The tide is turning against Heathrow expansion

Last week the British government decided to defer its decision on whether to expand London’s Heathrow airport. This has been roundly condemned by people the media calls “business”,  referring to self-appointed lobby groups of large companies. But what is all this about? Now it could be what the lobbyists claim, which is weak government pure and simple. Or it could be a straw in the wind for a much more interesting change in attitudes in the political economy.

The story so far. Heathrow has long been operating at near capacity. London’s second airport, Gatwick, is approaching capacity too. If you believe that air travel must increase for a healthy economy, then something must be done to expand capacity. In the long view this conventional wisdom is open to question: but as a good liberal I must accept that the freely made choices of my fellow citizens point to further growth in air travel. The politics, however, are toxic. Airports in the prosperous south east of England are not popular with those that live nearby, whatever benefits they bring. Since Heathrow is quite close to the London conurbation, that adds up to an awful lot of people. Many of these people live in marginal constituencies.

Nevertheless the Labour government prior to 2010 supported an extra runway at Heathrow. But both the Conservatives and the Liberal Democrats, spying opportunities in these south west London seats, were vehemently opposed. The Conservative leader, David Cameron, went as far as to say: “No ifs, no buts, there will be no third runway at Heathrow” (or something like it). When these two parties turned Labour out in 2010 and formed a coalition, the existing expansion plan was thrown out. Instead the government set up an Airports Commission to evaluate the alternatives, to conveniently report after the next General Election, in 2015. It duly reported in the summer, recommending a new runway at Heathrow, in a different place to the previous plan. By then the Conservatives had crushed the Lib Dems and were in government on their own. It would have been a good moment to show decisive leadership and accept the Commission’s results. They would have been able to steamroller opposition from their London MPs.

But Mr Cameron didn’t. He dithered. Why? There seem to be two nakedly political factors. The first is that Zac Goldsmith, the Tory MP for Richmond Park, had threatened to resign and cause a by election if the government supported Heathrow expansion. That ordinarily would be a little local difficulty – but he is the Conservatives’ candidate for London Mayor in 2016. A split would be messy. The second is that Mr Cameron’s “No ifs, no buts” promise is weighing on him. He fears a “Nick Clegg moment”, referring to the collapse in the Lib Dem’s leader’s public standing when he decided to reverse a pledge on student tuition fees after 2010. And Mr Cameron needs all his political capital to carry through his referendum on the European Union. Perhaps this is enough to explain last week’s announcement to defer the final decision until next summer, after further reviews of the implications for air pollution. By then the Mayoral election will have happened, and so might the EU referendum.

But there may be something deeper. It could be that the tide of conventional wisdom is moving against Heathrow expansion, recognising that the terms of reference of the Airports Commission were flawed. If that is the case then the delay is a process of gathering more evidence against Heathrow, so that a decision to expand Gatwick instead will be better proofed against judicial review.

Why might the tide be turning? Well, the case for Heathrow is based on 20th Century economics. The idea is that to make a big airport even bigger is more efficient that building up smaller airports. Time was when the concept of economies of scale was so baked into the conventional wisdom that this logic would not have to be seriously examined. But for airports it does have to be questioned. For a start, any air traveller knows that larger airports are less efficient for point to point travel. Every stage of the process takes longer than for a smaller airport. I remember vividly that taxiing to the terminal after landing at Schiphol airport took as long as the flight itself.

But there is a clear benefit of a running a large airport: that of making connections. This is referred to as being a “hub”. There are two aspects to this. The first is that hub airports can consolidate short distance flights into long distance ones, in a configuration that allows demand for long haul journeys to be met more efficiently. The second is that the presence of a lot of people waiting around in hub airports is an economic opportunity for the host country: it can sell them things. It is on the benefits of the hub operation that the Airports Commission’s recommendation is based: expanding Heathrow will generate bigger benefits to the British economy as a whole than would expanding Gatwick. This can be challenged, however.

The first point of challenge is on the efficiency of the hub model as the best way of managing long haul traffic – or of a hub based in London. One argument is that technology is moving against this. Smaller, efficient long haul aircraft are being developed that allow the alternative, point to point model to be more viable. The second is that the Arabian Gulf is emerging as an alternative airport hub location, and one which has a clear comparative advantage, if not an out and out absolute advantage. Pumping up a London hub is fighting the laws of global economics.

The second point of challenge is on the business of running a hub: the shops and restaurants. The London economy is already overheated, as shown by very high property prices. There really is no need for the extra income. If the hub was in the north of England, that might be a very different matter. The fact that the airport is so unpopular locally gives a clue to this.

And on top of these direct challenges there is a strategic tide. Politicians and economists are worried that economic growth in developed countries like Britain is bypassing most people, and ending up in the pockets of large multinationals and a tiny elitesof people that run them and provide supporting services such as tax avoidance advice and banking. The penny is dropping that this may largely be down to the excessive market power of large businesses, extracting monopolistic profits. And yet the Heathrow business case seems to be a paean to this form of monopolistic capitalism. And those business lobbyists provide an unwitting confirmation of this.

Before the Commission reported, it was arguments such as these that induced me to predict that Gatwick would win over Heathrow. The Airports Commission was a blow; but I am holding to my prediction yet.

 

 

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4 thoughts on “The tide is turning against Heathrow expansion”

  1. Matthew – I think you’re missing the big issue: how much aviation is consistent with the need to reduce our carbon emissions quickly?

    COP21 brought a touch of reality to thinking in high places on climate change. One implication is that the UK’s commitment to 80% cuts by 2050 can no longer be considered adequate. By 2050 we will need to be completely carbon neutral, as will the whole world shortly after. This means that by then any aviation will either need to be completely carbon neutral (running exclusively on biofuels or something not yet invented) or offset by carbon-negative activity.

    The date by which we become carbon neutral is less important than what we emit in the meantime. We need to start making big cuts in emissions now and I don’t think an optimal mix of cuts could exclude aviation.

    Hence the big issue is not where we site a new runway but how quickly we can reduce aviation, so turning any new investment in airport capacity into stranded assets.

    “Reducing aviation” doesn’t sound very liberal but the urgency of action needed to bequeath our grandchildren a habitable planet trumps my own liberal instincts.

    Sorry – I’ve made a lot of sweeping statements here. I’ll try and justify my position in a resuscitation of my own blog.

    John

    1. You are right, of course. On this occasion I chose to step back from the idea that we should be trying to reduce demand for aviation right away in order to look at some other arguments that might have a wider appeal.

      The problem is that the role of aviation in reducing carbon emissions is hotly contested. The usual suspects say that efficiency of aircraft is increasing at such a rate that we should look elsewhere (cars, electricity generation, etc) first. That strikes me as being too optimistic and leisurely.

      But in environmental campaigning I also believe in multi-layering of arguments. in other words using a number of layers of argument to support a more sustainable policy goal, beyond simple sustainability. On this occasion I wanted to attack the hub model of air travel. But that argument does not take us in the direction of reducing air travel, because I am allowing the expansion of Gatwick as a lesser evil.

  2. A provincial comment as we here in Yorkshire and the Humber need a “proper” airport if the promise of a “Northern Powerhouse” is to become anything more than an Osborne sound-bite. The airport which serves this role is Manchester and the airports we have (Doncaster Robin Hood, Humberside) are mini-affairs largely catering for charter business with a predominance of summer flights to Alicante, the Algarve etc and of virtually no use at all to business travellers or other wanting to fly to anywhere off the standard tourist map. The only thing we have approaching a “proper airport” is Leeds/Bradford at Guiseley and its operating hours/times are strictly curtailed due to flight paths over residential areas etc. What this means is that there is a huge trade (taxis, shuttle services etc) ferrying people back and forth over the Pennines between Leeds and surrounding areas to Manchester and back! I have not seen any studies on this, but the pollution produced by the thousands of motor vehicles (as the train connections are still pathetic) making the journey virtually every day of the year (and at virtually every hour of the day) must be horrendous and the equivalent of a good number of flights from Manchester itself! I agree that (as Norman Baker) said in a recent talk on transport policy at Leeds University, maximum effort needs to be invested into offering alternatives to travel by aeroplane (video-conferencing, maximum rail usage, promotion of hybrid/electric cars plus more ambitious schemes like tradable personal carbon usage vouchers etc.), but good, reliable, easily accessible to airports serving a very wide range of destinations will continue to remain a key element of the infrastructure for any region and, as I have said in our Regional policy consultation process, we need to build having a good service airport firmly into any plans for “real” devolution to the English regions (and not the hap-hazard, hotch potch “solution” Osborne is offering) (and a large part of which seems to be about spreading cuts in public funding by devolving responsibility as widely as possible whilst simultaneously restricting/cutting the resources to do actually do anything!)

    (I ma not really qualified to comment on Heathrow etc, but the “obvious” solution to me would seem to be to develop high-speed rail links between Heathrow and Gatwick to form a “Heathwick” solution. As up here (HS2), new rail building measures are likely to encounter stiff opposition, but this should still be less than subjecting people already in the Heathrow flight paths to yet more misery and suffering, I should have thought?)

  3. Here is the link to the to blog entry I promised to back up what I was saying about the Paris Agreement (COP21) and airport expansion:- http://johnmedwaysenergydescent.blogspot.co.uk/2016/01/airport-expansion-and-paris-agreement.html#more

    Charles – as a Yorkshireman by birth, I sympathise with your views. I have fond memories of Leeds-Bradford Airport, though I still tend to think of it as Yeadon Aerodrome. I particularly remember the long camouflaged building which I later discovered was one of the main factories for production of the Lancaster Bomber.

    I think it’s in the South that aviation should be scaled back quickest. We immigrants to the South-East can get to Europe pretty quickly by Eurostar and in any case our better weather reduces our need to get away to the sun. Business can cope with a big cutback in aviation as long as it’s holiday flying that takes the hit.

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