The Economic Benefits of Expanding Heathrow ‘Negligible’ – says new independent research
14.2.2008 (HACAN press release)
A major new report (1), published today by independent economic consultants CE
Delft (2) undermines the economic case for expansion at Heathrow. It challenges
Government claims that its current proposals to expand Heathrow (3) will benefit
the economy to the tune of £5 billion (4).
The CE Delft report, “The economics of Heathrow expansion”, argues the Government’s
figures are based on flawed research which overestimates the importance of aviation
to the economy (5).
The Oxford Economic Forecast (OEF) reports, on which the Government relies, do
not take account of the billions of pounds the country is losing each year from
the tax-free fuel and the exemption from paying VAT the aviation industry enjoys.
Nor do they factor into their calculations the annual bill, also running into
billions, of the cost downsides of aviation expansion: noise, air pollution,
community destruction and climate change.
John Stewart, the Chair of HACAN, said, "It’s crystal clear that the economic
benefits of expanding Heathrow would be negligible if the true costs were factored
in. This report should be required reading for government ministers before they
even consider giving the green light for expansion at Heathrow."
Stewart added, "What the CE Delft report clearly shows is that it is essential
that the Government should not rely on propaganda promoted by vested interests.
We are not asking that they should wholly rely on the CE Delft report. What we
do say is that we need a proper independent study into the economic impacts of
airport expansion and that greater."
Speaking at the launch of the report this morning, former transport minister
Steve Norris said: "The Government is pushing ahead with plans for a third runway
without really understanding what that means for the economy. It seems that the
OEF report is fundamentally flawed and that by relying on it the Government are
misleading us over the need for a third runway at Heathrow. We are often told
that a third runway is essential for the Capital’s economy. But this report shows
those benefits have been overstated by the Government and the aviation lobby.
How can we compare the cost of valid alternatives, such as high-speed rail, if
we are over-estimating the value of more runways?"
Geraldine Nicholson, Chair of NoTRAG, said, "Thousands of people around Heathrow
will lose their homes if expansion goes ahead. This independent report shows
that it will all be in vain. There will be huge community pain for no real economic
gain."
The CE Delft Report also gives little comfort to pro-Heathrow expansion groups
such as Future Heathrow who argue that, unless Heathrow expands, business will
locate to other cities in Europe, such as Frankfurt and Paris, whose airports
are expanding more rapidly.
The evidence shows that London continues to be an attractive destination for
business even though some other European airports are expanding more rapidly.
ENDS
Notes for Editors:
(1). The full report can be viewed on the HACAN website – www.hacan.org.uk It was commissioned by HACAN, in association with NoTRAG
Read the CE DElft press release and key points summary
(2). CE Delft is an independent research and consultancy organisation specialised
in developing innovative solutions to environmental problems. The solutions CE
Delft delivers are technologically robust, economically prudent, politically feasible
and socially equitable. Visit www.ce.nl/eng
(3). The Department for Transport is currently consulting on plans for a 3rd
runway at Heathrow and for more planes to use the existing runways by abolishing
runway alternation.
(4). The Government’s current consultation paper estimated that a 3rd runway
at Heathrow would benefit the economy to the tune of £5 billion, spread over 70
years.
(5). The Government’s claims for the economic value of expansion are based on
“The Contribution of Aviation to the UK Economy,” (1999), which it commissioned
from consultants Oxford Economic Forecasting (OEF). The report was largely paid
for by the aviation industry, with its forward being written by representatives
of the industry. An updated OEF Report was published 2006.
For further information contact:
John Stewart 0207 737 6641, 07957385650
Geraldine Nicholson 01895 854519; 077105 23369