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Rachel Reeves has backed the building of a third runway at Heathrow as she made it clear she is banking on planning reform and infrastructure projects to deliver the economic growth she has promised.
Speaking in Oxfordshire near the location of what she hopes will become the UK’s version of silicon valley, the chancellor risked a backlash from her own party and climate change activists by making it clear she will back the expansion of Heathrow and other airports around the UK.
It was part of a wider pitch that for too long the UK has been held up by “naysayers and blockers” preventing major infrastructure projects from going forward.
Ms Reeves mocked the way a £100 million bat tunnel had added costs and bureaucracy to the much maligned High Speed 2 HS2) rail project, and warned that such delays are “unsustainable” going forward.
However, as she finished speaking senior figures in the party including London Mayor Sadiq Khan and millionaire donor Dale Vince made it clear they opposed Heathrow.
Energy secretary Ed Miliband, who has long opposed aviation expansion, was noticeably absent at prime minister’s questions (PMQs) where Sir Keir Starmer hailed the speech.
But both Starmer and Reeves were also hit with questions from the Tories and others over whether they will rein back on anti-growth policies such as workers’ rights in in the new employment legislation.
Sir Keir refused to back down on employment reform while Ms Reeves also failed to rule out further tax rises in a potential sign of what is to come in her spring statement as she struggles to balance the books.
There was also criticism of a lack of movement on resetting the UK’s relationship with the EU, as Ms Reeves stuck to the strict Brexit red lines of staying out of the customs union and single market which the Lib Dems warned “put a handbrake on growth”.
However, both the prime minister and chancellor wanted to focus on long-term infrastructure projects particularly Heathrow – ideas which Tory leader Kemi Badenoch claimed they had stolen from her party.
Ms Reeves said that expansion of Heathrow is “badly needed” because “for decades its growth has been constrained”.
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.
The airport needs to secure approval for a Development Consent Order to go ahead with the project.
Ms Reeves said: “I can confirm today that this Government supports a third runway at Heathrow and is inviting proposals to be brought forward by the summer.
“We will then take forward a full assessment through the Airports National Policy Statement.
“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.
“It will ensure that a third runway is delivered in line with our legal, environmental and climate objectives.”
Mr Reeves said that “by backing a third runway at Heathrow we can make Britain the world’s best-connected place to do business”.
“That is what it takes to make decisions in the national interest and that is what I mean by going further and faster to kick-start economic growth,” she added.
Heathrow chief executive Thomas Woldbye described the Chancellor’s speech as “the bold, responsible vision the UK needs to thrive in the 21st century”.
He went on: “It has given us the confidence to confirm our continued support for expanding Heathrow.
“Successfully delivering the project at pace requires policy change – particularly around necessary airspace modernisation and making the regulatory model fit for purpose.
“We will now work with the Government on the expected planning reform and support ministers to deliver the changes which will set us on track to securing planning permission before the end of this Parliament.”
The scheme would involve around seven years of construction to produce a third runway and a new terminal.
It would also require more than 700 houses to be demolished and the M25 motorway to be moved into a tunnel.
Environmental groups have expressed major concerns over the impact of airport expansion on climate change.
Bob Ward, from the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, said airport expansion “should not proceed until the Government shows exactly how it will be compatible with the UK’s carbon budgets and net zero target”.
Friends of the Earth’s head of campaigns Rosie Downes warned giving the go-ahead to airport expansion while relying on new technology such as sustainable aviation fuels would be a “reckless gamble”.
The Energy and Climate Intelligence Unit’s Colin Walker warned that the pathway to net zero already relies on sustainable fuels, and a third runway will “increase emissions way beyond the capacity of these fuels to offset them”.
But business groups welcomed the move with the CBI describing the speech as “excellent”.
Shevaun Haviland, Director General of the British Chambers of Commerce, added: “The chancellor has laid down a clear marker on her intent to push for growth and these proposals can light the blue touchpaper to fire up the UK economy.
“Expanding our international airport capacity, investing in modern roads and railways, and rebalancing the planning system all send signals that the UK is building for a better future.”
Sam Richards, chief executive of pro-growth campaign group Britain Remade, said: “For too long, Britain has failed to build the new homes, clean energy infrastructure, and transport links we desperately need. Today’s speech contained concrete steps towards changing that. The Chancellor is absolutely right to argue that by making it easier to build we can both get richer and reach net zero carbon emissions.”
