More doubts raised over economic benefits of Heathrow third runway

More doubts raised over economic benefits of Heathrow third runway

The Airports Commission that recommended expanding Heathrow reportedly based its decision in part on economic models that its own advisory panel believed were questionable.

Experts advising the commission said that figures showing that the expansion would deliver a £147 billion boost to Britain should be treated with “caution” in its final calculations.

Documents seen by The Times show that the commission was warned against “attaching significant weight” to the figures, which measured the impact that an extra runway would have on the UK economy.

The same analysis put the benefits of expanding Gatwick at £89 billion. The figures were published in a press release issued by the commission with its report backing Heathrow last year.

However, the department now believes that the economic benefit of a third runway at Heathrow will be £61 billion, only marginally more than the £54 billion it projected for Gatwick.

The case for Heathrow may have been inflated by the inclusion of transfer passengers in the final economic assessment, according to The Times.

Passengers who pass through the hub en route to other countries but never leave the airport are likely to have a lower impact on the economy than those who actually spend time in Britain.

Stripping out these passengers – about a third of the total at Heathrow – would put it on practically an equal footing with Gatwick, it is believed.

Zac Goldsmith, the anti-Heathrow MP who resigned his seat in Richmond Park this week in protest over the decision, said: “The economic case for Heathrow expansion versus Gatwick is unravelling fast and it’s clear that at best the benefits of expansion are more or less identical for both options.”

The government denied that its own figures represented a downgrading of the benefits of expanding Heathrow, saying that it was impossible to compare the higher and lower assessments as they were calculated in different ways.

It also pointed to the fact that the commission also used a second set of economic benefit figures — £69 billion for Heathrow and £60 billion for Gatwick — that were much closer to its own assessment.

The DfT said: “The new Heathrow runway is the best scheme with the greatest benefits to passengers and the wider economy. The £61 billion estimate represents benefits to passengers (from reduced fares and increased frequencies) and the wider economy.

“The DfT has also estimated a net present value which takes into account all the costs and benefits of the schemes, including compensation and other negative impacts such as air pollution.”

A Heathrow spokesman said: “Of all the runway options considered, across all scenarios and methodologies used by both the Airports Commission and the DfT, Heathrow offers the greatest economic benefits.”


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