Tories to block third runway at Heathrow

David Cameron paved the way for a Conservative government to block a third runway
at Heathrow in a landmark speech on the environment on Monday that threatened
to open a rift with business.

Ministers have strongly backed the business argument that Heathrow needs to expand
to maintain the UK’s competitiveness. But plans for a third runway are facing
mounting opposition from residents’ and environmental groups, backed by some local
authorities.

Mr Cameron came down firmly on the environmental side of the dispute over Heathrow
in a speech in London on Monday, while leaving a small amount of wiggle room for
a later endorsement of expansion.

Lambasting Gordon Brown for "pig-headedly pursuing a third runway just to try
and prove a political point", Mr Cameron stated: "The most important priority
for Heathrow is making it better, not bigger." The "fiasco" at Terminal 5 meant
there "must be severe doubt" over the ability of the government and BAA, Heathrow’s
owner, to manage the expansion, Mr Cameron said.

The Tory leader rejected the business argument that there was a strong economic
case for a third runway. "There are now increasing grounds to believe that the
economic case is flawed, even without addressing the serious environmental concerns,"
Mr Cameron stated.

Business reacted with concern to the Tory stance. "If we don’t continue to expand
[airport capacity] to meet rising demand, we’re going to lose out as UK plc,"
David Frost, director-general of the British Chambers of Commerce, told the Financial
Times.

The CBI said Mr Cameron’s speech failed to offer "an answer to what you do with
an airport that’s at 99 per cent capacity". John Cridland, CBI deputy director-general,
said the employers’ body agreed with Mr Cameron’s argument that urgent environmental
action was needed, despite the economic downturn. But he questioned the Tory policy
of ring-fencing all the revenues from higher green taxes for tax relief for families.

"I’m not sure the business community will accept that every single penny raised
in green taxes should help families," Mr Cridland told the FT.

The CBI also expressed concern about the proposal set out in Mr Cameron’s speech
to require the next generation of coal-fired power stations, including Eon’s proposed
£1.5bn ($2.9bn) new plant at Kingsnorth, Kent, to incorporate carbon capture storage
technology.

Mr Cameron’s sceptical stance on the expansion of Heathrow will sound alarm bells
at both British Airways, which has its global hub at the airport, and at BAA,
which has been leading the campaign to build a third runway.

According to BAA, the need for new runway capacity is "urgent" to avoid increasing
delays and to maintain Heathrow’s position as a global hub airport.

The government is due to publish the results of its recently completed three-month
public consultation on the Heathrow expansion plans later this year, which could
increase takeoff and landing capacity at Europe’s most congested airport by 50
per cent by 2030.

The Sustainable Development Commission, the government’s own environmental watchdog,
said last month that the proposed expansion should be put on hold. It was immediately
rebuffed by the transport department, which said deferring a decision for a further
three-year debate was "not a serious option".