It said that more environmental assessment work was needed to be sure of a right decision, although it does at least accept that it has to make a decision.
The new studies will take until summer 2017 to complete. No timetable has been given for when a decision might actually be taken – another year from now looks the earliest possibility.
Reaction from business interests to the delay has been overwhelmingly negative – the inability to make a decision will damage the economic prospects of the entire UK, many suggest.
Transport secretary Patrick McLoughlin said: “The case for aviation expansion is clear – but it’s vitally important we get the decision right so that it will benefit generations to come. We will undertake more work on environmental impacts, including air quality, noise and carbon.
“We must develop the best possible package of measures to mitigate the impacts on local people. We will continue work on all the shortlisted locations, so that the timetable for more capacity set out by Sir Howard is met.”
Three years ago it avoided making a decision by setting up an independent Airports Commission to make the decision for it. In July 2015 the commission’s final report was submitted to government recommending the construction of a third runway at Heathrow, at an estimated cost of £18.6bn. [See our previous report here.] This was in preference to a second runway at Gatwick. Proposals for a whole new airport in the Thames or Medway estuary were ruled out at an earlier stage.
When it received the report, which had cost £20m to put together, the government said that it would make its decision by the end of 2015.
However, resorting to an independent panel of experts has completely failed to resolve the arguments [are you reading, Andrew Adonis and John Armitt?] and the government, it appears is no bolder about making a decision.
With numerous high profile Conservative MPs lined up against Heathrow expansion, including London Mayor Boris Johnson and mayoral candidate Zac Goldsmith, the Airport Commission’s rationality failed to achieve any kind of political consensus.
The government’s reluctance to take the fight to opponents of Heathrow expansion provoked disappointment and derision
CBI director-general Carolyn Fairbairn said: “Delaying this decision on an issue of critical importance to the future prosperity of the UK is deeply disappointing. We urgently need to increase our runway capacity to spur trade growth, investment and job creation. Just eight new routes to emerging markets could boost our exports by up to £1 billion a year.
“But by 2025 – the earliest a new runway would be built – London’s airports could already be operating at full capacity and the longer we wait the further we fall behind the likes of Amsterdam and Paris. If we don’t have a new runway up and running by 2030 the cost to the UK will be as much as £5.3 billion a year in lost trade to the BRICs alone.
“It is of course essential that environmental conditions are met. But the Airports Commission spent three years analysing impartial evidence, at a cost of £20 million, and the National Infrastructure Commission was set up just two months ago to take an evidence-based approach to our needs. We cannot fall into the habit of simply commissioning new evidence, instead of the government taking the tough decisions needed at the end of the process.”
Alasdair Reisner, chief executive of the Civil Engineering Contractors Association (CECA), whose members are looking forward to a workload bonanza from the project, said: “This is extremely disappointing news. The UK economy loses nearly £1.2 billion a year because of a lack of major airport capacity. There is a pressing need for more airport capacity in the South East, and unless the congestion problem is addressed, the UK will become a less attractive place to do business with and to visit.
“Successive governments have dodged this issue for more than forty years. We call on the current government to commit to the implementation of the Davies Commission’s recommendations. To do so could signal a step-change in long-term infrastructure planning, to the long-term benefit of the British economy and the UK taxpayer.”
The Freight Transport Association said that the continuing delay on a decision would damage the UK’s international reputation and discourage investment from overseas. Policy director Chris Welsh said: “Approximately 40% of Britain’s imports and exports are dependent on air freight. The UK’s ability to access existing and new markets is in danger of being seriously impaired by a failure to invest in Britain’s core infrastructure capacity.
“Worse still, as the government dithers, is the damage done to our international reputation and the signal it sends overseas investors who are likely to question the UK’s capability to invest in vital infrastructure required to maintain and enhance the UK’s connectivity. Organisations such as OECD and the World Bank have highlighted that government interventions on infrastructure investment are essential in attaining good connectivity and efficient logistics and are vital components in a nation’s ability to compete in the global economy.”
Other noted that political indecision was hampering the ability of businesses to make their own plans.
“This uncertainty is making it almost impossible for businesses at both Heathrow and Gatwick to plan ahead,” said Matthew Samuel-Camps, chief executive of property consultant Vail Williams.
“Whichever location is eventually chosen to expand, for many companies it will come as a relief simply because at long last they will be able to start planning for the future with more confidence. This dithering leaves a huge variety of issues in the air, including business rates, infrastructure developments, property and land values, and of course the matter of where there will be forced relocations.
“Our expert teams from both regions know of deals worth millions of pounds which have stalled while waiting for a judgement. This may get even worse as investors and companies despair at a decision ever being made.”
He added: “It’s such a frustrating situation because the opportunities that would finally be unlocked are huge – whatever the result. This is an important decision but this delay now runs the risk of harming businesses. It must be settled soon.”
Aecom chief executive Richard Robinson said: “Business needed an unequivocal green light from government. Instead, after much dithering, delay and inaction, industry has been hit with yet another deferred decision, further numbing the pace of progress. Short-term political gain has taken precedence over what is right for the country. This is no way to plan critical infrastructure of national importance.
“Years of political procrastination have impeded many firms’ ability to plan for their future in the UK. The country is already lagging behind global rivals with nearly double our aviation capacity and far more nimble mechanisms for delivering new infrastructure. Further postponement could cripple the country’s competitiveness.”
However, one person who is happy about the delay is Gatwick Airport chief executive Stewart Wingate, who hopes that political momentum might now swing back towards expansion at his airport instead of Heathrow.
“We are glad that the government recognises that more work on environmental impact needs to be done,” he said. “Air quality, for example, is a public health priority and obviously the legal safeguards around it cannot be wished away.
“Even Heathrow’s most vocal supporters must now realise a third runway at Heathrow will never take off as the environmental hurdles are just too high. If they want Britain to have the benefits of expansion and competition they should now look to Gatwick.
“Expansion has been in a holding pattern for decades. Momentum is now behind Gatwick as it becomes ever clearer that it is the obvious solution. We will continue to work closely with government to take forward our plan which is legal, affordable, and can actually deliver for Britain.”