Group of London councils say Airports Commission buried economic evidence
The AEF has analysed the Airports Commission’s economic claims, of £147 billion of benefit to the UK (over 60 years) of a Heathrow runway. Now council leaders of London boroughs, opposed to a Heathrow runway (but unfortunately keen on a Gatwick runway instead) have also criticised the Commission’s figures. They have unearthed a letter by Professor Peter Mackie and Mr Brian Pearce, the Commission’s own expert advisors, which questions the reliability of growth forecasts used to justify the Heathrow recommendation. Instead of the £147 billion estimate by PwC, the the Government’s established approach to economic modelling predicts growth in the region of £33.6 – 54.8 billion for Heathrow expansion, versus £27.2 – 47.1 billion for Gatwick. In a letter to the Commission Mackie and Pearce warn that the figures include “a high degree of overlap between the direct and wider impacts… double counting … and rely on economic growth and other assumptions which are at the extreme end of the range.” They warn that “qualifiers such as ‘up to’ do not give a flavour of the likely median or mean outcome across the economic scenarios.” The methodology used by PWC is experimental and has never been tested against a live project.
Airports Commission Accused Of Burying Evidence
Council leader believes they “were hell bent on presenting Heathrow as the best option”
August 20, 2015 (Putneysw15.com)
The Airports Commission has been accused of burying evidence which undermined their decision to back Heathrow expansion over a rival scheme to develop Gatwick.
A cross-party group of South London councils has unearthed a letter by Professor Peter Mackie and Mr Brian Pearce, the commission’s own expert advisors, which questions the reliability of growth forecasts used to justify the recommendation.
The forecasts, produced by consultants PWC, predicts a third Heathrow runway would deliver up to £147 billion in growth. This figure is used throughout the commission’s final report.
In contrast, the Government’s established approach to economic modelling predicts growth in the region of £33.6 – 54.8billion for Heathrow expansion, versus £27.2 – 47.1billion for Gatwick.
In a letter to the commission Mackie and Pearce warn that the PWC figures include “a high degree of overlap between the direct and wider impacts… double counting … and rely on economic growth and other assumptions which are at the extreme end of the range.”
The experts’ go on to warn that using the £147 billion figure to illustrate Heathrow’s potential benefits could mislead the public and that “qualifiers such as ‘up to’ do not give a flavour of the likely median or mean outcome across the economic scenarios.”
Mackie and Pearce note the risk of “exaggeration by media” if care is not taken to properly caveat these figures.
The commission’s advisors conclude that “overall, therefore, we counsel caution in attaching significant weight either to the absolute or relative results of the GDP/GVA S-CGE approach (PwC report) within the Economic Case. We would accept that there is some useful indicative material for the Strategic Case but care is required in assessing its robustness and reliability.”
The Mackie Peace letter has been highlighted by a cross party group of South London councils which are investigating the commission’s work amid fears their preferred scheme to expand Gatwick was deliberately undersold. The group includes Croydon, Kingston, Southwark and Wandsworth.
The council point out that the methodology used by PWC is experimental and has never been tested against a live project.
Wandsworth Council leader Ravi Govindia said:
“It’s clear the commission has based its recommendation to expand Heathrow on a grossly exaggerated economic case. Their own expert advisors tore apart the PWC growth forecasts but their evidence was buried and ignored. Sir Howard and his team were hell bent on presenting Heathrow as the best option and refused to let reality get in the way.”
Southwark Council leader Peter John said:
“Gatwick expansion is key to South London’s future and we want to see a fair comparison with Heathrow. Sadly the commission’s economic forecasts are not credible and the final report will go down as crude attempt to mislead Government policy.”
Croydon Council leader Tony Newman said:
“South London councils engaged with the commission in good faith but it’s clear the scales have been weighted against Gatwick expansion. A fair appraisal will point to Gatwick as the best solution and we will continue to make the case for this hugely beneficial project.”
Kingston Council leader Kevin Davis said:
“The commission’s selective use of economic data is deeply concerning and very hard to justify in light of the advice they received from their own appointed experts. On balance, Gatwick’s expansion would be a catalyst for major, long term investment across South London’s transport network and we can’t let this highly questionable report stop that from happening.”
Analysis by AEF shows economic impact of Heathrow runway likely to be minimal, or negative. Not £147 billion (over 60 years)
The Airports Commission has claimed,in its final report (1st July) and the media has uncritically repeated, that a new north-west runway at Heathrow would deliver up to £147 billion benefit for the UK (over 60 years). Now the AEF (Aviation Environment Federation) has done some critical analysis of the Commission’s various documents and figures, to elucidate what the actual economic impact on the UK economy might be. This is complex stuff, and making sense of the various facts (often in different documents at different dates) is not for the faint hearted. However, AEF shows that claims of £147 billion do not take into account the environmental or surface access costs associated with a new runway. The Commission’s own economic advisers have criticised the analysis (not done with the usual “WebTAG” model used by government) for double counting and questionable assumptions in relation to the indirect benefits associated with increased seat capacity. Using WebTAG, it appears – using the Commission’s own data – that there could be a net cost to the UK economy of – £9 billion over 60 years. Not a benefit at all, once all environmental and surface access costs are factored in. With some ‘wider economic benefits’ included, the benefit over 60 years would still be only £1.4 billion (not £147 billion), as quoted in the Commission’s own final report.
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Gatwick blasts ‘flawed’ Heathrow runway decision
Gatwick airport has criticised the Airport Commission’s recommendation of a third runway at Heathrow in its first detailed response since the report was published.
The airport’s CEO Stewart Wingate said the final report contained “so many omissions and basic errors” that its reliability must be questioned.
Wingate said one of the key flaws in the report surrounds Howard Davies’ proposed ban on night flights at Heathrow, which would mean fewer services if applied, but said this was not factored into the Commission’s own traffic forecasts for Heathrow.
“The restrictions would impact on the number of long haul flights to and from growth markets in the Far East, the issue at the heart of the decision to recommend Heathrow”, Gatwick said in a statement.
In the 50-page response Gatwick also said the commission’s proposals, which rejected calls to expand Gatwick, used incorrect traffic estimates.
We expected a well-considered examination of all options, but instead the final report contains so many omissions and basic errors that its reliability as the basis of aviation policy must be called into question. The findings of this report simply do not add up,” said Gatwick boss Stewart Wingate.
“Britain is in danger of losing out once again if we repeat mistakes of the past – Heathrow has failed time and again and the Airports Commission report and the conditions placed on expansion have not solved the huge obstacles confronting it.”
A Heathrow spokesperson said: “The Airports Commission undertook a £20m, two-and-a-half year, detailed study of where the next runway should be in the UK. It unanimously and unambiguously chose Heathrow because it is the only option that will connect the whole UK to global growth.”
A spokesman for the commission said: “The evidence in the final report was subject to extensive analysis and consultation and we are confident that it is fit for purpose.” [The Commission was wound up in the middle of July; staff have moved back to other departments, largely the DfT; Howard Davies is off to the RBS; Phil Graham is thought to be the only person still speaking for the Commission].