Flight of fantasy: why Rachel Reeves has it wrong on Heathrow
This week, UK Chancellor of the Exchequer Rachel Reeves (right) is expected to announce that the long debated third runway at Heathrow will get the green light in the name of growth. Here’s why I think this is misguided:
1. Flying is one of the cheapest ways to emit carbon. You can get a flight from, say, Edinburgh to London for a fraction of the cost of a train ticket, while emitting ten times as much carbon. The lack of tax on airline fuel plus a load of other tax breaks for airports is almost certainly the biggest perverse incentive in the climate battle.
2. This ultra low ‘cost per tonne of carbon’ makes the ‘rebound effect’/Jevons paradox more problematic. If we save energy costs through efficiency measures elsewhere, but spend that saved money on flights, we are very likely to increase emissions overall. The polluter must pay to get us on a sustainable trajectory.
3. Despite all of Boris Johnson’s bluster about ‘jet zero’, echoed by Reeves yesterday, sustainable aviation fuels are not looking promising in terms of affordability. Therefore expanding aviation is very likely to increase carbon emissions for the foreseeable future, no matter what people hope.
4. Only 12% of flights by UK citizens are business travel. Heathrow claims 28%, but even then, almost three quarters of seats are taken for leisure. What’s more these seats are bought by a minority of wealthy individuals (15% of the population are responsible for 70% of flights) – many taking their discretionary spend overseas which isn’t great for the UK economy.
5. I’ve never been convinced by (much of) the ‘build infrastructure to boost growth’ line. Just north of where I am typing this, SE Northumberland is criss-crossed with A-roads which were built in a previous attempt to, yes, boost growth. We got big roads and no growth (plus a substantial maintenance bill). Likewise, I’ve seen new business parks simply attracting tenants from other sites, rather than stimulating new businesses or expansion of existing business. ‘Jobs created’ figures are, in my view, largely fictional (and I’ve compiled some).
6. Several local airports have needed bailing out by the taxpayer – eg Teesside Airport had to be bought by the Tees Valley Combined Authority in 2019 and still makes a substantial loss. Who picks up the bill? If airport expansion really drives economic growth, particularly in a development zone like Teesside, would you not expect an airport to stand on its own two feet? If an airport was going bust pre-Covid, how will it survive in the world of Zoom?
My view is that expanding aviation simply means the taxpayer subsidising a wealthy minority to spend their money overseas, all while exacerbating climate change. I cannot see how this will drive UK growth. If Rachel Reeves needs an economic lever to pull, then reforming the electricity system to unlock the huge backlog of green energy projects and drive down energy prices should be top of her list.