Campaign group claims Government’s economic case for Heathrow is flawed

26.2.2008   (HACAN press release)
 
To coincide with the end of the consultation on Heathrow expansion, the campaign
group HACAN has published a new paper which attacks the Government’s economic
case for expanding the airport.   The paper, entitled “
Flaws Galore” compiled by AirportWatch’s Aviation Economic Group, has identified over twenty
serious flaws in the Government’s economic case.
 
HACAN has issued the paper the day after almost 3,000 people attended a packed
Central Halls, Westminster , to voice their opposition to the proposals to expand
Heathrow.
 
The rally was addressed by senior politicians including Liberal Democrat leader
Nick Clegg, Peter Ainsworth, the Conservative Shadow Secretary of State for the
Environment.   Peter Ainsworth re-enforced the criticism that the Government’s
expansion plans are based on doubtful economics when he said that a decision to
expand Heathrow should not be made on the basis of   "a dodgy dossier".

Key reasons which undermine the case that expansion is needed for economic reasons
include:  
  • The false assumption that the price of oil will fall from the present level of
    nearly $100 a barrel to around $53 a barrel and remain at around that level until
    2080;  
  • The equally unlikely assumption that over the next 72 years there will be no
    increase in the tax on air travel.    
  • The false assumption that, if Heathrow doesn’t expand, London will lose businesses
    to other cities.   The source the DfT cites for this assumption is ‘The economic
    benefits of Heathrow’ by BAA – hardly an impartial source.     BAA quote their source
    as ‘the European Cities Monitor 2007’ by property consultants Cushman and Wakefield
    , Healey and Baker.   The main finding of that report was that " London has once
    again increased its margin over Paris as Europe ’s top city to locate a business"
    – hardly proof of the need for a new runway.   Indeed the report shows that the
    factors considered most important by the 500 top businessmen interviewed were
    first, availability of qualified staff; second, access to markets; and third quality
    of telecommunications; with external transport links in fourth place.
  • The huge increase in transfer passengers, who bring little benefit to the wider
    economy.   It is forecast that by 2030 there will be 36 million passengers at Heathrow
    transferring from one international flight to another international flight, nearly
    twice as many as at present.   This number happens to be the same as the expected
    capacity of the new runway.
The findings of the new paper support the findings of the major report published
recently from the independent Dutch consultants CE Delftwhich found that the benefits
of expansion at Heathrow were likely to be considerably lower than those claimed
by the Department for Transport.
 
John Stewart, the Chair of HACAN, said, "Once again the Government’s claims about
the economic benefits of Heathrow expansion have been shown to be wildly exaggerated.  
The economic assumptions in the consultation document are riddled with flaws.  
The Government should scrap this flawed consultation and commission an independent
study into the economics of Heathrow expansion before proceeding any further with
its expansion plans."

ENDS
 
Full text of Flaws Galore 
 
Notes for Editors:

 
The consultation closes on 27th February.   The Government is expected to announce
its decision in the Summer.

 The Aviation Economics Group is part of AirportWatch, which through its member
orgnisations represents some 5 million people.   Member organisations include CPRE,
Friends of the Earth, Greenpeace, The National Trust, RSPB and The Woodland Trust,
together with many local airport groups.  
 
“The economics of Heathrow expansion”   (written by CE Delft) was published by
HACAN earlier this month. (see
news story on CE Delft report launch)