Claims that Heathrow runway delay “costs UK £6 million per day” shown to be massively exaggerated

Claims have been made about how important it is for the government to make a runway decision fast, and how massive amounts of money are being (allegedly !) lost to the UK economy every single day of delay.  A new grouping – the “British Infrastructure Group” – BIG – led by Tory MP Grant Shapps suggests the sum is “up to £6 million per day”.  Full Fact has looked into this, and how the claims are calculated, and they find them to be very dodgy indeed. It’s complicated economics, but at heart they looked at the  possible maximum benefits that the Airports Commission said a Heathrow might generate, over 60 YEARS. Then they worked out that, backwards, to a sum per day.  There are various assumptions that should, and should not, be made when working out that sort of calculation and assessing possible future values. Their sum of “£6 million per day” depends on Heathrow producing a national benefit of £147 billion over 60 years. But the Airports Commission’s own figures show that if the costs of carbon in the carbon capped scenarios reduce the possible national benefit of a Heathrow runway to around (amazingly tiny) just £1.4 billion over 60 years.  That, divided up by day, is an insignificant amount (up to £64,000).  Full Fact says: “Any precise figure will be uncertain.”



Does delaying airport expansion cost us £6 million a day?

In brief  – from Full Fact, the UK’s independent fact checking charity.


“Delaying a decision about which runway to build costs the UK economy £6 million every day.”


Whether or not you agree that a delay in the decision is imposing unnecessary costs on the UK economy, this probably isn’t the best estimate of what those costs are. Any precise figure will be uncertain.

An article making this claim:

“Delay over Heathrow third runway decision costing UK up to £6m a day, say MPs”

Get West London, 24 July 2016   (copied below)

Present Value

The idea behind this kind of assessment is to suggest how much all the future benefits from an investment project are worth at the time of the decision. Benefits that come further away in the future are treated as if they’re worth less. The point is to decide, in financial terms, which project gives the most benefit for the smallest investment.

The report suggested that the future benefits over 60 years from a new runway at Gatwick were worth £89 billion to us at present, an extended runway at Heathrow was worth more at £131 billion and a new northwest runway at Heathrow was worth the most, at £147 billion. This was one of the reasons why the report favoured a new runway at Heathrow.  [In fact the Airports Commission’s own economic advisors were very sceptical about this level of economic benefit, and warned against such a high figure. See Link  AW note ]

A peer review of the findings, also commissioned by the Airport Commission, emphasised the difficulties in predicting the impact of a new runway on the UK economy, and cautioned against attaching ‘significant weight’ to the report’s final figures

Running Costs

The British Infrastructure Group, a cross-party group of MPs, has taken the Airport Commission’s valuations and used them for a different purpose.

They’ve divided each figure up to suggest a ‘lost value for each day’s delay’ on a decision about which project to choose. So between £2 million and £4 million ‘cost per day’ for a new runway at Gatwick, £5 million and £6 million for a runway extension at Heathrow, and £6 million and £7 million for a new runway at Heathrow.

Missed opportunities

The figures suggested by the British Infrastructure Group aren’t so much ‘costs’. This isn’t money that has to be paid every day until a decision is made.

They’re based on predictions which include all the opportunities the UK could miss out on in the future if it doesn’t have a new runway, and judgments about what those missed opportunities will be worth.

So it’s better to treat the estimates as judgements caveated with a reasonable degree of uncertainty, rather than facts.

Missed costs

By focusing only on the economic benefits, the British Infrastructure Group has also ignored the predicted costs of each airport expansion proposal.

When these are factored in, the Airport Commission suggests that the overall social benefit balances out to between about £5.5 billion and £10.8 billion for a new runway at Gatwick, depending on how strictly carbon emissions are controlled. They suggest a net benefit of between £1 billion and £10.2 billion for an extended runway at Heathrow and between £1.4 billion £11.8 billion for a new runway at Heathrow. So it suggests the net benefits from expanding Heathrow would be more sensitive to how carbon emissions are controlled than expanding Gatwick.

Arguably, these bottom-line figures don’t give the full picture either.

First, looking at the net benefit to the economy overall won’t tell you who wins and who loses.  For example, the report suggests that passengers would enjoy cheaper travel and a better service if any of the projects went ahead, whilst aviation businesses would suffer lower profits. Particular places or industries would also do better or worse from each proposal.

Second, a range of opponents of the third runway at Heathrow have questioned whether certain negative consequences had been given enough consideration, such as environmental costs, noise pollution and public health concerns.

Getting technical…

Arguably, the report is using the Airport Commission’s original estimates in a way they aren’t meant to be used anyway.

The Commission gave a figure for the present value of each investment. This is a way to compare options – to make a judgement about all the benefits that will stem from an investment and sum up what those future benefits are worth to us right now, at the time of the decision. The British Infrastructure Group have treated the same valuations as if they show the value added to the UK economy by each investment, which isn’t the same thing.

Dividing up present value calculations may not give you a good idea of the costs that come from putting off an investment project. To start with, the value assigned to benefits in the far future are reduced down in present value calculations. If the British Infrastructure Group had used figures for the value added by each project as their starting point, they might actually have suggested a higher number.

This still might not have been a very good estimate for the cost of delay. Investment projects often have one-off benefits that won’t be reduced by a year’s delay, as the British Infrastructure Group acknowledges. Delaying building-work also delays the costs of future repair-work – a runway built one year later, for example, might be expected to last one year longer. The strategic benefits of increasing capacity ahead of the UK’s rivals may matter more, but these considerations aren’t included in the figures.

Six possibilities

Because there are three possible projects, there are three starting points for suggesting how much a new runway is worth to us right now.

The Airport Commission has said that it also depends on whether the UK tries to meet its carbon emissions targets by strict ‘carbon-capping’ or more flexible ‘carbon-trading’ systems, which they think would restrict the growth of businesses less.

That means there are at least six alternative suggestions for how much the future benefits from a new runway are worth to us right now, looking forward over 60 years. These are considerably reduced if we factor in the costs as well.

Airport Commission Present Value estimates

You can’t account for everything

The estimates don’t account for every effect that comes from building a new runway. For example, the Airport Commission didn’t factor in how construction work on the runways will affect GDP, because they think it’s too hard to judge how much investment spending will be drawn away from other places in the economy, or exactly how the aviation industry will grow.

The British Infrastructure Group agreed that you could debate the costs of a delayed decision up or down, depending on which factors you considered.

The Airport Commission’s peer reviewers concluded that although the report was useful for considering the strategic reasons behind airport expansion, it shouldn’tbe assumed that the final figures for the economic impact are reliable.

No decision has been made

The Airport Commission recommended the Heathrow Airport northwest runway proposal as the best option, although this wasn’t an uncontroversial decision.

The government has said that the decision will now need to be reviewed in light of the EU referendum result and that they will continue looking at the different options.


This article was updated on 8 August 2015 to incorporate a discussion about the Airport Commission’s suggestions for the net present value of each project, and a note from the Commission’s expert advisors on the findings.

We aim for our factchecks to be as accurate and up-to-date as possible. If you think we’ve made an error or missed some relevant information, please



In their report for the Airports Commission, two of the economic advisors,

A Note from Expert Advisors, Prof. Peter Mackie and Mr Brian Pearce, on key issues considering the Airports Commission Economic Case

May 2015 

they concluded:
This is one of the most ambitious attempts to prepare a quantified Economic Impact Assessment. There are few comparators available. While the content of the model itself has been well-tested, the same cannot be said of the front end, where an increase in capacity is converted into an increase in trip-making, trade, tourism and finally productivity. Furthermore the interpretation of the result— what exactly do they mean and is their basis transparent— is an issue. Overall, therefore, we counsel caution in attaching significant weight either to the absolute or relative results of the GDP/GVA SCGE approach (PwC report) within the Economic Case. We would accept that there is some useful indicative material for the Strategic Case but care is required in assessing its robustness and reliability.”

See earlier:

Delay over Heathrow third runway decision costing UK up to £6m a day, say MPs

24 JULY 2016
BY ROBERT CUMBER   (Get West London)Theresa May urged to show her ‘mettle’ and end speculation over airport expansion ‘immediately’MPs from across the political divide have demanded an “urgent” decision on whether to expand Heathrow or Gatwick airport.The delay in making a decision over where to build a new runway is costing the UK up to £6m a day, a report by a cross-party Commons body claims.The British Infrastructure Group (BIG), headed by Conservative MP Grant Shapps, urged new prime minister Theresa May to show her “mettle” by ending the speculation.  [BIG seems to be a bit of a one-man band.  No website. No membership?  Its only web presence is Grant Shapps own website. report entitled Gate Now Closing , which was published on Sunday (July 24), calls for an “urgent and immediate decision on hub airport expansion”.

The report does not state where group thinks a new runway should be built, but it argues that the indecision is having a deleterious effect on Britain’s businesses, the economy and jobs.

‘Problem of capacity… causing substantial damage’
“The problem of capacity at the current hub, Heathrow, is causing substantial damage to the industry as a whole,” the report says.

“It erodes confidence in the Government’s stated ambition of growing the economy and our international trade.

This computer-generated image shows how a third runway at Heathrow would look
“The evidence has been gathered by the Airports Commission. Now a decision is needed, to show the new leadership’s mettle.”

The Airports Commission last summer recommended building a third runway at Heathrow over a second landing strip at Gatwick.

The Government’s decision was initially delayed last year when further environmental studies were commissioned , and then in June following the outcome of the EU referendum.

The Department for Transport has not indicated when a decision is likely, following Chris Grayling’s appointment as the new transport secretary.

Theresa May’s election as prime minister, and the appointment to her cabinet of a number of Heathrow opponents , saw one bookmaker slash the odds on Gatwick winning the battle for a new runway.

Heathrow recently unveiled new images and video footage showing how an expanded airport would look , which it said showed it was ready to begin work as soon as it got the go-ahead.


Grant Shapps’ BIG report

Download the Gate Now Closingreporthere:


Gate Now Closing report The report’s executive summary.

  1. Make an urgent and immediate decision on hub airport expansion. The problem of capacity at the current hub, Heathrow, is causing substantial damage to the industry as a whole. It erodes confidence in the Government’s stated ambition of growing the economy and our international trade. The evidence has been gathered by the Airport Commission. Now a decision is needed, to show the new leadership’s mettle.
  2. Expand our regional airports. Demand for flights is soaring and regional airports have begun to offer credible long-haul services. For the sake of UK PLC, regional airports must be allowed to expand. Only their expansion can address the coming ‘capacity crunch’ and deliver sustained growth, underlining the concepts of the Northern Powerhouse and the Midlands Engine and sharing the proceeds of growth across Britain.
  3. Progressively Lower Airport Passenger Duty (APD). Britain’s major aviation tax, APD is many times the rate of similar taxes in European competitors and trading partners such as the USA. APD hinders exports, distorts the market, and hits small carriers hard. BIG believes that a lowered rate, by boosting the wider economy, would eventually be cost-neutral for the Treasury. Bringing forward hub airport expansion could allay the cost in the interim – around a third of APD could be waived with the proceeds of bringing construction forward a year.
  4. Join up infrastructure to regional airports. Even airports as large as Bristol and Luton suffer from congested roads and delay-prone rail links. Planning improvements should be a priority of the National Infrastructure Commission (NIC).
  5. Make regulation small-airport-friendly. Existing regulation is often suited to large airports. Smaller airports cannot enjoy the same economies of scale. We should lower the burden by giving the main regulator, the Civil Aviation Authority (CAA), a ‘regional connectivity’ brief.
  6. Improve funding for local start-up routes. The Government uses Public Service Obligations (PSOs) fund outlying routes; they could form a more coherent network in outlying areas.  The Government uses the Regional Air Connectivity Fund (RACF) to pay start-up costs for new, commercially viable routes; this fund needs more streamlined, airport-friendly management.
  7. Fast-track enterprise zone development around airports. In a competitive industry, airports rely on commercial activity around them to support their services. Enterprise zones should be fast-tracked through the planning system.


The report has the support of over 40 cross-party MPs:

  1. Gavin Robinson
  2. Adrian Bailey
  3. Maria Caulfield
  4. Oliver Colville
  5. Angela Watkinson
  6. Laurence Robertson
  7. Catherine McKinnell
  8. Greg Knight
  9. Nigel Evans
  10. Graham Brady
  11. Mary Glindon
  12. Gerald Howarth
  13. Andrew Rosindell
  14. Philip Davies
  15. Bob Neill
  16. Caroline Spelman
  17. James Davies
  18. Kevin Hollinrake
  19. Pauline Latham
  20. Karen Lumley
  21. Mike Wood
  22. Daniel Poulter
  23. Ben Howlett
  24. Jonathan Djanogly
  25. Nigel Huddleston
  26. Crispin Blunt
  27. Justin Tomlinson
  28. Anne-Marie Morris
  29. Cheryl Gillan
  30. Scott Mann
  31. Alex Shelbrook
  32. David Warburton
  33. Derek Thomas
  34. Nigel Mills
  35. Nick Boles
  36. Henry Bellingham
  37. Charlie Elphicke
  38. Richard Drax
  39. Andrew Bingham
  40. Mike Kane
  41. Hugo Squire
  42. Grant Shapps


Airport runway delay ‘could cost UK £5bn’

‘We need this decision on airport capacity to be taken quickly. It is urgent and not optional’

Russell Lynch   (Independent)

Tuesday 8 December 2015

Delaying the hugely controversial decision on expansion of UK airport capacity could cost the economy more than £5bn, the head of the Confederation of British Industry (CBI) warned.

The business lobby group’s new director-general, Carolyn Fairbairn, accused the Government of “a real failure of leadership” because ministers are poised to postpone their decision on airport growth – which was originally due by the end of this year – for at least six months.

The Airports Commission, led by Sir Howard Davies, said in July that it preferred a plan for a new runway at Heathrow over the extension of Heathrow’s existing northern runway, or building a second runway at Gatwick.

But any decision to go with Heathrow will be a political embarrassment for David Cameron, who pledged before the 2010 election to oppose a third Heathrow runway with “no ifs, no buts”. It will also undermine the Conservative Zac Goldsmith’s bid to succeed Boris Johnson as Mayor of London next May. Mr Goldsmith, the MP for Richmond Park, has been a consistent opponent of Heathrow expansion.

The Government is also understood to be concerned by potential legal challenges about the environmental impact of a third runway at the west London airport, because pollution levels in the area already breach European safety limits. Ms Fairbairn said: “A failure to have new a new runway up and running by 2030 will cost the UK as much as £5.3bn a year in lost trade to the Bric countries [Brazil, Russia, India and China] alone.”

She told the BBC: “It feels like a real failure of leadership. We need this decision to be taken quickly. We really need a decision on airport capacity, it’s urgent and not optional.”

Her comments come after the CBI’s president, Paul Drechsler, urged ministers to “get on with it” and “not duck infrastructure decisions”.

Heathrow, which is running at full capacity, claims that a third runway would add £100bn to the economy and create 120,000 jobs.

The commission’s report on the new £23bn runway is calling for further night flight restrictions, a noise levy and a legal commitment to protect air quality.