With permission, Mr Speaker, I would like to make a statement about the proposed expansion of Heathrow Airport.
This government has a clear vision – to build a Britain that is fit for the future. A Britain with a prosperous jobs market and an economy that works for everyone.
That is why I come to this House to mark an historic moment. Today (5 June 2018) I am laying before Parliament our final proposal for an Airports National Policy Statement (NPS), which signals our commitment to securing global connectivity, creating tens of thousands of local jobs and apprenticeships, and boosting our economy for future generations by expanding Heathrow. It is an example of how this government is taking forward its Industrial Strategy.
Taking such a decision is never easy. This issue has been debated for half a century. My department has met with local residents and fully understands their strength of feeling, but this is a decision taken in the national interest and based on detailed evidence. In 2015, the independent Airports Commission concluded that a new north-west runway at Heathrow was the best scheme to deliver additional capacity - and in October 2016 we agreed. We ran 2 national consultations during 2017 and received more than 80,000 responses. All the points raised have been carefully considered, and today we are publishing the government’s response.
To ensure fairness and transparency, we appointed an independent consultation adviser, the former Court of Appeal Judge, Sir Jeremy Sullivan.
Our draft NPS was scrutinised by the Transport Committee - and today I would like to thank the Chair and her committee for the thoroughness of their work. I was pleased that they, like me, accepted the case for expansion and concluded that we are right to pursue development through an additional runway at Heathrow. We welcome and have acted upon 24 out of 25 of their recommendations. Our response to the committee is also being published today.
Mr Speaker, this country has one of the largest aviation sectors in the world, contributing £22 billion to our GDP, supporting half a million jobs, servicing 285 million passengers, and transporting 2.6 million tonnes of freight last year.
The time for action is now. Heathrow is already full and the evidence shows the remaining London airports won’t be far behind. Despite being the busiest two-runway airport in the world, Heathrow’s capacity constraints mean it is falling behind its global competitors – impacting the UK’s economy and global trading opportunities.
Expansion at Heathrow will bring real benefits across the country including a boost of up to £74 billion to passengers and the wider economy, providing better connections to growing world markets, and increasing flights to more long haul destinations. Heathrow is a nationally significant freight hub, carrying more freight by value than all other UK airports combined. A third runway would enable it nearly to double its current freight capacity.
In addition, Mr Speaker, this is a project with benefits reaching far beyond London. We expect up to 15% of slots from a new runway to facilitate domestic connections across the UK, spreading the benefits of expansion to our great nations and regions. As well as new routes, I would expect there to be increased competition on existing routes, giving greater choice to passengers.
I recognise the strong convictions many members of this House and their constituents have on this issue, and the impacts on those living in the local area. It is for this reason that we have included strong mitigations in the NPS to limit these impacts.
Communities will be supported by up to £2.6 billion towards compensation, noise insulation and improvements to public amenities – 10 times bigger than under the 2009 third runway proposal. This package is comparable with some of the most generous in the world and includes £700 million for noise insulation for homes and £40 million to insulate schools and community buildings. The airport has offered 125% of the full market value for homes in the compulsory and voluntary purchase zones, plus stamp duty, moving costs and legal fees, as well as a legally-binding noise envelope and more predictable periods of respite.
For the first time ever, we expect a 6 and a half hour ban on scheduled night flights. But my ambitions do not stop there. If the NPS is designated and the scheme progresses, I encourage Heathrow and airlines to work with local communities to propose longer periods of respite during a further consultation on night flight restrictions.
We will only grant development consent if we are satisfied that a new runway would not impact the UK’s compliance with air quality obligations. Advances in technology also mean new planes are cleaner, greener and quieter than the ones they are replacing.
Earlier this year a Community Engagement Board was established and appointed Rachel Cerfontyne as its independent chair. It will focus on building relations between Heathrow and its communities, considering the design of the Community Compensation Fund which could be worth up to £50 million a year, and holding the airport to account when it comes to delivering on its commitments today and into the future.
Mr Speaker, there has been much debate about the costs of this scheme. Our position on this could not be clearer – expansion will be privately financed. Expansion must also remain affordable to consumers. We took a bold step when I asked the industry regulator, the Civil Aviation Authority (CAA), to ensure the scheme remains affordable while meeting the needs of current and future passengers. This process has borne fruit with the identification of potential savings of up to £2.5 billion.
I am confident that further cost savings can be identified, and the design of expansion can continue to evolve to better reflect the needs of consumers. That is why I have recommissioned the CAA to continue to work with industry to deliver the ambition I set out in 2016 to keep charges close to current levels. This will include gateway reviews, independent scrutiny and benchmarking of proposals, which I know are of paramount importance to British Airways, Virgin and the wider airline community.
Now Mr Speaker, I want to talk about scheme delivery and ownership. The north-west runway scheme put forward by Heathrow was selected by the government following a rigorous process. Since then, Heathrow have continued to make strong progress, having already consulted on their scheme design and airspace principles earlier this year.
Some stakeholders have suggested that we should now look again at who delivers expansion. Whilst I will always retain an open mind, my current assessment is that caution is needed at this stage. Heathrow is an operational airport under a single management, and I am clear that they are currently the only credible promoter who could deliver this transformational scheme in its entirety.
I welcome the CAA’s April consultation which expects Heathrow to engage in good faith with third parties, to ensure expansion is delivered in a way which benefits the consumer. However this needs to be balanced against the need for timely delivery, and that is why my department will be working closely with Heathrow to enable delivery of the new runway by their target date of 2026.
Heathrow is already Britain’s best-connected airport by road and rail, and this will be further strengthened by future improvements to the Piccadilly Line; new links to Heathrow through Crossrail; connections to HS2 via an interchange at Old Oak Common and plans for western and southern rail access to the airport. That is why I met with industry on 24 May to challenge them to come forward with ideas for new southern rail access to the airport.
Even with today’s announcement, a new operational runway at Heathrow is still a number of years away. The Airports Commission recommended that there would also be a need for other airports to make more intensive use of their existing infrastructure and we consulted on this in the Aviation strategy call for evidence last year.
I can confirm today that the government is supportive of airports beyond Heathrow making best use of their existing runways. However, we recognise that the development of airports can have negative as well as positive local impacts, including on noise levels. We therefore consider that any proposals should be judged on their individual merits by the appropriate planning authority, taking careful account of all relevant considerations, particularly economic and environmental impacts.
Furthermore, in April we set out our next steps, which will see us work closely with industry, business, consumer and environmental groups to develop an aviation strategy that sets out the long term policy direction for aviation to 2050 and beyond, while addressing the changing needs and expectations of air passengers. It will set out a framework for future sustainable growth across the UK; how we plan to modernise our congested airspace; and use innovative technology to deliver cleaner, quieter, quicker journeys for the benefit of passengers and communities. Airspace modernisation must be taken forward irrespective of the decision on the proposed new runway, and to do so we expect multiple airports across the south of England will bring forward consultations on their proposals.
Returning to Heathrow, the planning system involves 2 separate processes, one to set the policy – which is our NPS, and then, if this House votes in favour of it and it is then designated, a second process for obtaining development consent.
The next step would therefore be for Heathrow to develop their plans, including details of the scheme design and airspace change, and hold a further consultation. This allows the public a further say on the next phase of Heathrow’s plans, and additional opportunities to have their voices heard. Any application for development consent will of course be considered carefully and with an open mind, based on the evidence provided. The process includes a public examination by the independent planning inspectorate before any final decision is made.
Alongside the NPS today, I have also published a comprehensive package of materials that I believe will enable the members of this House to make an informed decision ahead of the vote.
I hope the House will be ready to work together - acting on an issue that is in our shared national interest - in order to create a positive legacy for the future. I hope members will get behind it.
Mr Speaker, I commend this statement to the House.