The chief executive of the London Chamber of Commerce and Industry calls on the government to take action now.
Imagine a sector of the UK economy that has the ability to grow its customer base from 2.1 million to 3.4 million over the next 20 years. A sector that will not only bring millions of visitors to our shores to spend money and invest in our economy but will also provide UK businesses with the means to export their goods and services to new markets. A sector that can fund its own expansion and build the infrastructure it needs without expecting anything from the public purse.
If such a sector existed you would imagine it would have the full backing of the government and that a comprehensive plan would already be in place to help aid its expansion. Particularly at a time when the most frequent and urgent question currently asked of the government is: where can growth opportunities be found in the UK economy?
More and more rounds of consultation are not going to dig up a golden solution that satisfies everyone’s interests
However, the UK’s aviation industry currently finds itself in the situation where it is desperate to grow but is being held back by a lack of political will to address the thorny issue of aviation expansion. As of last week, the government has conducted two phases of its so-called Growth Review, but aviation is being subjected to its own separate review.
It is expected that in March 2012 the government will publish the findings of this review, but we will then have to wait until at least March 2013 for a final policy to be agreed. Such a long period of uncertainty is simply too long and seriously risks doing permanent damage to the competitiveness of the UK economy.
Businesses are not naïve. They understand the political sensitivities that surround aviation expansion. In fact, given that the UK’s stable and democratic political system is one of the main attractions for doing business here, it would be wrong of us to always complain when politics stands in the way of business.
It seems clear to us that the government is sooner or later going to have to make a difficult decision about aviation expansion. So why not make that decision sooner? More and more rounds of consultation are not going to dig up a golden solution that satisfies everyone’s interests. Whatever decision is made, some people are not going to like it.
The UK is already losing out as our European competitors continue to meet demand… Supposed alternatives to Heathrow expansion are far too small in scale to provide a genuine solution
The current situation is the worst of both worlds because the ambiguity of the government’s position has created uncertainty, which makes it impossible for businesses to plan. The real worry is that those firms that have the ability to move their operations outside of the UK will do so.
Our position is quite clear. In the short to medium term, a third runway at Heathrow is the only way to alleviate current capacity constraints. The government seems fairly adamant that this option is off the table. We will continue to point out why this is the wrong call.
The continuing expansion of emerging markets such as China and Brazil means that there is ever increasing pressure on airlines to create new routes, whilst also maintaining existing ones. With Heathrow running at full capacity, the UK is already losing out as our European competitors continue to meet demand at airports such as Charles de Gaulle, Schiphol and Frankfurt.
Supposed alternatives to Heathrow expansion such as high speed rail, and attempts to absorb pressure through regional airports outside of the capital, are far too small in scale to provide a genuine solution.
In recent weeks we have seen both Boris Johnson and Lord Norman Foster put forward carefully considered proposals for an airport in the Thames Estuary. These proposals certainly deserve close attention, but neither offers a solution to the short-term capacity constraints we currently suffer from. A third runway at Heathrow can be built quickly and at no cost to the Treasury.
If the government is to maintain its current opposition to Heathrow expansion, then it needs to provide an alternative solution that meets both the current and future needs of the UK’s aviation industry, and it needs to provide it quickly. The same must be expected from the Labour Party, which has now dropped its support for a third runway. The business community would like to see a cross-party consensus, which would be the only practicable solution for taking the politics out of this issue.
The alternative would amount to the three main political parties admitting that a competitive aviation industry is not on their list of priorities. I am certain that such an acknowledgment would leave our competitors rubbing their hands with glee.
Colin Stanbridge is the chief executive of the London Chamber of Commerce and Industry.
Leave a Comment