taboo to even allow that there is a cost in doing so at all.
This is where the Gatwick decision is so interesting, because it reveals both that these tensions exist and that the Government privately knows that it is on the horns of a dilemma between two competing priorities.
Growth, remember, is this government’s untrammelled, absolute number-one priority. The Labour manifesto at the last election made unambiguously clear that growth is the sine qua non for a comfortable, high-employment, healthy nation with well-funded public services, and therefore pledged that it would stop at nothing to deliver it.
That was a wise realisation – and as we can see in the current opinion polls, without growth it is in real political trouble on every other aspect of policy delivery, because it can’t spend what it might like and instead must tax and borrow more than we can afford.
But while growth is the Government’s stated political goal, net zero is a deeply entrenched article of faith as well as a manifesto pledge in its own right. The Government hasn’t abandoned that agenda – indeed, Ed Miliband held fast to his post in the recent Cabinet reshuffle and remains popular within his party as someone who has hammered out a redoubtable personal position as net zero’s top government champion.
Of course, while some environmentalist critics make out that airport expansion – or in some cases, mass air travel at all – is incompatible with a greener economy, the reality is more subtle. Since 1990, the standard climate emissions benchmark date, CO2 emitted per air passenger per kilometre, has fallen by more than half, via significant logistical and engineering innovations.
Nonetheless, the fact remains that this decision reflects shifting priorities. We don’t know exactly what form the debates have taken within Cabinet over the runway issue, but we do know that within recent memory, Miliband was publicly committed to voting against Heathrow expansion, for example. The fact that this time the Treasury has got its way is itself a sign that the Government is starting to give more weight to the search for growth over other considerations, even major ones.
While the right decision has been reached this time, that doesn’t signal an end to the Government’s increasingly uncomfortable attempt to keep one foot planted on the net zero train and the other on the growth train at the same time. Economic reality means the two tracks are diverging, and riding both will require the Government to do the splits at ever more extreme angles.
Eventually, that acrobatic feat will no longer be possible to sustain. Nigel Farage’s Reform and Kemi Badenoch’s Conservatives have already identified the opportunity to pressure the Government to choose growth over net zero, while the new Green Party leader, “eco–populist” Zack Polanski, is poised to hammer Labour from the left. Jumping in either direction is going to hurt.
Mark Wallace is chief executive of Total Politics Group
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