As widely expected, Reeves declared that a third runway is badly needed to support growth and that it would generate up to 100,000 new jobs.
She also criticised previous governments for having said they supported the third runway while avoiding doing anything about it. This showed a “lack of seriousness” about the economy, she said, and the government “can’t duck the issue any longer”.
Reeves said she is now inviting proposals to be brought forward this summer. “We will then take forward a full assessment through the airport national policy statement,” she said.
“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 added: “It will ensure that a third runway is delivered in line with our legal, environmental and climate objectives.”
Heathrow is not the only airport to get government backing for expansion. Reeves said that both Stansted and City airports already have government approval for their expansion and that a decision on plans by Gatwick and Luton airports would follow soon.
In another much-anticipated statement, Reeves said that the government will support the Lower Thames Crossing and that it will explore possible private finance options for the scheme. However, the £9bn scheme still does not have planning permission and then-transport secretary Louise Haigh decided last year that no decision will be made until May this year.
Reeves also outlined the government’s “new approach” to the planning system (summarised by prime minster Keir Starmer’s pre-election promise to “back the builders, not the blockers”) which is that the default answer to applications should be “yes”.
Admitting that she had been “genuinely shocked” since becoming chancellor by how slow the planning process is, Reeves said that the government has already started to streamline the process of increasing infrastructure applications, citing a reform to environmental regulations announced last week (see previous report here).
Developers will pay into a nature fund and will not have to worry about the “the bats and the newts,” she said.
Another key topic was the development of the Oxford-Cambridge corridor which Reeves said has the potential to become “Europe’s Silicon Valley”. Reeves outlined policies which she said would unlock £78bn for the UK economy by 2035. These include the proposed East-West Rail with a new mainline station at Tempsford.
She also announced that the Environment Agency has lifted its objections to a new development outside Cambridge that would unlock 4,500 new homes and associated community spaces such as schools and leisure facilities as well as office and laboratory space in Cambridge city centre.
Other measures announced included the go-ahead for water companies to spend £7.9bn over the next five years on projects including nine new reservoirs including one near Cambridge and another near Oxford.
Reaction from industry has been mostly positive.
Rico Wojtulewicz, head of policy and market insight at the National Federation of Builders said: “It is clear that without planning permission, the UK faces a range of critical barriers to growth. Too few homes have made housing unaffordable, limiting the workforce capacity of our towns, cities, and regions. An unwillingness to build reservoirs, treatment plants, pylons, and power stations has led to poor water quality and rising energy costs.
“Delays to road, rail, and airport projects have scaled back ambitions, increased transport emissions, and stifled clean energy innovation. Opposition to commercial premises, especially in regional plans, has deterred business from investing, expanding, and forming partnerships. We cannot even get the go ahead for schools, hospitals, and community spaces. We must accept that there is no growth without business and innovation, and no business without a connected world, workforce, and investment. The chancellor is correct to return her focus to fixing the primary barrier to UK growth: the broken planning system.”
Marie-Claude Hemming, director of operations for the Civil Engineering Contractors Association, said: “The government should be applauded in its commitment to airport expansion, which is an issue that has been
kicked into the long grass by successive administrations, but which is vital to the UK’s future as a global trading nation.
“In addition, the chancellor’s decision to amend HM Treasury’s ‘Green Book’ rules to further distribute the benefits of investment across the UK reflects a long-held CECA policy, and will lead to a wider distribution of economic growth across all parts of the country.
“We welcome the fact that the UK government has committed to unleashing the full potential of the UK economy through public and private investment in infrastructure.”
Heathrow expansion would be the largest privately-funded infrastructure project in Europe, added Hemming. And she added: “CECA members are poised and willing to work with the UK Government to accelerate project delivery so that businesses and communities across the UK can feel the benefits of investment as soon as possible, raising living standards in all parts of the country, as well as building the foundation of a stronger economy for the future”
Steve Wood, chief executive of the National Housebuilding Council, also welcomed the chancellor’s speech: “Getting Britain building again is essential for growth, and as the UK’s leading warranty provider for new build homes, we are encouraged to see the government’s commitment to removing blockages in the planning system including in the Oxford-Cambridge corridor,” he said.
Colin Wood, chief executive of AECOM’s Europe and India region said:
“The Government’s support for an expanded Heathrow Airport is a welcome move. Expansion is a vital step forward in securing growth and the UK’s ability to maintain its position on the global stage, while also addressing the need for increased capacity that will follow. Alongside development of the ten-year infrastructure strategy, this will provide the infrastructure sector with some certainty around project pipeline and delivery.
“Recent updates to the National Planning Policy Framework and the chancellor’s reforms to the planning system should fast-track much-needed infrastructure projects across all sectors, including housing developments, transport and energy systems. This significant overhaul of the UK’s planning system and a commitment to delivering the ten-year infrastructure strategy will be key to spurring investment and growth in the years to come.”
Environmental groups however are less satisfied with Labour’s approach to growth. Roger Mortlock, chief executive of the Campaign to Protect Rural England (CPRE), said: “The single biggest threat to the countryside is climate change. If the government expands Heathrow, Luton, City and Gatwick airports, the increase in carbon emissions will make a mockery of its commitment to reaching net zero by 2030.
“Airport expansion will do nothing to boost UK growth. There has been no net increase in air travel for business purposes or in jobs in air transport since 2007. Recent research from the New Economic Foundation indicates that airport expansion will drive significant tourism revenue abroad, not bring it to the UK. To create the jobs of the future we need investment in low-carbon industries and transport, not more unsustainable expansion of the UK’s airports.”
Got a story? Email news@theconstructionindex.co.uk
#Heathrow #runway #key #economic #growth