LONDON (AP) — The U.K. government is backing the construction of a third runway at London’s Heathrow Airport, Treasury chief Rachel Reeves said Wednesday in a speech designed to signal to the business world that the new Labour government is serious about turning around the economy.
Another runway at the U.K.’s main airport, she said, will bolster the country’s long-term economic growth potential by boosting investment, increasing exports, and making the U.K. more open and more connected to the rest of the world.
“We cannot duck the decision any longer," she said. “The case is stronger than ever.”
Reeves said the government was inviting proposals over its construction by the summer and that it would then make a full assessment of the pros and cons of expanding Heathrow.
“This will ensure that the project is value for money and our clear expectation is that any associated service transport costs will be financed through private funding,” she said.
For decades, campaigners have opposed a third runway on environmental concerns and Reeves' announcement will likely face vociferous opposition from campaigning groups, such as Greenpeace and Just Stop Oil, and from numerous fellow members of the Labour Party, including Mayor of London Sadiq Khan.
Khan confirmed that he remained opposed to a new runway because of the “severe impact it will have on noise, air pollution and meeting our climate change targets."
He said he will look at the new proposals carefully, including the impact it will have on people living in the area and the huge knock-on effects for our transport infrastructure.
“Despite the progress that’s been made in the aviation sector to make it more sustainable, I’m simply not convinced that you can have hundreds of thousands of additional flights at Heathrow every year without a hugely damaging impact on our environment," he said.
In her speech, Reeves insisted the runway will be “delivered in line with our legal, environmental and climate objectives."
A third runway at Heathrow has been discussed since 1946 in the aftermath of World War II, but has never got off the ground because of many reasons, including changes of government as well as legal challenges. Meanwhile, other European hub airports, have grown. Paris' Charles de Gaulle airport has four runways, while Amsterdam's Schiphol has six.
Heathrow’s plan to build a third runway received parliamentary approval in June 2018, but has been delayed by legal challenges and the coronavirus pandemic. Heathrow's chief executive, Thomas Woldbye, has said that he wouldn't continue developing the project without the government confirming that it wants expansion.
Woldbye described Reeves' speech as “the bold, responsible vision the U.K. needs to thrive in the 21st century."
Reeves' support for a third runway came in a wide-ranging speech on boosting U.K. growth rates, which have been historically low since the 2008 global financial crisis for a variety of reasons.
She also outlined plans for the construction of nine new water reservoirs, pledged to create a Silicon Valley-like technology hub between the two university towns of Oxford and Cambridge, back the regeneration of the area around Manchester United's Old Trafford soccer stadium, as as well as a “reset” of the U.K.'s post-Brexit economic relations with the European Union.
The Labour government badly needs growth to increase over the coming years, so it can lift living standards following the economic shocks of the pandemic and the cost-of-living crisis, and to get money into ailing public services.
Since taking office in July, Reeves and Prime Minister Keir Starmer have been criticized for talking down the economy they inherited from the previous Conservative administration, and for increasing taxes on businesses, a combination that critics argue led to a growth downturn in the past few months and the sharp downturn in the government's ratings in opinion polls.
Though a third runway won't do much to bolster economic growth in the near-term as it would take a decade to build, Reeves hopes the announcement in itself will provide investors with a signal that the government is serious about turning the economy around.
“We want to do things now, to turn around the performance, and we want to give businesses and investors confidence that this is a country to start doing things, to start making things in again," she said.
The construction of a third runway would require more than 700 houses to be demolished and sections of the M25 motorway, which encircles London, to be moved into a tunnel.
The business world has long supported the creation of a third runway at Heathrow, which is operating at near full-capacity, which often means planes circling the capital before they can land.
