Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The new Labour government has signalled it is “open-minded” about airport expansion so long as it meets various tests — including on climate — in a move that will open fresh speculation about the revival of Heathrow’s long-delayed third runway.
For nearly two decades the expansion of Heathrow has been a hugely fraught political issue as an emblem of the clash between economic growth and attempts to combat climate change.
Yet Labour is now forging a pragmatic approach to aviation under which airports will be able to expand their runways if they can meet four specific tests.
No runway expansion will be authorised unless it is compatible with meeting Britain’s climate targets, meets noise pollution and air pollution hurdles and provides economic growth across the country. “We are open-minded about any airport looking to expand,” said one senior Labour figure. “But it would have to pass those four tests.”
The new government believes the growth of a fledgling market in sustainable aviation fuel (SAF) could provide the key to a greener airline industry, despite it costing more than conventional jet fuel.
Last week’s King’s Speech included a SAF bill designed to provide subsidies to encourage the growth of that industry.
There is not currently any application by Heathrow to build a third runway on its west London site, a scheme that has been hugely controversial for many years.
Heathrow bosses remain convinced of the long-term need for a third runway at the UK’s only hub airport, but are far from outlining concrete proposals.
Chief executive Thomas Woldbye, who joined the airport in October, has instead prioritised smaller-scale expansion to increase the number of passengers the airport can handle.
The airport believes it can raise passenger numbers from 80mn to 100mn before it requires a new runway — although it thinks one will be needed in the long term.
In 2019 the airport set out plans for a £14bn megaproject, including demolishing local houses and moving the M25 motorway into a tunnel to build a new airstrip to the north-west of the current airfield.
It aimed to eventually raise passenger numbers to 142mn a year compared with 81mn in 2019.
This project is now being revisited. The total cost of building a third runway is expected to be far higher than in 2019 given the rise in costs of both construction and financing.
The airport is also in the midst of a change in ownership, after French buyout group Ardian and Saudi Arabia’s sovereign wealth fund agreed to buy a 38 per cent stake.
Labour’s new position will prompt consternation from environmental groups and local protesters, but could be well-received by some business groups.
Chancellor Rachel Reeves signalled in early July — just before the general election — that she was not opposed to Heathrow’s expansion.
“We would need to look at all the evidence at that, but I have nothing against expanding airport capacity. I want Heathrow to be that European hub for travel,” she told the Evening Standard newspaper.
“We would need to look at all the evidence including around the environment, but you know I back our airports. I back investing in infrastructure.”
It was more than 20 years ago that the last Labour government first produced a white paper proposing a third runway at Heathrow in 2003. Even then, however, ministers recognised the major hurdles in terms of potential noise and air pollution at a local level — let alone the implications for climate change.
Alistair Darling, the then transport secretary, thought the project could be built by 2020, but its progress was suffocated by political and climate concerns.
David Cameron’s Conservative party was opposed to the project before it won the general election in 2010 on environmental grounds. As prime minister, Cameron sought to give it the go-ahead, only to run into intractable opposition from his Liberal Democrat coalition partners.
Theresa May gave her backing to the project in 2016 only to cancel a vote on the issue because she feared a wave of ministerial resignations.
The project was dealt further blows by opposition from Boris Johnson, whose Uxbridge and South Ruislip constituency was close to Heathrow, and by global lockdowns during the Covid-19 pandemic, which restricted air travel.
Heathrow said: “We are actively reviewing our plans for longer-term growth as well, so Heathrow can continue to deliver for the UK economy, improve journeys for customers and meet our sustainability goals.”
Gatwick airport, the UK’s second-largest, has meanwhile submitted a planning proposal to expand its capacity by 60 per cent to 75mn passengers a year by late 2030s.
