Rachel Reeves caused a furious backlash as she insisted a third runway at Heathrow was “set up for success”, despite scepticism in Whitehall that the plan can be reconciled with the UK’s climate obligations.
The chancellor made throwing the government’s weight behind Heathrow expansion the centrepiece of a major speech on growth on Wednesday.
“As our only hub airport, Heathrow is in a unique position – and we cannot duck the decision any longer,” she said, adding: “The case is stronger than ever.”
Reeves struck a determinedly optimistic tone on the UK’s economic prospects after accusations that she was too gloomy during Labour’s early months in power and a government bond selloff jeopardised her tax and spending targets.
“Everything I see as I travel around the country gives me more belief in Britain and more optimism about our future, because we as a country have huge potential,” she said.
But the Heathrow plan – meant to signal the government’s determination to push through objections and back major infrastructure projects after two decades of uncertainty around the project – was immediately questioned by some government insiders.
Reeves said the government would draw up an airport national policy statement in the coming months to ensure the third runway is “in line with our legal, environmental and climate obligations”.
Some Labour sources insist that means the airport’s expansion will never happen – because it would trash the government’s emissions targets.
Sources stressed that consent will only be granted if the Department for Transport can meet its carbon budget – a small victory for Ed Miliband, the energy secretary, who has repeatedly pointed out how tight these budgets are without allowing for any airport expansion.
Miliband, who is the cabinet’s main Heathrow sceptic, will not resign over the government’s backing of the project and has told allies that it is imperative that a vocal climate champion remains in the cabinet.
He is understood to have stressed that the government must maintain its “lines in the sand” when it comes to Heathrow expansion, not dilute its standards. “All Ed has asked for is a proper process, and that’s what we will have,” an ally said.
A source in a separate government department said: “Rachel’s speech was theatre and vibes. She wants to send the message that Britain is open for business. But the reality is that this will be mired in policy discussions for years and years.”
The London mayor, Sadiq Khan, reiterated his opposition to expansion and said he would use “whatever means we can” to stop it. “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.
Michael O’Leary, the chief executive of the budget airline Ryanair, called Reeves’s announcement a “dead cat” meant to distract from the lack of growth in the economy, which figures released next month are expected to show flatlined in the second half of 2024.
Reeves said the government would be “inviting proposals to move forward by the summer”, with the government hoping planning approval could be granted by the end of this parliament in 2029. Heathrow has said the runway could be completed by the mid-2030s at the earliest.
O’Leary said: “Talking about a third runway or having a big press conference about something that might or might not get delivered in 2040 gives the impression that she’s doing something about growth, when she knows that runway will not be delivered for 15 or 25 years.”
The chancellor pointed to progress in making air travel greener, including by using sustainable fuels, but green campaigners dismissed that argument. Chaitanya Kumar, the head of environmental policy at the New Economics Foundation thinktank, said: “In justifying airport expansion while claiming commitment to net zero, the chancellor has leaned on false solutions – none bigger than the myth of sustainable aviation fuels. The government’s own projections show SAFs will barely cut emissions before 2040, with any gains wiped out by rising flight numbers.”
Rosie Downes, the head of campaigns at Friends of the Earth, called Reeves’s growth-first approach “the kind of dangerously shortsighted thinking that has helped cause the climate crisis and left the UK one of the most nature-depleted countries in the world.”
In another potential blow to the Heathrow proposals, it will be considered under government rules which are about to be updated to include tougher emissions targets, the Guardian understands.
The previous airports national policy statement (ANPS) was published in 2018, when targets were less stringent.
Siân Berry, the Green MP for Brighton Pavilion and a long-term campaigner against aviation expansion, said that considering a new runway under the updated targets meant the plan was “probably going to unravel when it faces climate reality and the law that we’ve already got in place”.
Among Labour MPs, the influential Labour Growth caucus gave enthusiastic backing to Reeves’s speech. Chris Curtis, the Milton Keynes North MP who chairs the group, said businesses should know that Labour MPs would back the chancellor on planning and infrastructure.
“This is not only a government who are on a mission for growth, but a movement on the backbenches of the Labour party which is leading the way,” he said.
The shadow business secretary, Andrew Griffith, said: “Re-announcing long term investment plans is good but it’s no substitute for action today as businesses and workers are crying out for help. At this rate, new airport capacity will just help the last few remaining businesses leave the country faster.”
Heathrow expansion was the most striking of a number of pro-growth policies highlighted by the chancellor as she addressed business leaders and cabinet colleagues at a Siemens factory in Oxfordshire.
The government’s plan for kickstarting the stalling economy include a planning and infrastructure bill that would make it harder for major projects to be halted on environmental grounds and new remits for regulators to pursue growth.
Separately, the Bank of England governor, Andrew Bailey, told MPs on Wednesday that he backed the government’s push to make watchdogs more growth-friendly, but said that it must not jeopardise financial stability.
“Fundamentally, financial stability is a foundation for growth. So there isn’t a trade-off in the fundamental sense. Of course, we’ve seen the impact that a loss of financial stability can have in the financial crisis,” he said.
Additional reporting by Kalyeena Makortoff
Article by:Source: Heather Stewart, Jessica Elgot and Helena Horton
