Sadiq Khan has welcomed the potential for direct train services from Waterloo to Heathrow Airport but warned that there may not be enough capacity on the rail network for such a service to be introduced. The Mayor said: “While the potential for a new connection between Heathrow and Waterloo is welcome, the proposals face a serious capacity challenge. Rail lines between Windsor and Waterloo are severely constrained and the multiple level crossings on the route limit the ability to accommodate additional trains. Any new airport service cannot be at the expense of existing and planned services or the network’s ability to meet forecast growth in background demand. If the Government is to take forward a third runway at Heathrow airport, it needs to demonstrate that there is both the rail connectivity and capacity to enable expansion and achieve the airport’s stated aspiration of a zero increase in passenger and staff highway trips. The Southern Rail Access proposals, reliant on the rail lines between Windsor and Waterloo, cannot provide the capacity to support an expanded Heathrow.” … “While the Airports Commission identified Southern Rail Access as the only rail scheme required for Heathrow expansion, it emerged last month that the Government now deems no new rail infrastructure essential for an expanded Heathrow. Such an approach is deeply concerning and risks worsening congestion on the roads and a further deterioration of air quality around Heathrow.”
Sadiq warns Waterloo to Heathrow rail link may be impractical
25.11.2016 (London SE1)
Sadiq Khan has welcomed the potential for direct train services from Waterloo to Heathrow Airport but warned that there may not be enough capacity on the rail network for such a service to be introduced.
Labour London Assembly member Fiona Twycross tabled a question to Mayor of London Sadiq Khan asking whether he backed calls by Seema Malhotra MP for a rail link between Heathrow Airport and Waterloo Station.
Mr Khan’s reply was published this week.
The Mayor said: “While the potential for a new connection between Heathrow and Waterloo is welcome, the proposals face a serious capacity challenge.
“Rail lines between Windsor and Waterloo are severely constrained and the multiple level crossings on the route limit the ability to accommodate additional trains.
“Any new airport service cannot be at the expense of existing and planned services or the network’s ability to meet forecast growth in background demand.
“If the Government is to take forward a third runway at Heathrow airport, it needs to demonstrate that there is both the rail connectivity and capacity to enable expansion and achieve the airport’s stated aspiration of a zero increase in passenger and staff highway trips.
“The Southern Rail Access proposals, reliant on the rail lines between Windsor and Waterloo, cannot provide the capacity to support an expanded Heathrow.
“There are alternatives which could deliver the capacity and connectivity required – including direct links to Waterloo – and these are being investigated by TfL.
Daniel Moylan, who worked for years for Transport for London commented:
Waterloo-LHR rail link would be expensive (tunnels required) and would offer few trains because of congested lines into Waterloo. Not a solution.
More on government now trying to say none of the expensive (up to £18 billion or so, according to TfL) public transport improvements needed to deal with the extra passenger and demand from a 3rd runway.
2.4 There remains some uncertainty over whether all of the surface access schemes included in the AC’s estimate of costs are required as a direct result of expansion. For example, the M4 is already congested and the pressure on that corridor is expected to continue to grow with or without Heathrow expansion, as background demand continues to grow as a result of population increases and economic growth. Airport users are a relatively small proportion of those who use the route. The AC concluded that additional demand associated with expansion might be the factor that triggers the need for measures to increase capacity on the M4. These measures could include managing demand or providing additional capacity, including as widening sections of the M4. The AC included the full cost of M4 widening in its assessment, whilst acknowledging that there were alternatives to widening which might be less expensive.
2.5 Alternately, airport expansion may only have a limited impact, or could be viewed as simply bringing forward the need to undertake surface access improvements by a few years, implying that the full cost of the works should not be ascribed to airport expansion. The department has concluded that the M4 should be considered holistically as part of the normal roads investment process. It is not possible at this stage to say with confidence what the cost of any eventual solution to increased congestion on the M4 might be, or what proportion should fall to the airport.
Despite the endless calls, as usual, for cuts in Air Passenger Duty that happen before any budget statement, there is no change in the Autumn Statement to levels of APD – other than a slow annual rise in line with inflation, as has already been happening. The level for standard rate return fares anywhere in Europe is £13 now, and will be £13 next year. The level for longer flights (anything of over 2,000 miles) will be £75 from 1st April 2017, while it is £73 now. There is no APD for children aged under 16. The amount the Treasury expects to get in from APD is around £3.3 billion each year 2017/ 2018 (but that ignores the estimate of somewhere around £10 billion per year that is not paid in, as aviation pays no VAT or fuel duty). In addition the government is to pay £20 million “for the development of alternative aviation and heavy goods vehicle fuels” by 2020/21. Philip Hammond also said that “The Chief Secretary to the Treasury [The Rt Hon David Gauke MP] will chair a new ministerial group that will oversee the delivery of priority infrastructure projects.” This may be because infrastructure is cross departmental, and Ministers from individual departments will have to agree to commit funds (a Minister has responsibility to Parliament for their departmental budget approved by Treasury).
There was nothing on cutting APD in Chancellor Philip Hammond’s Autumn Statement on 23rd November 2016 .
“Air Passenger Duty (APD): regional review – The government is publishing a summary of responses to the consultation on how to support regional airports in England from the potential effects of APD devolution. Given the strong interaction with EU law, the government does not intend to take specific measures now, but intends to review this area again after the UK has exited from the EU.”
From the Treasury website dated August 2016
(APD stays at £13 for short haul Europe, and rises from £73 to £75 for anything further than 2,000 miles, from April 2017. (And up £4 for long haul first class etc, from £146 to £150).
“Future transport – The NPIF (National Productivity Investment Fund) will invest a further £390 million by 2020-21 to support ultra-low emission vehicles (ULEVs), renewable fuels, and connected and autonomous vehicles (CAVs). This includes £80 million for ULEV charging infrastructure, £150 million in support for low emission buses and taxis, £20 million for the development of alternative aviation and heavy goods vehicle fuels.”
” 3.28 Infrastructure performance – The Chief Secretary to the Treasury[he is apparently The Rt Hon David Gauke MP. ] will chair a new ministerial group that will oversee the delivery of priority infrastructure projects. The Infrastructure and Projects Authority will lead a review to identify ways government, working with industry, can improve the quality, cost and performance of UK infrastructure. The review will report in summer 2017.”
This is not something we have heard about before. It may be that The Lord Adonis led group (NIC) was set up by George Osborne leading to the Infrastructure and Projects Authority (IPA). Theresa May is slowly restoring the accountability structures of government.
Infrastructure is cross departmental. Ministers from individual departments will have to agree to commit funds (a Minister has responsibility to Parliament for their departmental budget
approved by Treasury). Being Ministerial it will have political as well as practical
considerations. However, it is more associated with “how much and where” rather than “what and how”. How it dovetails with existing planning law is not yet apparent.
Rob Hopkins, founder of the Transition Movement, reports in a blog about teaching a class at a French university, looking at how life will be in 2035. He brought the discussion onto flying, and the extent to which it would, or wouldn’t, be possible in 2035. This group of young students consider themselves to be global citizens. Many of them are international students, thinking nothing of flying home in the holidays, holidaying elsewhere, taking work placements on the other side of the world. Flying regularly is considered as everyday as eating and breathing. Rob considered the discussion under the framework of the “5 stages of grief”, with first denial, then anger, bargaining and then depression. (The final stage would be acceptance). Rob quotes George Monbiot saying we need to be cutting aviation, not expanding it and “It’s not a question of whether we open a new runway at Heathrow, rather which of the 2 existing ones we close, and that’s just for starters.” On the problem of love miles, flying across the world for weddings etc, Rob comments that this creates the problem where “we find two valid moral codes in irreconcilable antagonism”….”And what’s the moral response when a friend starts to tell of their wonderful 2 week break on the beaches of Phuket (3.16 tonnes of CO2)? We now accept it’s ok to express our disapproval if, for example, someone were to smoke close to our baby …. but to question flying remains hugely socially delicate.”
Can we learn to embrace a future of less flying?
By Rob Hopkins (Transition Network)
24th November 2016
Last week I was at HEC, a prestigious French business university near Paris. At one point, I taught a class of young, new-intake students, the cream of their generation, attending HEC to be given the best training possible in order to become the executives of the future. Their first project was to look forward to 2035, and to imagine how it might be and what might be the role/shape/approach of a particular corporation at that time. So the poor things got 2 hours with me (you have to feel for them). During the Q&A our discussion got onto flying, and the extent to which it would, or wouldn’t, be possible in 2035, which was when it all got very interesting.
It came up that I don’t fly (apart from, since 2006, one trip – more on that here), and that given that climate science says we need to get our carbon footprint down to around 3 tonnes per person per year from the current average of 9 (for the UK), and a flight to New York and back from the UK uses more than 1 year’s allowance, flying will be, by necessity in 2035, little more than an occasional luxury.
This group of young people consider themselves to be global citizens. Many of them are international students, thinking nothing of flying home in the holidays, holidaying elsewhere, taking work placements on the other side of the world. Flying regularly is considered as everyday as eating and breathing. Looking back, it was fascinating how the discussion took the group through at least the first four of Elizabeth Kubler-Ross’s ‘Five Stages of Grief’.
We started with denial. We talked about what Universities might look like in 2035, especially ones as international as HEC. Surely cutting back flying to any meaningful extent by 2035 is impossible given the nature of Universities today, ran one student’s argument. I countered that Universities would be forced to adapt to the world around them, and that perhaps the concept of international study would only become an option if combined with Slow Travel, something more akin to the Grand Tour of Victorian times. Online courses would become much prevalent, or simply studying closer to home.
For me, denial is best countered by George Monbiot in his book ‘Heat’ when he captures the essence of the debate: “the growth in aviation and the need to address climate change cannot be reconciled”. Aviation, he argues, needs to be cut by 87% if we are to stay below 2 degrees, and our target actually needs to be under 1.5 degrees. It’s not a question of whether we open a new runway at Heathrow, rather which of the 2 existing ones we close, and that’s just for starters.
But, one student pointed out, the air industry’s projections are for a huge increase in air travel by 2035. I reflected that that was what you would expect of the aviation industry, a self-fulfilling prophecy. We know that ‘predict and provide’ is a failed model in terms of cars and roads, so why does it still go unquestioned in relation to flying?
We then moved on to anger, albeit rather muted, a sense of quiet indignation at the idea. To this I pointed out that for me, the reduction in the amount of flying is inevitable, and to start living that way will make the shift much less traumatic. If all the UK’s airports closed tomorrow, it would affect me very little, whereas 10 years ago I would have found that very upsetting. Get ahead of the curve.
Then we were on to bargaining. “But surely we could have alternative fuels?” one young man asked. “Such as?” “Electricity? Biofuels?”. I pointed out that batteries large enough to enable a passenger plane to fly long distances would render the plane so heavy it’d never get off the ground, and that creating a renewable energy grid sufficient to power our economy, homes, and, potentially, electric cars in a low carbon way, is already a monumental challenge, never mind adding in the aviation sector. Biofuels are possible, but are basically the taking of food from the mouths of poor children in order to keep the rich flying.
Another student sustained the bargaining by adding hydrogen and micro algae to the mix. Hydrogen, I pointed out, is just a carrier, not a fuel, and is created by electricity, so the above issues apply. My co-teacher of the session, Julien Dossier, stepped in to note that even if algae were scaleable, which is doubtful, commercial pressures to grow the most algae per square metre would mean that strains would be developed that would multiply as rapidly as possible which, as would inevitably happen, were to escape into watercourses, would create a biodiversity catastrophe.
The fourth of Kubler Ross’s stages is depression. One young woman pointed out that she lives in Morocco, studies in Paris, and goes home regularly in her holidays. This is what Monbiot calls ‘Love Miles’, “the distance you must travel to visit friends and partners and relatives on the other side of the planet”. He succinctly identifies the heart of the issue as being the point where “we find two valid moral codes in irreconcilable antagonism”.
Julien talked about the family fallout from declining the invitation to a close friend’s wedding on the other side of the world, and I reflected on similar experiences. It’s painful. And what’s the moral response when a friend starts to tell of their wonderful 2 week break on the beaches of Phuket (3.16 tonnes of CO2)? We now accept it’s ok to express our disapproval if, for example, someone were to smoke close to our baby or something, but to question flying remains hugely socially delicate.
… and then Acceptance (not yet)
Did the class reach the stage of acceptance? I don’t think so, not yet. I imagine the subject was much discussed in the bars and cafes of HEC that evening. But, as Julien pointed out later in the class, if they are wanting to become the successful entrepreneurs of 2035, that’s the reality they need to be designing for. During the Industrial Revolution, the people who correctly read where it was all going, who read the runes, were able to create successful businesses, as they have with any major transition. This one is no different.
But you have to read the runes right, and in this case the runes dictate that by 2035 there will be very few planes in our skies. The Transition needs great entrepreneurs, but they need to start from a place that resonates with the reality of the challenges we face and the opportunities they present, and with a different set of values and motivations.
The low cost of air travel encourages extra demand, which not only increases people’s carbon footprint, but also raises the amount that Brits spend abroad – known as the tourism deficit (the difference between the amount UK residents spend on trips abroad, over what residents abroad spend on trips to the UK). The deficit was £16.9 billion in 2015. Air travel is so cheap because it is not charged VAT and there is no fuel duty. The only tax is Air Passenger Duty, that is £13 for any return fight to a European country, and free for children. Fearing loss of profit due to Brexit and the lower value of the £ against other currencies, Ryanair is making ever more crazy offers of cut prices. To try to keep passenger numbers up, he hopes to offer “free” flights in due course. The catch would be that Ryanair would want to get a share in retail income (shopping and car parking at airports), so there would be profit per passenger. This dotty system, of charging so little for something that emits so much carbon, and sucks money out of the UK, is something society should take a long, hard look at. Is it really desirable, looking towards the longer term, that flying is so dirt cheap? And that the aviation sector is not included in either the UK’s carbon targets, nor has a proper global mechanism to deal with rapidly rising CO2 from the sector?
“Ryanair could introduce free flights in five years’ time”
By FIONA SIMPSON (Standard)
Michael O’Leary, chief executive of the company, said on Monday that he was looking at plans to cut fares completely in a bid to increase passenger numbers.
He claimed airports should share revenue from retail outlets with companies which attract the biggest footfall.
Ryanair already offers seats for as little as 1p but Mr O’Leary said the company is making a loss after paying £13 air passenger duty for every seat sold in Britain.
Speaking to the Airport Operators Association, he said that Ryanair wanted to abolish fares in five to ten years to boost its passenger numbers to 200 million.
He admitted that huge airports like Heathrow would not be able to share retail profits, but suggested the company could target smaller sites, The Times reported.
He said: “I have this vision that in the next five to ten years that the air fares on Ryanair will be free, in which case the flights will be full and we will be making our money out of sharing the airport revenues.
“I’m doing seat sales this week at £4 and I’m paying the £13 APD; I’m paying you to fly with me. Instead of promotional tickets being £9 or £5, they will be free.”
Ryanair and easyJet have around the same numbers of air passengers in the UK – around 50 – 60 million per year. It is not easy to find the number of Ryanair passengers from the UK, as it is not a UK airline and figures tend to be for all passengers. The total number of air passengers at UK airports in 2015 was about 250 million.
Ryanair launches US election flight sale offering 1 million seats for €9.99
According to Ryanair, nobody ‘Trumps’ their fares
By LIZ CONNOR (Standard)
9 November 2016
Low cost airline Ryanair has launched a sale to coincide with the US election result, offering flights for just €9.99.
The company launched the bargain flight bonanza with a series of tongue-in-cheek Tweets, designed to mock both US President Donald Trump and Democratic candidate Hillary Clinton.
Tweets sent out by the airline with the hashtag #VoteLowFares poked fun at Trump with the message “Down with high fare, down with high walls.”
Another advert for the cut-price flights included the gag “even she wouldn’t delete our email offers” – in reference to Hillary Clinton’s email scandal, which became the subject of an FBI investigation.
The Irish airline later tweeted ‘No one Trumps Ryanair fares!’, in reference to the news that Donald Trump had achieved a shock defeat of rival Clinton to become the next President of the United States.
Included in Ryanair’s flash flight sale are cheap tickets to destinations in Ireland and Spain – including Alicante, Cork and Shannon.
But if you want get involved in the deal, you’ll have to be speedy – as the sale, which is currently available to book on the Ryanair website, ends at midnight tonight.
Ryanair profits to be hit by fall in pound. Budget airline expects full-year profit growth of 7%, against earlier expectations of 12%
By Angela Monaghan (Guardian)
Tuesday 18 October 2016
Ryanair has said its full-year profits will be lower than expected because of the sharp drop in the value of the pound since the Brexit vote in June.
The budget airline said an 18% fall in sterling since the referendum was the main reason it was downgrading its expectations for full-year profit growth, from 12% to to 7%.
Profits are now expected to be between €1.3bn (£900m) and €1.35bn. The Dublin-based company warned, however, that the outlook for profits would worsen in the event of a further drop in the pound or weakness in ticket prices.
Fares in the second half of the year are expected to fall by 13-15%, more than the 10-12% previously expected.
Michael O’Leary, the chief executive, said lower fares would be partially offset by cost savings, with costs expected to fall by 3% in the full year, more than the 1% given in previous guidance.
“The recent sharp decline in sterling will weaken second-half yields by slightly more than we had originally expected,” he said.
O’Leary is one of several senior business figures to criticise the government in recent weeks for a lack of clarity on its Brexit strategy.
“Whether the UK leaves the EU or stays, I couldn’t care less. The issue for us is whether we stay in the single market,” he said in September.
Chris Grayling and the DfT were eager to point out how a 3rd Heathrow runway would increase links to the regions, and increase the number of routes from Heathrow from 8 now to 14 in future. And these links might have to be ensured by payments. Heathrow, in trying to persuade government this was possible, said it would create a new £10m Route Development Fund. The Airports Commission said there should be a Public Service Obligations on an airport-to-airport basis, to encourage these unprofitable routes. Now Willie Walsh has confirmed that there is “zero chance” of British Airways operating any new domestic flights from an expanded Heathrow. He will not be told, by government or an airport, where to fly. He says the high landing charges, inevitable to pay for the expansion, made it impossible to deliver an increase in domestic air links. He would refuse to run these links even if Holland-Kaye “begs me to do it” because it would not be profitable. He said Heathrow was “fat, dumb and happy” and that it attracted large numbers of airlines but that many failed to make a profit. He also said with a 3rd runway, Heathrow would price out most airlines. Holland-Kaye is hoping he can get easyJet, Flybe and BMI Regional to take on potential regional routes. Mr Walsh said the current charge of £40 for a return trip would double to £80 per passenger with a new runway.
Heathrow charges rule out more domestic links, says BA
High landing charges at an expanded Heathrow will make it impossible to deliver an increase in domestic air links, the head of British Airways parent company warned.
International Airlines Group chief executive Willie Walsh said there is “zero chance” of BA operating any new domestic flights once the London hub adds a third runway.
BA would refuse to step in even if the head of Heathrow “begs me to do it” because of the expense of operating out of Heathrow.
He told the Airport Operators Association’s annual conference in London that Heathrow was “fat, dumb and happy” and that it attracted large numbers of airlines but that many failed to make a profit.
Walsh has claimed that plans for a third runway would price out most airlines. Heathrow has denied this, insisting that it will attempt to keep landing charges as flat as possible when a new runway is built as early as 2025.
Heathrow chief executive John Holland-Kaye said it was negotiating with easyJet about moving to the airport.
He said: “From 2025, when the new runway opens, we can add more domestic routes and more frequencies as well as competition on existing routes.
“We have been working with easyJet, Flybe and, more recently, Bmi Regional on their potential route networks.”
Heathrow has links to eight UK cities but it said at least six routes would be created, including to Liverpool, Humberside, Isle of Man, Jersey and Newquay.
Walsh told how BA had increased its share of slots from 36% to 53% over the past 15 years after buying space from other airlines that had been forced to abandon the expensive hub.
He said the current charge of £40 for a return trip would double to £80 per passenger with a new runway.
Heathrow has denied this, insisting that it will attempt to keep landing charges as flat as possible.
Transport secretary Chris Grayling has said some of the additional routes created by an expanded airport would be ring-fenced for domestic flights.
But Walsh said he doubted that any airlines would be able to operate the routes and there was a “zero chance” of BA stepping in, The Times reported.
“We are not going to listen to any airport or any government telling us where to fly. None whatsoever. So we are not going to do it,” he said.
“If someone’s going to fly between Heathrow and Newquay, if it’s us, it will be done on a purely commercial basis. If John Holland-Kaye begs me to do it, I won’t do it. If he gives me £10 million a year, I’ll think about it.”
Bmi and Virgin’s Little Red had both attempted to operate domestic networks into Heathrow and it had been a “complete disaster”.
“It’s not going to happen unless there is a commercial reality behind it,” Walsh said. “We’re not interested in these artificial routes.”
“A third runway will also support new connections to the UK’s regions as well as safeguarding existing domestic routes. Heathrow has proposed a further 6 new routes to Belfast International, Liverpool, Newquay, Humberside, Prestwick and Durham Tees Valley to be added after expansion. The 8 existing routes offered today are: Edinburgh, Glasgow, Inverness, Aberdeen, Belfast City, Manchester, Newcastle and Leeds Bradford. This would provide 14 domestic routes in total, and spread benefits right across the country.
“Government will also take all necessary steps including, where appropriate, ring-fencing a suitable proportion of new slots for domestic routes, to ensure enhanced connectivity within the UK.”
“The third assurance is about how the expanded airport will benefit the whole of the UK, not just by creating jobs across the airport’s UK-wide supply chain, but by giving even more of the UK access to important international markets by strengthening existing domestic links and developing new connections to regions that are not currently served. The airport expects to add six more domestic routes across the UK by 2030, bringing the total to 14. That will strengthen existing links to nations and regions such as Northern Ireland, Scotland and the north of England, and allow the development of new connections to regions such as the south-west.
“I am determined that Heathrow will meet those pledges and that the Government will hold the airport to account on them. Furthermore, the Government will take all necessary steps, including, where appropriate, ring-fencing a suitable proportion of new slots for domestic routes through public service obligations to enhance connectivity within the United Kingdom. It is important to stress that this is a decision in the national interest; it is not just about the south-east of England.”
The decision to build a new runway at Heathrow is the right one, but it is absolutely vital that the Secretary of State delivers on his pledge to ensure that the benefits of expansion are felt in every nation and region of the UK. The Davies commission noted the difficulties in reserving slots for domestic flights from regional airports posed by the EU slot regulations. Now that the UK has voted to leave the EU what assessment has he made of the decision for potential measures to protect and enhance domestic connectivity?
The slot issue is one avenue for us to follow. We want to have a detailed discussion with regional airports, airlines and Heathrow itself about the best mechanism. I am absolutely clear that the planning consents, which I hope and believe will eventually be granted, and the national policy statements we prepare must contain provisions that protect connectivity. We need to work out the best way of doing it. It is not just about having a handful of slots at 11 o’clock at night; it is also about connectivity with international flights. We have to get this right for the whole United Kingdom and I give a commitment that that is what our agenda will be.
and Ian Murray (Edinburgh South) (Lab)
This is indeed the right decision for the UK and for Scotland, but will the Secretary of State confirm that any additional slot capacity for domestic airlines will be guaranteed either in the planning process or in legislation? Furthermore, will he undertake an ongoing assessment of the ability of regional airports such as Edinburgh to attract direct routes following Heathrow’s third runway coming on stream in nine years’ time?
We will look carefully at what the right mechanism should be. It might not be as simple as guaranteeing a number of slots, because I want there to be the right connectivity. For example, I do not want a regional airport to be given a tail-end slot at 11 o’clock at night that does not allow proper links between that airport and international destinations. We have to think carefully about how this should be done and what the best mechanism is for doing it. However, I have given a guarantee that there will be protections for the regional airports and the connectivity that they need.
“Heathrow already links eight cities to the world – Aberdeen, Belfast City, Edinburgh, Glasgow, Inverness, Leeds, Newcastle and Manchester. An expanded Heathrow would add flights to new domestic routes to Jersey, Isle of Man and Belfast International. [These are the routes EasyJet suggested it might add, if it started operations at Heathrow, with a 3rd runway. See below]
“Heathrow will be establishing a special £10m Route Development Fund, providing start-up support for new domestic destinations. This will support up to five new routes from Heathrow with airports like Liverpool, Humberside and Newquay on the shortlist.” [Newquay already has a PSO funded route to Gatwick. The Government’s Regional Air Connectivity Fund (RACF), is a £20 million fund set aside by the coalition Government, to pay for routes such as Newquay].
Heathrow also says:
“A third runway will lead to better connections from Wales to the rest of the globe – enhanced by the fast Western Rail Link that is backed by the Welsh Assembly.” [Scarcely a direct consequence of a runway …. Cardiff is not on the list of airports mentioned above. AW note].
Heathrow actually says that much of the connection to the regions will be by better rail links, getting people to Heathrow. [ link Page 12].
The Airports Commission realised it would be difficult to get regional links from Heathrow.
“Public Service Obligations could be used to support a wide network of domestic routes at Heathrow.”
and P 35
“It is crucial to ensure that expansion at Heathrow delivers benefits for all of the nations and regions of the UK
“A new northwest runway is likely to protect and bolster domestic services in and out of London leading to a rise in the number of passengers and frequency of services on the thickest routes, but more can be done to facilitate connections from the airport to an increased number of domestic destinations.
“To secure this, the Commission recommends that:
The Government should alter its guidance to allow the introduction of Public Service Obligations on an airport-to-airport basis, [AC emphasis] and use them to support a widespread network of domestic routes at the expanded airport.
“HAL should implement additional measures to enhance domestic connectivity, including reduced charges and start-up funding for regional services. ” [AC emphasis] ”
and P 78
” An important consequence of the airport capacity constraints in the UK is the apparent decline of domestic connectivity into the largest London airports and particularly into Heathrow.”….”Heathrow saw over 40,000 domestic flights in 1990 compared to just 23,000 in 2014″
and P 79
“A significant decline in the number of domestic routes into Heathrow has also been seen over recent years (see Figure 3.3). The Commission’s forecasts predict that, unless capacity is expanded, this pattern will continue, with the number of destinations served from Heathrow declining to as few as three by 2040. The primary reason for this reduction in domestic connectivity at Heathrow is that, with practically all the airports slots taken up, many domestic destinations are priced out by long-haul routes that deliver higher yields per passenger.”
and P 266
“The Commission’s forecasts suggest that with expansion more than twice as many domestic passengers will travel via Heathrow in 2040 than if the airport’s capacity remains constrained. In addition, to ensure that cities and regions across the UK can benefit from Heathrow’s enhanced connectivity, including areas such as the Highlands and Islands, the Isle of Man and the Tees Valley, which have lost their direct links to Heathrow over recent decades, the Government should use Public Service Obligations (PSO) to support a widespread network of domestic routes.”
and Page 313
“Heathrow Airport Ltd (HAL) should implement additional measures to enhance domestic connectivity, including introducing reduced charges and start-up funding for regional services.”
“Capacity constraints at Heathrow Airport have seen the number of domestic connections decline at the airport over recent years. No daily service has operated between Heathrow and Liverpool since 1991, Inverness since 1997 and Durham Tees Valley since 2008.”
and Page 314
“The new slots made available at Heathrow would allow airlines to establish new domestic links to the capital, re-establish lost connections and increase frequencies on those that are already in place. Heathrow Airport Ltd and easyJet’s consultation responses argued that were the low-cost carrier to move to the airport, it would seek to develop new services to Inverness, Jersey, Belfast International and the Isle of Man”. [So some of these potential future domestic links might depend on EasyJet? Which will resist the high landing charges necessary to pay for the 3rd runway? AW note].
“To support this point, the National Connectivity Task Force put forward analysis considering the latent demand for services from the UK regions to the capital, suggesting that in 2040 domestic services could utilise 136-175 additional daily slot pairs at an expanded Heathrow, compared to current day slot allocation of 55 daily 313 slot pairs. This would equate to 6.5% of runway capacity at the expanded airport being utilised for domestic services, up from 4.2% currently. ”
and Page 315
“15.7 Against this positive outlook, it is important to note that even in the event of expansion, a number of competing pressures may limit the increase in domestic services to an enlarged Heathrow. One such pressure could be continuing competition from overseas hubs, which may still be able to offer cheaper services, higher frequencies, or more convenient connections on some routes. An expanded Heathrow is also likely to see rapid growth in demand, which may relatively quickly begin to exert pressure on slots during the most popular periods.
“15.8 The Commission’s forecasts reflect these pressures and suggest that without specific measures to support domestic connectivity even an expanded Heathrow may accommodate fewer domestic routes in future than the seven served currently. It would still however see more than the three domestic routes predicted to be available from the airport without expansion. “
“Given the historic long-term pressures on the availability of capacity for domestic services at a constrained Heathrow, any stabilisation in the numbers of domestic services operating to the airport is to be welcomed. Nonetheless, the Commission believes that this should not be the limit of the UK’s or the airport operator’s ambition.
“15.10 In summary, a new runway at Heathrow will enhance the domestic connectivity of the UK, strongly benefitting the nations and regions outside London and the South East. In order to ensure that these benefits are widely spread and a diverse network of domestic routes is supported at the expanded airport, however, additional measures may be required. These are discussed in the next section of this chapter.”
There are considerable difficulties in setting up PSOs (Public Service Obligations) for routes, and there is no guarantee that the UK government would want to use public funds in this way, or would be permitted to within the EU. These routes could only be made viable if given public subsidy. Is this a good use of taxpayer’s money? (especially as only about 11% of UK flights in 2015 were for business, and the rest for leisure).
This is not April Fools news. Willie Walsh has only learned, from looking at an Airports Commission map, that the head offices of BA are to be demolished to make way for the Heathrow 3rd runway. Walsh is CEO of IAG, which owns British Airways – and BA has more than half the flights using Heathrow. The head office of both IAG and BA is at Waterside, in Harmondsworth – and would be under the 3rd runway. Walsh said he received no formal warning of the proposed demolition of his headquarters, which only opened in 1998 at a cost of £200 million and sits in a 115-hectare (280-acre) manmade park. Walsh said the HQ was “a fantastic environmental achievement on our part”. Walsh’s grievance over his doomed HQ has been compounded by the prospect of being effectively charged for the compensation bill. IAG will receive compensation, but this will largely come from charges to airlines – so IAG would largely have to compensate itself. The scale of increased charges to airlines, because of the cost of building the new runway, terminal etc, will be determined by the CAA. Walsh said: “That compensation goes into the regulatory asset base and we end up paying 56% of that. We can’t have a situation where I end up paying for the destruction of my own head office.” This office fiasco may have contributed to Wash’s antipathy to Heathrow’s plans. At the recent AOA conference he described Heathrow as “fat, dumb and happy.” at the Airport Operators Association conference in London.
BA boss shocked to find out that third Heathrow runway will raze his HQ
Airline chief Wille Walsh furious about not being told of demolition – and about fact he will ‘end up paying for the destruction’. The boss of Heathrow’s biggest customer, British Airways, only discovered that building the airport’s planned third runway would require the demolition of his airline’s head office after looking at a map.
Willie Walsh, the chief executive of BA’s parent company IAG, claimed that despite the group being responsible for about half of all flights at the London hub, he received no formal warning of the proposed demolition.
He said: “We were never actually informed or advised by Heathrow that they intended to knock down our headquarters.”
However, it looks unlikely to stay that way. “The first I saw of it was when the Airport Commission report came out and I saw a map and I thought, that looks very close to Waterside,” Walsh said. “Then I discovered it actually went right through Waterside.”
Walsh’s grievance over his doomed HQ has been compounded by the prospect of being effectively charged for the compensation bill.
While all properties in the path of the runway will be compulsorily purchased at 25% over the market price, the way Heathrow’s charges are set by the Civil Aviation Authority means that airlines are likely to pay more to operate from the airport as expansion costs grow.
Walsh said: “That compensation goes into the regulatory asset base and we end up paying 56% of that.
“We can’t have a situation where I end up paying for the destruction of my own head office.”
The IAG boss accused Heathrow of failing to hold proper discussions with airlines about creating a cost-effective airport and expansion plan.
He said: “I don’t think they have the capacity to engage. They’ve never had to go out there and encourage airlines to operate from [Heathrow], unlike every other airport … Heathrow sits there fat, dumb and happy, waiting for the queue to build up.”
In approving Heathrow’s expansion plans last month, the government said that increased domestic flights from around the UK would be a precondition.
But Walsh stated that his airlines would not operate routes to airports such as Newquay in Cornwall, “even if [Heathrow chief executive] John Holland-Kaye got down and begged me”.
The Committee on Climate Change (CCC) has been giving the UK government the advice, since 2009 (when government was trying to get a 3rd Heathrow runway) that UK aviation should emit no more CO2 than its level in 2005 (which was 37.5MtCO2) per year by 2050. This has tacitly been accepted by government since then. But the DfT “sensitivities” document put out on 25th October, said that this cap on UK aviation carbon was “unrealistic” and its assessments were only now looking at the carbon traded option. That means UK aviation CO2 well above the target. The Chairman of the CCC, Lord Deben, has now written to Greg Clark, Sec of State at BEIS (now in charge of UK carbon emissions, since DECC was scrapped) to point out that the DfT seems to no longer see the constraint of 37.5MtCO2 as being important, and its forecasts and business assumptions are all now based on higher CO2 emissions by UK aviation. Lord Deben says: “If emissions from aviation are now anticipated to be higher than 2005 levels, then all other sectors would have to prepare for correspondingly higher emissions reductions in 2050.” Even if UK aviation stuck at 37.5Mt CO2 by 2050, this would mean “an 85% reduction in emissions in all to her sectors”. The CCC does not have confidence that cuts of over 85% could be made. That implies the UK would miss its legally binding CO2 target.
Letter: Department for Transport’s assessment of the case for a third runway at Heathrow
The Chairman of the Committee on Climate Change (CCC), Lord Deben, has written to the Secretary of State for Business, Energy and Industrial Strategy, the Rt Hon Greg Clark MP, regarding the Department for Transport’s (DfT) assessment of the case for a third runway at Heathrow airport.
The letter sets out the Committee’s concerns about how the DfT business case has presented the implications for UK greenhouse gas emissions from aviation.
This is where the DfT states that using the carbon-capped figures is “unrealistic” and so they are only looking at the carbon traded figures (which allow for Heathrow expansion, and aviation emissions above the target of 37.5MtCO2 that they have been recommended, by the CCC (Committee on Climate Change) since 2009.
Page 15 of the DfT document (25.10.2016)
Further Review and Sensitivities Report
Airport Capacity in the South East
“1.12 The AC’s approach to modelling the carbon-capped scenario uses carbon price assumptions that are higher than the central values published by the Department of Energy and Climate Change (DECC) for appraisal. The carbon-capped scenario is helpful for understanding the varying effects of constraining aviation CO2 emissions on aviation demand and the impact on the case for airport expansion, but was described by the AC as “unrealistic in future policy terms”. ”
In other words it can’t be done..
The Aviation Environment Federation (AEF) view:
What answers has the Government found to the environmental hurdles facing a third runway?
As AEF has consistently pointed out, and as the Committee on Climate Change reminded Government today, there is no plan for delivering the aviation emissions limit required to deliver the Climate Change Act either with or without a new runway.
The last time we had a government supporting runway expansion, it specified that this would be conditional on the sector’s CO2 emissions being on course not to exceed 37.5 Mt by 2050, in line with the CCC’s advice. Today’s announcement included no such commitment, instead making vague references to the global carbon offsetting scheme for aviation agreed this month, and to potential efficiencies arising from better air traffic management – both measures that are (effectively) already taken into account in the CCC’s modelling, and that won’t bring us anywhere near to achieving the minimum level of ambition required under UK law.
So what does the Government have to say about how the CCC’s recommendation will be met? The answer is deeply buried in a technical paper released alongside the announcement which states that the Airports Commission’s carbon-capped scenario “is helpful for understanding the varying effects of constraining aviation CO2 emissions on aviation demand and the impact on the case for airport expansion but was described by the AC as ‘unrealistic in future policy terms’”. In other words it can’t be done.
Analysis by Carbon Brief: Aviation to consume half of UK’s 1.5C carbon budget by 2050
November 21, 2016
The UK aviation’s greenhouse gas emissions could consume around half the carbon budget available to the UK in 2050, even if the sector’s emissions growth is constrained. An assessment by Carbon Brief shows that even with no new runway, the anticipated demand for air travel – from DfT forecasts – could mean UK aviation (flights taking off from UK airports) could be 47 MtCO2e by 2050. With a new runway, the emissions could be as much as 51 MtCO2e in 2050. The Paris climate agreement means the UK must raise its existing climate ambition. The UK’s current legislated target, to limit global temperature rise to below 2 degrees C, is to cut CO2 emissions 80% below 1990 levels by 2050. ie. from 800 MtCO2 per year to 160 MtCO2 per year. To keep below 1.5 degrees C the reduction in CO2 would be around 91% (86 – 96%) below the 1990 level, ie. 72 MtCO2 per year for the UK. Therefore if UK aviation emitted 37.5 MtCO2 per year by 2050 would be about 52% of the UK’s carbon limit of 72 MtCO2 for a 1.5C global target, or about 23.4% of the UK’s carbon limit of about 160 MtCO2 for a 2C global target. And if instead of sticking to the 37.5 MtCO2 limit (which the DfT now says is “unrealistic”)* UK aviation emitted 51 MtCO2 by 2050 that would be about 71% of the UK’s carbon limit of 72 MtCO2 for a 1.5C global target, or about 32% of the UK’s carbon limit of about 160 MtCO2 by 2050 for a 2C global target.
On 2nd November, environmental lawyers ClientEarth inflicted a humiliating legal defeat on the UK government (the 2nd in 18 months) when the high court ruled that DEFRA plans to tackle illegal levels of air pollution in many parts of the UK were unlawful. The court gave the government 7 days to agree on the next steps, but it rejected the proposal from ClientEarth for an 8 month timetable for the improvements, saying it needed till September 2017. Now the high court judge, Mr Justice Garnham, has ruled that DEFRA must must publish a stronger air quality draft plan by 24th April 2017 and a final one by 31st July 2017. The judge also ordered the government to publish the data on which it will base its new plan. In his judgement on 2nd, the judge said it was “remarkable” that ministers knew they were using over-optimistic pollution modelling, based on flawed lab tests of diesel vehicles rather than actual emissions on the road, but proceeded anyway. He also ruled that ClientEarth can go back to court if it deems the government’s draft plan, due in April 2017, is once again not good enough to cut pollution rapidly. Alan Andrews, ClientEarth’s air quality lawyer, said: “We will be watching on behalf of everyone living in the UK and will return to court if the government is failing.” ClientEarth believes measure such as a diesel scrappage scheme and other measures that would cost money, that the Treasury has been unwilling to approve.
High court gives ministers deadline for tougher air pollution plan
UK environment department must publish stronger air quality plan by July 2017, after high court judge says its suggested date was ‘far too leisurely’
The government is being forced to deliver an effective plan to tackle the UK’s air pollution crisis within eight months, after a high court judge rejected a longer timetable as “far too leisurely”.
Environmental lawyers ClientEarth inflicted a humiliating legal defeat on ministers earlier in November – its second in 18 months – when the high court ruled that ministers’ plans to tackle illegal levels of air pollution in many UK cities and towns were so poor they were unlawful.
But on Monday, (21st November) Mr Justice Garnham ordered the government to produce a draft plan by 24 April 2017 and a final one by 31 July 2017.
An earlier government plan to tackle air pollution was declared illegal in April 2015 and ministers were ordered to produce a new strategy, which it did in December 2015. But that plan was also found not to meet the law’s requirement of cutting nitrogen dioxide (NO2) pollution to legal levels in the “shortest possible time”.
James Thornton, the CEO of ClientEarth, said: “It is very clear that the government must now act swiftly and decisively to protect British people from toxic and illegal air pollution. The government has said throughout this process that it takes air pollution seriously. Until now, it’s actions have not lived up to this claim. Now is the time for the government to prove that it truly cares about people’s health.”
After the most recent court defeat, prime minister Theresa May said: “There is more to do and we will do it.”
A spokeswoman for the Department of Environment, Food and Rural Affairs said on Monday: “We are determined to cut harmful emissions. Our plans have always followed the best available evidence and we have always been clear that we are ready to update them if necessary. We can now confirm a timetable for updating our plans next year and further improving the nation’s air quality.”
The judge also ordered the government to publish the data on which it will base its new plan.
Earlier in November he said it was “remarkable” that ministers knew they were using over-optimistic pollution modelling, based on flawed lab tests of diesel vehicles rather than actual emissions on the road, but proceeded anyway.
The existing government plan is for just six clean air zones (CAZs) – Birmingham, Leeds, Nottingham, Derby, Southampton and London – where some polluting diesel vehicles are charged to enter city centres.
Andrews added: “If the government are at all serious about complying with the court order, a national network of CAZs must be part of their plans, which means including the dirtiest diesel cars and creating far more than the current six.”
NO2 has been at illegal levels in 90% of the country’s air quality zones since 2010 and stems largely from diesel vehicles.
ClientEarth also argued in court that an effective plan would require other measures including a scrappage scheme for older diesel vehicles, retrofits of HGVs and more funding for public transport and cycling and walking schemes.
Documents revealed during the recent high court case showed the Treasury had blocked initial government plans for 16 CAZs in towns and cities blighted by air pollution, due to concern about the political impact of angering motorists.
Both the environment and transport departments also recommended changes to vehicle excise duty rates to encourage the purchase of low-pollution vehicles. But the Treasury also rejected that idea, along with a scrappage scheme for older diesels.
Drivers of polluting diesel vehicles could soon be charged to enter many city centres across Britain, after the government accepted in the high court on Wednesday that its current plans to tackle the nation’s air pollution crisis were so poor they broke the law.
The humiliating legal defeat is the second in 18 months and ends years of inadequate action and delays to tackle the problem which causes 50,000 early deaths every year.
Ministers are now bound to implement new measures to cut toxic air quickly and the prime minister, Theresa May, indicated the government would this time respond positively: “There is more to do and we will do it.”
The most likely measure is using charges to deter polluting diesel vehicles from “clean air zones” in urban centres, which could be in place next year in London and in 2018 in Birmingham and other cities. Nitrogen dioxide, the pollutant at the heart of the legal case, has been at illegal levels in 90% of the country’s air quality zones since 2010 and largely stems from diesel vehicles.
EU law requires the government to cut the illegal pollution in the “shortest possible time” but legal NGO ClientEarth, which brought the cases, argued the government’s plans ignored many measures that could help achieve this.
The government said it would not appeal against the decision and agreed in court to discuss with ClientEarth a new timetable for more realistic pollution modelling and the steps needed to bring pollution levels down to legal levels. The parties will return to court in a week but if agreement cannot be reached, the judge could impose a timetable upon the government.
At prime minister’s questions, May said: “We now recognise that Defra [the Department for Environment, Food and Rural Affairs] has to look at the judgment made by the courts and we now have to look again at the proposals we will bring forward. Nobody in this house doubts the importance of the issue of air quality.”
The government’s own estimates show air pollution causes at least £27.5bn a year and in April MPs called the issue a “public health emergency”.
ClientEarth lawyers said they looked forward to working with Defra ministers to make a genuine attempt to rapidly cut pollution to legal limits throughout the UK, including a national network of clean air zones by 2018. “The government will have to be tougher on diesel,” said James Thornton, CEO of ClientEarth. “If you put in clean air zones, it works overnight.”
“Today’s ruling lays the blame at the door of the government for its complacency in failing to tackle the problem quickly and credibly,” said the mayor of London, Sadiq Khan, who took part in the case. “In so doing they have let down millions of people the length and breadth of the country.” Khan aims to have pollution charging in place in central London by 2017 and across the area within the north and south circular roads by 2019.
ClientEarth defeated the government on the same issue at the supreme court in April 2015. Ministers were then ordered to draw up a new action plan, but on Wednesday that new plan was also found to be illegal. The UK’s duty to cut illegal air pollution as quickly as possible derives from EU laws but the action required following the high court defeat will be taken well before Brexit takes place. The government has said it will transfer all EU rules into UK law but, post-Brexit, the government could revise air pollution legislation.
Both the environment and transport departments recommended changes to vehicle excise duty rates to encourage the purchase of low-pollution vehicles. But the Treasury also rejected that idea, along with a scrappage scheme for older diesels, which ClientEarth supports.
The government’s draft plan had envisaged 16 clean air zones, but in the final plan the number was cut, on the grounds of costs to business, to just five outside London: Birmingham, Leeds, Nottingham, Derby and Southampton. The further cities and towns that now need to introduce clean air zones will be determined by the more realistic pollution modelling ordered by the court on Wednesday.
Keith Taylor, Green party MEP, said: “The failure highlighted by the judge today is as much moral as it is legal: ministers have displayed an extremely concerning attitude of indifference towards their duty to safeguard the health of British citizens.”
High Court win by ClientEarth on air pollution casts more doubt on the possibility of adding a Heathrow runway
November 2, 2016
The environmental law group, ClientEarth, has won its High Court case against the Government over its failure to tackle illegal air pollution across the UK. The judge agreed that the UK government had failed to take measures that would bring the UK into compliance with the law “as soon as possible” and ministers knew over optimistic pollution modelling was being used. AEF (the Aviation Environment Federation) says this failure by the government to get NO2 levels down discredits the air quality plan that formed the basis for the Government’s argument that a new runway at Heathrow would neither cause not exacerbate legal breaches in NO2 levels. Required to publish an updated plan for UK air quality, Defra produced one in December 2015. This brought forward the anticipated date of compliance to 2025 for London – just in time for the opening of a new runway according to the Airports Commission’s anticipated timeline. But the plans appeared to rely on new, more optimistic forecasts of emissions from diesel vehicles without presenting substantive policy proposals to actually deliver improvements. A new runway at either Heathrow or Gatwick would lead to higher levels of air pollution, and the new court ruling confirms that compliance should not be based on over optimistic modelling – and government needs instead to take action to cut pollution levels.
The revaluation of business properties usually happens every 5 years but was controversially delayed by 2 years as a result of the economic downturn. The last revaluation was 1st April 2010 based on the property market at 1st April 2008.It is just a matter of weeks since the Government adjusted the Rateable Values of every business property in England and Wales to reflect changes in the property market. New Rateable Values for tens of thousands of businesses in England and Wales were announced in September, based on values on 1st April 2015. These values will be used to determine the basis of the tax calculation for rates next April and for the next 5 years. Properties that have out-performed equivalent ones will pay more, and those whose properties have underperformed can expect to see their bills fall. While Heathrow remains the highest payer of business rates in the country, its bill is to fall. The Government reduced its property assessment by £32.5 million – from £247.5m to £215 million. On average over the next 5 years, Heathrow will probably pay £118.02 million per year in business rates bills, compared to £127.96m in the previous List; a 5 year saving of £49.7 million. There has been a further £6.49m reduction in property tax assessments at two cargo centres at Heathrow Airport too.
Whilst businesses in Richmond upon Thames face a staggering £70m increase in business rates over the next 5 years, Heathrow Airport, the issue at the centre of the current by-election, in comparison received a tax cut ahead of the expansion announcement, say CVS business rates specialists.
The reduction in Rateable Value at Heathrow Airport is almost the equivalent of the entire increase in property value for all 5,802 Richmond Upon Thames businesses.
It is just a matter of weeks since the Government adjusted the Rateable Values of every business property in England and Wales to reflect changes in the property market. The new Rateable Value will be used to determine the basis of the tax calculation for rates next April and for the next 5 years.
The revaluation of business properties usually happens every 5 years but was controversially delayed by 2 years as a result of the economic downturn. The last revaluation came into effect on 1st April 2010 based on the property market as long ago as 1st April 2008.
Those whose properties have performed better than their peers – by dint of the quality of their property, location or business sector – since the previous revaluation can expect to see their bills rise. Equally, those whose properties have underperformed can expect to see their bills fall.
Whilst Heathrow Airport remains the largest ratepayer in England and Wales, the Government reduced its property assessment by £32.5m- from £247.5m to £215m- meaning that next year it will pay £3.92m less in property tax.
However, because of the Government-proposed transitional rate relief scheme, any reductions in Rateable Value are capped and phased in gradually over the Rating List. This means that on average over the next 5 years, CVS surveyors suggests that Heathrow Airport will pay £118.02m per year in business rates bills, which is down from £127.96m in the previous List; a 5 year saving of £49.7m.
There has been a further £6.49m reduction in property tax assessments at two cargo centres at Heathrow Airport too.
But Gatwick Airport, Heathrow’s rival for expansion, saw its Rateable Value rise from £56.6m to £60.4m, making it the second largest ratepayer in the country.
Yet CVS business rates specialists suggest new Rateable Values recently published show that across Richmond Upon Thames, total property assessments have increased by a staggering £29.05m.
Their analysis shows 5,802 Richmond Upon Thames businesses had a combined Rateable Value of £200,780,068 based on the last property assessment in 2010, which has formed the basis of rates bills for the last 7 years, but this has just increased to £229,827,201.
CVS projects that on average over the next 5 years, taking into consideration the proposed transitional rate relief scheme and inflation, business rates bills across Richmond Upon Thames next year will be £14.1m per year higher than this year, resulting in a massive £70.5m tax hike across Richmond Upon Thames over the next 5 years.
Mark Rigby, CEO of CVS says: “The purpose of a business rates revaluation is to try and achieve fairness by ensuring that tax liabilities are based upon up-to-date values.
“Revaluations create winners and losers as tax liabilities are shifted in line with relative movements in property values since the previous revaluation.
“Across the 32 Boroughs of London and the City for all sectors, Rateable Values have risen by 24.04% on average yet Heathrow seems to have emerged as a major ‘winner’.”
Businesses facing increased rates bills are advised to seek professional advice as to whether they are paying the correct amount. The Government’s changes to the business rates appeals process means that there is now a three-stage process known as ‘Check. Challenge. Appeal.’ (CCA) for the property’s new assessment.
The CCA process is intended to manage the flow of cases through the system in a structured and transparent way, and each step must be fully completed in sequence to submit an Appeal.
Nearly three quarter of a million businesses in England and Wales challenged their last assessment with almost 1 in 3 receiving a rebate.
Mark Rigby added: “The by-election campaign will revolve around Heathrow Airport and its expansion. However, local businesses are now faced with massive tax increases next year with only 6 months to prepare for them.
“It’s a bitter sweet pill to swallow for businesses in Richmond Upon Thames knowing that their property values have increased and will effectively subsidise Heathrow’s tax savings.
“It is essential that businesses across Richmond Upon Thames consider a thorough check of their new tax assessment as there may well be scope for an appeal.”
Heathrow is top business rate payer in England and Wales
13 October 2016 (BBC)
London’s Heathrow airport will continue to pay the highest rate bill of any business in England and Wales when new rateable values are applied in 2017.
The airport’s annual bill will be £118m, according to calculations by the property surveyors CVS.
The firm’s list of the top 50 rate payers is dominated by airports, power stations and London head offices.
Harrods and Selfridges both appear in the top 10, paying £18m and £16m respectively each year.
The new rateable values for tens of thousands of businesses in England and Wales were announced in September, following the first revaluation since 2008.
What are rateable values?
The rates are a form of business tax, based broadly on the rentable value of the property in question.
Once the rateable value is established, a “multiplier” set down by the government is applied to calculate the actual amount to be paid each year.
In some parts of the country where property values have fallen, so have rateable values and thus the business rates to be paid.
But in London and the South East property has become much more expensive and so business rate bills will rise for many businesses there next year.
CVS said the rateable values of the top 50 properties, calculated as of 1 April 2015, had risen by £98m since the previous rateable values were decided in 2008.
This meant, said Mark Rigby of CVS, that the owners of these properties would pay an extra £400m over the five-year life of the new rateable valuations.
“The new Rating List shows that the big infrastructure sites – such as airports, power stations and railway infrastructure – are still dominant as the properties with the highest rateable value in the country,” said Mr Rigby.
“The offices of Bank of America Merrill Lynch in the heart of the City of London have seen their rateable value rise by more than 70% to £17m, while retailers Harrods, John Lewis and Selfridges have all seen increases of more than 50%.
“At £35m, Harrods is the retail property with the highest rateable value – 7th overall – while HSBC’s offices at Canada Square in Canary Wharf are the highest valued office at over £26m,” he added.
But most of the big rate payers will indeed pay more.
Gatwick airport will stay as the second biggest payer at £30m per year, and Sizewell nuclear power station will pay nearly £24m.
Others in the top 10 are Heathrow airport’s engineering base, Heysham 2 power station in Lancashire, Harrods, the Channel Tunnel, Selfridges, and Vodafone’s fibre optic network, based at offices in Berkshire.
The Channel Tunnel’s bill will rise by 114% to £16.4m, while Hinkley nuclear power station will pay 198% more at £11.8m a year.
The BBC will pay £13.4m on its New Broadcasting House headquarters in central London, up from £9.5m this year.
The bosses of Berlin’s new Brandenburg airport have been criticised for offering bonuses to the companies building the long-delayed and over-budget project. Construction companies were being offered financial incentives to speed up their work on the building so that it can be opened by the end of 2017. They will only be paid if work is finished by July 2017. The potential bonuses may add up to around €10 million. Each construction company could receive around €1 million. Berlin Brandenburg airport was meant to open in 2011, but costs have risen from an original projection of €2.5 billion to €6.4 billion. The project has had a catalogue of very serious problems, involving partial rebuilding. A key problem was the fire detection systems, which did not meet national fire safety standards There has also been scandal, and corruption. The plans for bonuses have been criticised by members of the Berlin Senate and on social media, news of the bonuses was met with ridicule. Some consider it is more likely the airport would only be ready in 2018.
Firms behind Berlin airport offered million-euro bonuses
The bosses of Berlin’s new international airport have been criticized for offering bonuses to the companies building the long-delayed and over-budget project.
Karsten Mühlenfeld, the head of the state-owned company responsible for Berlin Brandenburg Airport (BER), told Bild am Sonntag that construction companies were being offered financial incentives to speed up their work on the building so that it can be opened by the end of 2017.
According to Tagesspiegel, the potential bonuses add up to around €10 million. Each construction company could receive around €1 million.
Costs for BER, which was supposed to open in 2011, have skyrocketed from an original projection of €2.5 billion to €6.4 billion.
The bonuses will only be paid if the passenger terminal is ready by July 2017.
News that companies which have participated in a project dogged by scandal, corruption and delays could receive such bonuses met with immediate criticism from members of the Berlin Senate.
“I have a few questions for the airport hierarchy that I won’t be saying in public,” said Berlin finance minister Christian Görke of Die Linke (The Left Party).
Berlin authorities have pledged that the airport will open in 2017, six years behind schedule. A major cause of the delay has been problems with fire detection systems which did not meet national fire safety standards.
An internal report seen by Bild earlier in the year suggests that the airport is unlikely to open before 2019, with work currently crawling along at a snail’s pace.
One former project planner for the airport has even suggested that the airport will never open due to complications involved in rebuilding its fire safety systems.
On social media, news of the bonuses was met with ridicule.
“Airport: ‘The building should have been ready in 2012’. Builders: ‘But, fire safety…’ Airport: ‘And if we give a bonus?’ Builders: ‘Done!'”
According to internal information, the terms of the contract are such that it is only paid if the passenger terminal is ready in July 2017 and released for use. And the airport has not managed in the last year, basically all the self-imposed deadlines, delays never caught up. Recently, the last planning application had been submitted so late in the building control office of the circle Dahme-Spreewald. A start before the spring of 2018, according to the daily mirror research, therefore, unrealistic.
Below are some earlier stories about Berlin Brandenburg airport:
News about Berlin Brandenburg Airport
EU clears massive €2.2bn investment package by German government to complete Berlin Brandenburg airport
August 4, 2016
The European Commission has approved financial support for Berlin’s long-delayed airport project, deciding that German government funding aimed at completing the facility is in line with EU state aid rules. The EU said the planned investment is “made on market terms and will thus involve no state aid to airport operator FBB.” FBB is co-owned by the Berlin city authority, the surrounding region of Brandenburg and the German federal government. In January 2016, Germany notified plans by the airport’s public shareholders to grant a €1.1 billion shareholder loan and a shareholder guarantee covering additional debt financing of up to €1.1 billion to FBB. The financing to be covered by the shareholder guarantee will be provided by commercial banks. Part of the investment is to address technical issues (for example, with the fire protection system), and to enhance noise protection. The rest will be used to increase capacity, as traffic growth will exceed the previous forecasts on which the initial project was based. Interventions by public authorities in companies can be considered free of state aid when they are carried out at conditions that a private investor would have accepted (according to the so-called “market economy investor principle” – even if no private investor had considered the investment attractive. The airport was initially meant to open in 2011 but has had a succession of show-stopping problems.
Speculation that Berlin Brandenburg might never open, as its problems are so expensive
April 28, 2016
The man in charge of planning Berlin’s Brandenburg airport, which has had a catalogue of major problems, says it now may never open. It might be pulled down. It was meant to open in 2010, but had real problems with the fire extinguisher system, which did not work. Every year, the date of possible opening is pushed further back. Now it seems the myth of German national efficiency is under threat. The airport is already £5 billion over budget and a national disgrace for a country that prides itself on technical excellence. The chief planner, until 1999, doubted if it would ever open. After the fire issue, which required the removal of hundreds of defective firewalls, there were also hundreds of miles of wiring that had to be ripped out of leaking underground conduits. The luggage relay systems did not work, and the computer system was so complex that for years nobody could work out how to turn off the lights. They blazed 24/7. Every month, the delay costs about £15 million, including cleaning costs and lighting to prevent vandalism. The Times says the airport’s PR chief “who, rather too truthfully, told journalists that claims of the project going well were “bullshit”.” If it does ever open (2018, 2019?) it will already be too small, and another runway may be added ….
Berlin Brandenburg airport problem of terminal ceiling being too heavy ….. already years late, hugely over budget
October 1, 2015
Berlin’s long-delayed Brandenburg airport has suffered another setback after structural flaws were found in the terminal roof. It appears that the ceiling in the terminal building is too heavy. The airport, which was originally due to open in 2010, is still under construction and has run billions of Euros over budget. It was expected to open in 2017 but that could be postponed even further. The local building authority said it had told the construction firm to “immediately stop building works for the area underneath the entire terminal roof of the BER airport” until security checks could be carried out by engineers. The airport’s CEO has left the company. Earlier this year Air Berlin, which is currently running at a loss, reached a settlement with the airport over the delays as it had planned on making BER its main hub airport. The first problems noted were to do with the smoke and fire detection problem. The proposed solution, (which was not surprisingly rejected) was (paraphrased) for 800 low-paid workers armed with cell phones, sitting on camping stools, armed with thermos flasks, who would take up positions throughout the terminal. If anyone smelled smoke or saw a fire, they would alert the airport fire station and direct passengers toward the exits” The airport’s cost, borne by taxpayers, has tripled to €5.4 billion.