Andrew Tyrie says economic case for a new runway unclear and based on “opaque” information
Andrew Tyrie is the chairman of the influential Commons Treasury select committee. He has now said parliament and the public had been left partly in the dark on the case for a new runway, because the Airports Commission’s analysis is not good enough. He said the decision on airport expansion is being taken on the basis of information that was “opaque in a number of important respects.” Mr Tyrie said the robustness of the Airports commission’s conclusions could not be determined from the information in its report. “Parliament has demanded more transparency over the environmental case. At least as important is the economic case.” Mr Tyrie said it was impossible to tell if the potential economic benefits for the UK of the proposals by Heathrow or Gatwick differed significantly from one another, or even if the benefits of building either are significantly different from not building any new runways. “A decision as controversial as this — one that has bedevilled past governments for decades — requires as much transparency as reasonably possible.” Andrew Tyrie has written to George Osborne calling for more details of the calculations that led to the Commission recommending a Heathrow runway. He also called for the process to be moved from the DfT to the Treasury.
Osborne Must Take Lead Over Heathrow Economic Case, Tyrie Says
By Thomas Penny (Bloomberg)
February 1, 2016
Treasury committee chair says airport commission case opaque
Published analysis not sufficient for decision on runways
Andrew Tyrie, chairman of the House of Commons Treasury Committee, wrote to Chancellor of the Exchequer George Osborne to urge him to take the lead in assessing the economic case for expanding airport capacity in southeast England. [The remit of the Treasury Select Committee is to examine the expenditure, administration and policy of HM Treasury, with all of its agencies and associated bodies, including HM Revenue and Customs, the Bank of England, the Prudential Regulation Authority, the Financial Conduct Authority, the Royal Mint, etc].
Prime Minister David Cameron’s government in December delayed a decision on airport expansion until after London’s mayoral election in May, arguing that a state-backed commission led by Howard Davies hadn’t properly assessed the environmental impact of an additional runway. It also appears to have failed adequately to consider the economic case, Tyrie said, faulting the commission for analyzing costs and benefits of only one of the five possible scenarios it created.
“The decision on airport capacity is crucial to the future of the British economy,” Tyrie wrote in the letter to Osborne, which he made public on Monday. “It therefore cannot be left to the Department for Transport, and you will need to take the lead.”
Cameron, who campaigned against building an additional runway at Heathrow Airport in west London when he was in opposition, appointed the commission three years ago to sidestep an issue that would have cost his Conservative Party support in areas under the flight path.
The commission recommended a new runway at Heathrow, Europe’s busiest hub, and the premier delayed the decision again to protect Zac Goldsmith, a Tory candidate for Mayor of London and an outspoken critic of expansion at the airport.
Transport Secretary Patrick McLoughlin said last month that a proposal to expand Gatwick Airport, south of London, remains in government consideration along with two options for expansion at Heathrow.
Tyrie said he had written a public letter to the chancellor because the Treasury had failed to answer questions posed under the usual procedures for members of parliament asking questions of ministers.
Treasury committee chair Andrew Tyrie says more information required over reasons for Davies report’s conclusions
A decision on airport expansion is being taken on the basis of “opaque” information, a senior MP has warned.
Andrew Tyrie, chair of the influential Commons Treasury select committee, said parliament and the public had been left partly in the dark on the case for a new runway at Heathrow.
He has written to George Osborne calling for more details of the calculations that led an independent commission to recommend the highly controversial addition to the country’s biggest airport.
In his letter, Tyrie complained that ministers had failed to respond to a series of detailed technical questions tabled in the Commons seeking clarification in areas such as the impact on fares and passenger demand.
He said the commission’s case was “opaque in a number of important respects” and that “a good deal more information is required” if the government’s forthcoming decision is to be properly scrutinised.
The Department for Transport said the commission had provided “exhaustive detail”. “The case for aviation expansion is clear and it’s vitally important we get the decision right so that it will benefit generations to come,” a spokesperson said.
“So we continue to consider the exhaustive detail contained in the Airports Commission’s final report. It has not so far been possible to respond to Mr Tyrie’s long list of questions on related and different issues. However, we are considering his questions in the light of progress and will respond to his letter as soon as possible.”
A spokesman for Gatwick said: “This is a highly significant intervention from the chairman of the Treasury select committee. It is clearly now the consensus view that the Davies report is seriously flawed and not a sound basis for decision-making.”
Letter to George Osborne on airport expansion
01 February 2016 (Commons Treasury Select Cttee press release)
Rt Hon. Andrew Tyrie MP writes to the Chancellor, asking him to go further to back up the government’s economic case for an expansion of the UK’s airport capacity.
Letter from Rt Hon. Andrew Tyrie MP to Rt Hon George Osborne MP on airport expansion 25 January 2016
Commenting on the correspondence, Mr Tyrie said:
“The robustness of the Airports Commission’s conclusions cannot be determined from the information available in the Davies report. Parliament has demanded more transparency over the environmental case. At least as important is the economic case.
In considering the economic case, the Commission created five scenarios for how the aviation sector and the global economy might develop. But it has provided figures on the costs and benefits of the runway proposals under just one of these. The absence of information on the costs and benefits under the other scenarios makes it impossible to assess the robustness of the economic case. Nor is it possible, on the basis of the figures published by the Commission, to tell if the potential economic benefits of the proposals differ significantly from one another. Nor can it be established whether the benefits are significantly different from the option of not building any new runways.
Furthermore, the economic case depends on the time horizon over which costs and benefits are measured. The Commission used a period of sixty years from the completion date of 2026. The Commission should be expected to be able to demonstrate the sensitivity of the costs and benefits to the choice of appraisal period. What about 30 years, or 40 years? This analysis is also currently lacking.
These may sound like arcane and technical points. They are not. Without adequate information on the robustness of the economic case, Parliament and the public will not be able to judge the merits of any decision the Government eventually makes.
And this decision matters. Getting it right will be important in determining whether or not Britain can compete globally. Decisions of such crucial economic importance cannot be left to the Department for Transport. So the Chancellor of the Exchequer should take the lead.
A decision as controversial as this – one that has bedevilled past Governments, in one way or another, for decades – requires as much transparency as reasonably possible for the basis of the decision. There is no excuse for not providing it. So this work needs to be done, and published, as soon as possible, and at least three months before any decision is taken.”
We may not need a new runway at all, says senior Tory
By Graeme Paton, Transport Correspondent (The Times)
February 1 2016
MPs will raise fresh doubts over plans for a new runway in the southeast today amid claims that the economic case for expansion had not yet been made.
Andrew Tyrie, the Conservative chairman of the Treasury select committee, said an analysis used to justify an additional runway was lacking.
He described the economic case put forward by the Airports commission, which made a unanimous recommendation in favour of a third runway at Heathrow, as “opaque in a number of important respects”.
In a letter to George Osborne he urged the government to carry out further analysis before reaching a decision in the summer. He said it could conclude that no new runways were needed at all.
Mr Tyrie, the Tory MP for Chichester, also called for the process to be moved from the Department for Transport to the Treasury.
Such a move would almost certainly lead to a further delay on a new runway which has already been put on hold for six months pending further investigation into air quality and noise.
It also threatens to further weaken Heathrow’s case for a third runway following the commission’s conclusion that expansion of the airport would provide the greatest economic benefit to the nation.
According to the commission’s final report, a third runway would create up to £147 billion in benefits over 60 years, compared with £89 billion at Gatwick, which is also vying for permission to expand. [This is very much contested, and the Commission’s own economic advisors, Mackie and Pearce, said these figures should be treated with caution. More info].
Ministers have accepted that the case for a new runway has already been made and are to choose between rival schemes at Heathrow and Gatwick. A decision is now unlikely before June.
Mr Tyrie said, however, that the robustness of the Airports commission’s conclusions could not be determined from the information in its report. “Parliament has demanded more transparency over the environmental case,” he said. “At least as important is the economic case.”
Despite claims that expanding Heathrow would generate more money, Mr Tyrie claimed it was impossible to tell if the potential economic benefits of the proposals differed significantly from one another.
He added: “Nor can it be established whether the benefits are significantly different from the option of not building any new runways. A decision as controversial as this — one that has bedevilled past governments for decades — requires as much transparency as reasonably possible.”
A Department for Transport spokesman said that the commission had provided exhaustive detail. [That is absolutely not true. The Commission’s work contains many omissions]. “The case for aviation expansion is clear and it’s vitally important we get the decision right so that it will benefit generations to come,” he said. [That is also absolutely not true. It is the view of the aviation industry. A key DfT civil servant used to be in Heathrow’s PR department. Simon Baugh. More info].
A spokesman for Gatwick, which has repeatedly criticised the Airports Commission’s conclusions, said that Mr Tyrie’s letter represented a significant intervention. The official said it was now the consensus view that the report was seriously flawed and not a sound basis for decision making.
“Gatwick expansion delivers the new connectivity and economic growth we need without the environmental impacts that have stopped Heathrow time and again,” he said. “If we want something to happen, it is time to back growth at Gatwick.” [This is just predictable sound bite from Gatwick, as the economic case for a Gatwick runway is also totally unproven, and would land the taxpayer with bills of billions of ££s for infastructure for decades].
In July 2012, Andrew Tyrie – as a member of the Tory Free Enterprise group, was advocating the building of two runways at Heathrow. Link
Peter Jordan, a retired scientist and member of the Gatwick Area Conservation Campaign, commented on the Times article: