CBI tested in spat over Heathrow runway

5.5.2009   (Financial Times)

By Jim Pickard, Political Correspondent

The CBI is facing a stern test of its authority as the main voice of business
after its supportive stance on Heathrow’s expansion was undermined by a band of
prominent executives.

Ministers have claimed for months that the scheme has the solid support of business
groups such as the British Chambers of Commerce, CBI and London First.

But cracks in that unified front have appeared after a letter calling for a halt
to the third runway – in favour of more high-speed rail – was signed by 13 business
leaders. They include James Murdoch, head of News Corporation in Europe and Asia,
Justin King, chief executive of J Sainsbury and Ian Cheshire, chief executive
of Kingfisher.

The emergence of the split will be a serious test for Richard Lambert, head of
the CBI, not least because he has sought to burnish the group’s green credentials.

One business lobbyist told the Financial Times on Monday that support among CBI
members for Heathrow’s expansion was not rock solid outside the south-east.   The
letter was also signed by two of Tony Blair’s close friends, Charles Dunstone,
founder of Carphone Warehouse, and Russell Chambers, a senior banker at Credit
Suisse. Mr Blair has maintained a studied silence about the controversial third
runway in recent months.

Other signatories include business figures with links to the Conservative party,
which has vowed to cancel Heathrow’s expansion if it forms the next government.

Colin Matthews, chief executive of Spanish-owned BAA, which controls most of
Britain’s airports, will defend the scheme on Tuesday at the airport group’s presentation
of its first-quarter results.

Mr Matthews is likely to point to a much larger list of 100 companies that have
backed the proposals, ranging from AstraZeneca to Rio Tinto and Thomson Reuters.

BAA claimed on Monday a "significant proportion of the UK business community"
stood behind it.

Environmentalists have questioned claims by Geoff Hoon, transport secretary,
that the airport will meet environmental standards.

Ministers say Heathrow is at full capacity and desperately needs the runway.
One Whitehall source said on Monday it was hypocritical of the business leaders
to criticise the project. "My question would be, how often have they been on a
plane in the last year?" he said.

But the 13 executives behind the Heathrow letter argued that "the benefits to
business are unclear and unproven" and there could be a damaging impact on the

They urged ministers to abandon the expansion and instead concentrate on high-speed
rail services – a policy espoused by the Conservatives.   One signatory, Jon Moulton
of Alchemy, has given the Tories £125,000 and £150,000 to Liam Fox, shadow defence
secretary, according to the Electoral Commission database.     Another, Howard Leigh,
is a director of Cavendish Corporate Finance, which has given £67,220 to the party.

The group also includes Lord Young of Graffham, a former Tory minister, while
Mr Dunstone is on the Conservatives’ "Creative Industries Review". But one signatory
said it was nonsense to suggest that the group had a Tory tinge: "This is nothing
to do with party politics, you won’t find a broader church."

David Levin, head of United Business Media, Ian Cheshire, chief executive of
Kingfisher and Mr King of Sainsbury’s all keep their political views to themselves
– although Mr King is advising Tory mayor Boris Johnson on the Olympic Games.

Mr Chambers, who orchestrated the letter, is known as "Tony Blair’s favourite
banker" and has holidayed with the former premier.

The CBI insisted on Monday that its support for the expansion reflected the views
of "the majority" of the business world.




see also



“We can have air travel in a low-carbon age” – says BAA chairman

News Item added: 5th May 2009

Nigel Rudd says the aviation industry can work effectively at the heart of a
global low-carbon economy. Somehow we can have expanded aviation and lower emissions.
He hopes that, as long as we start now and let a third Heathrow runway be built,
the industry will somehow find ways to cut emissions by 35-45% by 2025, as long
as we use enough technology. We have to we to stimulate economic growth to underwrite
the investments in technology. etc etc. (Times)


BAA flyers tumble as debt costs quadruple

News Item added: 5th May 2009

The full cost of BAA’s debt shows its interest payments had soared to £327 million
in the first quarter. BAA revealed that passenger numbers fell by 10% in the 3
months to March 31. They blamed the recession, the worst weather since 1991, the
late Easter and the leap year for the slump. BAA said the big jump in debt interest
payments was due to a £140 million loss on financial instruments, and paying average
of 6.33% interest on its debt. (Times)


Business can do without a Heathrow third runway – letter from 13 business leaders

News Item added: 4th May 2009

A letter to the Times, signed by 13 top business leaders including Ian Cheshire
(Chief Executive, Kingfisher), Russell Chambers (Adviser, Credit Suisse), Jon
Moulton (Founder, Alchemy Partners) says it is a misconception that the business
community support the Government rationale for a 3rd runway at Heathrow. They
say the business benefits are unclear and unproven, and there is little benefit
from increased reliance on transfer passengers. (Times)