In today’s speech supporting infrastructure investment, Rachel Reeves has indicated that that growth is the word of the day — and she isn’t wrong.
Look at productivity, for example. The UK’s productivity per worker has barely risen above 2007 levels. This has crushed our salaries, innovation, and most importantly, our standard of living — and it is fundamentally connected to what the UK has permitted to be (or not to be) built.
If the UK cannot supply the necessary roads, energy, or runway for bringing in more investment, then productivity slumps. Heathrow’s expansion is the metaphor for this.
Heathrow is one of the most busiest airports in the world, despite its antiquated infrastructure — punching above its weight with only two runways, against Atlanta’s 5, Schiphol’s 6, and Dubai’s proposed 5. Plans to expand the airport have been in the works since 2012 under the Airports Commission, but have until now, been taboo for parties Red, Yellow, Green, and Blue.
Local NIMBYs should also be glad of this expansion
During Theresa May’s Premiership, a third runway received the green light, only for it to be crushed against the rocks of bureaucratic and political inertia. But the case for expansion is clear — demand for travelling to Britain has surpassed supply and now is finally the time to act.
Opponents come from a loosely knit group of local NIMBYs, who don’t want more planes in the skies above their suburban gardens and anti-prosperity environmentalists who query the ability of the government to meet Net Zero (despite clear indications that it will not impact Carbon Budgets or overall climate goals).
De-growther environmentalists should not be worried. Heathrow’s expansion would permit a significant signal of confidence in Britain’s burgeoning Sustainable Aviation Fuel industry, with Heathrow likely insisting that cleaner, more modern aircraft only be permitted to enter the airport as part of its deal with the government.
Local NIMBYs should also be glad of this expansion. Whilst there may be some disruption in the short term as the runway is built, at least 15% of people under current flight paths will be relieved of the noise of over-flying aircraft as routes are diverted.
An additional runway may also decrease the noisy and polluting “holding stacks” of aircraft looking to land, but do not have the runway space to do so. Meanwhile, the local economy benefits will be multifaceted, whether through higher local employment and investment in local infrastructure to support the new airport. As with any project of this scheme, locals always benefit in the medium to long run — they will be more than compensated for their short-term inconveniences.
Brits should rejoice at this announcement of support. Heathrow’s expansion could see the ticket prices for getting away fall by up to 20%, whilst highstreets and hospitality venues, in desperate need of support, would experience a surge of tourists and foreign visitors.
Heathrow is the first serious growth test for the government
Heathrow, as well as proposed capacity-increases for Luton and Gatwick, is the first serious growth test for the government. The City and international investors will be looking to see how enthusiastically the government supports and executes this critical project. Whitehall should look to make a clear differentiation between the disaster of HS2’s execution, and a rapid, effective implementation of infrastructure investment.
Should the Chancellor pass this test, the UK can expect significant gains in investment, a rallying of confidence in UK bonds, and relief from the pro-growth voices in her party, and around the UK.
Heathrow is vitally important for the UK — those of us on the free-market right are wishing her all the best as she looks to get Britain going again. The proof, as is always, is in the tarmac-covered pudding.
Maxwell Marlow is director of research at the Adam Smith Institute
