Report says third Heathrow runway would add £30bn to UK economy

Building a third runway at Heathrow would add £30 billion to the UK economy, according to a new study by the British Chambers of Commerce (BCC).

The report claims that a third runway would deliver between £8.6bn and £12.8bn in increased productivity, and around £20bn in wider economic benefits, such as higher levels of employment.

It says some 60% of this benefit is predicted to be outside London and the South East.

Entitled Economic Impacts of Hub Airports, the research was conducted by leading economics and transport consultancy Colin Buchanan on behalf of the BCC.

It reveals that each year the building of a third runway is delayed the country loses between £900m and £1.1bn.

By reducing delays and increasing the frequency of flights, a third runway would save business passengers time and increase their productivity, it argues.

It says passengers would also benefit from flights to new destinations, removing the need to wait for transfers at airports outside the UK.

The wider economic benefits include direct and indirect increases in employment and gains to London as an international business location adding to its ability to recruit highly skilled people from around the world.

The £20bn of wider economic benefits over 60 years would be in addition to the £3.8bn forecast to arise from the High Speed 1 rail line (the Eurostar line) and the £10bn estimated for high speed rail (High Speed 2) from London to the North of England.

The study says over the last 20 years, Heathrow has fallen from being the leading airport in Europe by destinations served to fifth place.

Meanwhile, the number of UK regional cities it serves has fallen from 21 to six, so that UK passengers are now effectively subsidising hubs in Continental Europe.

The airport has also been left behind by its rivals in serving the growing BRIC economies of Brazil, Russia, India and China.

David Frost, director general of British Chambers of Commerce, said: “This comprehensive study clearly outlines the economic benefits of expanding Heathrow – an important part of the debate which too few people fully understand.

“Connectivity is vital to the UK economy as businesses seek to develop new global opportunities that will allow them to generate wealth and jobs. Without additional capacity at our major hub airport, we will continue to fall behind our Continental competitors.

“The age old phrase ‘time is money’ is apt as we look for solutions going forward. We must invest now to safeguard our economic future or we risk wasting £30 billion fumbling around for an alternative.”

By Bev Fearis