Sir Martin Sorrell on Heathrow expansion: Back it and get building – the government must move quickly on third runway
After nearly three years spent carefully examining the evidence, the Airports Commission published its Final Report yesterday. Its definitive view, following what has been a long and robust process, is that London needs one new runway, and that the best option is to expand Heathrow.
We believe that we need airport expansion, and that the government must now publicly back the view of the Commission and swiftly give the green light to building a new runway. We can no longer afford any more dilly-dallying.
As far as I’m concerned, this is a decision that should have been taken many years ago.
As an island nation, our international connectivity is fundamental to the flow of trade and exports, and to continuing to attract new business. To emphasise the point: we trade as much as 20 times more with countries with which we have a direct air link and, by value, 40 per cent of our exports go by air. If we do not move quickly to build a new runway and expand our international connectivity, our ability to grow our trade and exports to new markets will be stunted.
The Commission has found that an expanded Heathrow will deliver up to £147bn in economic benefit and create 700,000 new jobs, at a time when we need them. Furthermore, it’s a little-known fact that London is currently home to more $1bn international subsidiaries than any other global city, and one of the things that makes the capital a thriving global hub for business is our global aviation hub status. According to the McKinsey Global Institute, by the middle of the 2020s, there are likely to be around 7,000 new companies with revenue of more than $1bn globally – 68 per cent of which are expected to be in fast-growing markets. This presents a huge opportunity to maintain and enhance London’s position as the best City in the world from which to do business. But without the additional connectivity to the emerging markets, its hard-earned primacy could be increasingly risked.
Indeed, as the Commission’s Final Report makes clear, unless the government makes a quick decision, our status as a leading global aviation hub will increasingly be under threat. This is because, here in London, our only international hub airport – Heathrow – has now been full for a decade, while all of the capital’s other major airports will be full by the end of the next, if not sooner, without this much-needed expansion. A new runway is sine qua non.
We have not built a new full-length runway in the South East since 1945. And, as a result of decades of inaction, Britain is already starting to fall behind. Across Europe, our competitors moved relatively quickly and upgraded their airport infrastructures years ago. Amsterdam has six runways, while Paris and Frankfurt each have four. This has resulted in our capital city now having fewer weekly flights than our European hub rivals to seven of the eight growth economies identified by the IMF. In fact, the only growth market that we have more flights to is India, and that is as a result of our historic economic ties. Looking further to the future, between now and 2036, global cities around the world plan on building no less than 50 new runways, with China alone building 17. Earlier this year, Dubai International overtook Heathrow as the world’s busiest airport – even before they build the new Dubai World Central airport, which will have more capacity than all of London’s airports combined. The writing is clearly on the wall.
Some will argue that Heathrow’s expansion is politically undeliverable. I believe, however, that the political challenges can be overcome. On aircraft noise, the view of the Commission is that, even with expansion, Heathrow will get quieter – in part thanks to the fact that new aircraft are around 30 per cent less noisy. Meanwhile, on CO2, the Independent Committee on Climate Change has concluded that a 60 per cent growth in flights by 2050, from 2005, is compatible with the UK’s overall carbon reduction targets. In fact, the cumulative footprint of the UK’s biggest airports has shrunk by 3 per cent since 2010, despite passenger numbers increasing by 5 per cent over the same period.
In the last Parliament, the Tory party showed bold and determined leadership in modernising our rail network by pushing through HS2. Today, the government must use its new mandate and adopt the same kind of leadership – this time in modernising our airport infrastructure. If its long-term economic plan is to remain credible, then allowing credible and achievable investment into the construction of a new runway is an absolute must. It is a decision that would be good for jobs, good for growth, and good for British business.