Tory plan to scrap new runways at Heathrow and Stansted could cost billions

10.1.2009   (Guardian)

• BAA and contractors could demand compensation

• Labour faces battle over Heathrow and Stansted

by Dan Milmo, Transport Correspondent

A future Conservative government would use new legislative powers to block the
expansion of Heathrow and Stansted airports, which could leave taxpayers liable
for multibillion-pound compensation payments to the contractors and airport group

A decision on a third Heathrow runway could come next week, with the government
putting together a “complete package” of
transport measures aimed at easing ministerial and backbench unease.

The decision is likely to become a parliamentary battle of wills, as the Guardian
has learned that a Conservative government would use the government’s new legislative
powers to block extra runways at Heathrow and Stansted.

The long-awaited decision to intensify use of Heathrow has been bitterly opposed
by thousands of local residents, environmental campaigners and a cross-party coalition
of MPs concerned that it runs counter to climate change commitments and will make
it impossible for the UK to reach the target of an 80% reduction in carbon dioxide
emissions by 2050.

A decision was delayed last month after ministerial concerns at the potential
environmental impact.   The government is now working on a package of measures
described by one aide as “wider than those discussed so far”.

Last week Lord Adonis suggested an international rail interchange for Heathrow
was being given high priority for government spending. On Wednesday the transport
secretary, Geoff Hoon, met the prime minister to update him on progress but yesterday
a government source insisted no decision had been taken.

Such is their determination to ensure the plans do not go ahead that the Tories
are considering at least three options if they win the next general election:

• Rushing through a new aviation policy to block Heathrow expansion under the 2008
Planning Act;

• Enacting new legislation to halt Stansted’s growth;

• Paying off contractors and BAA to stop construction at Stansted.

It is understood a planning application for Heathrow will not be submitted until
2011, six months after the last possible date Gordon Brown can hold a general
election.   If
Labour lost, that would give the Tories enough time to draft a new aviation policy
ruling out a new runway.

The planning application for a third runway will be heard by the Infrastructure
Planning Commission (IPC), a body created under the 2008 Planning Act to fast-track
projects of national importance.

Under controversial guidelines for the IPC, government infrastructure policy
will carry enhanced importance when the commission considers whether to approve
schemes such as new runways.

Theresa Villiers, shadow transport secretary, said: “The Conservatives are against a third runway at Heathrow and a second runway at Stansted.   People
who want to stop these runways going ahead have a clear choice at the general
election.   If they don’t want these runways, they should vote Conservative.”

However, legal experts warned that the Conservative pledge to “cancel” all plans
to build a second runway at Stansted, the UK’s third largest airport, could cost
taxpayers billions of pounds in compensation.

The Tories have discussed the possibility of paying compensation to contractors
who have signed deals but not started heavy construction work. Villiers has warned
companies not to sign contracts but a government’s power to stop them striking
deals will diminish once planning permission is granted.

The planning inquiry for a new Stansted runway starts on 15 April and will be
the last big infrastructure proposal to be heard under the 1990 Town and Country
Planning Act.

The inquiry is expected to finish before mid-2010 and a Conservative government
will not be able to repeal a positive verdict without paying off contractors and
BAA, Stansted’s owner, for loss of earnings.

One legal source told the Guardian that the bill could run into billions of pounds
because BAA, having won the legal right to develop its land, could sue for the
profits it expected to make from a second runway.   “It is a property right that
has been granted, so you have to pay compensation if you revoke the planning permission.”

The source added that a Conservative government might have to introduce legislation
in order to revoke planning permission for Stansted, amid doubts that the 1990
act allows ministers to scrap a planning application approved by a previous government.
 It is understood that the Tories harbour private fears that a general election
victory might come too late to block a second runway, despite assertions from
Villiers yesterday that an election will come before the Stansted inquiry ends.