Sunday 2 February 2020 6:29 pm

Business groups react as Heathrow expansion in doubt again

Business groups warned that the failure to expand Heathrow would see the UK “fall behind the rest of the world” as the new runway’s future was again plunged into doubt this weekend.

It emerged that Spanish infrastructure giant Ferrovial was reportedly considering selling its 25 per cent stake in the airport if it could not get “adequate returns” for investors.

Read More: Ferrovial adds to Heathrow uncertainty amid warnings over returns

The setback came after the Civil Aviation Authority (CAA) ruled in December that Heathrow could not spend more on early construction in order to ensure the runway was built by the end of 2026 as planned.

The ruling means that the third runway will now not be completed until 2028 – 2029.

A spokesperson for Heathrow called on the CAA to put in place a “fair settlement for investors” to guarantee the £14bn investment the project needs.

“Britain can be a magnet for foreign investment, but not if regulators dither when it comes to key projects,” they added. 

The latest development is a significant blow for industry groups, many of whom are staunch supporters of the project to expand Heathrow.

Mike Cherry, chairman of the Federation of Small Businesses, said: “Small businesses don’t want to see further delay to the plans for airport expansion.  It’s essential that small firms now get their chance in the huge procurement exercise to build both the runway and associated works. 

“More broadly, we need to see the promises for increased regional connectivity, tourism and freight delivered.  We must not continue to fall behind the rest of the world.”

His comments were echoed by Sean McKee, director of policy and public affairs at the London Chamber of Commerce, who said: 

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“The expansion of Heathrow should proceed to ensure Britain can succeed after Brexit. The simple fact is that aviation is an essential pillar of our island economy – air links are needed for British firms to trade internationally.

“The challenge for Boris Johnson’s government as we enter a post-EU era is to give Britain the ‘capacity to compete’. No more dithering and delaying – let’s get Heathrow done.”

The uncertainty means the government, which is still yet to formally back the building of HS2, will be dragged into another row over a major infrastructure project.

The expansion of Heathrow is one of the government’s most controversial projects, and is opposed by climate groups and local residents who claim that the airport, already the UK’s biggest source of carbon emissions, would produce an extra 8-9m megatonnes of CO2 per year.

Prime Minister Boris Johnson had been a high-profile opponent of the expansion. During his tenure as mayor of London, Johnson was quoted as saying: “I will lie down with you in front of those bulldozers and stop the building, stop the construction of that third runway.”

He has since dropped his opposition to the project after being absent for the Commons vote which approved it. 

But now, with the UK now out of the EU, many think the project is imperative. Claire Walker, executive director of the British Chamber of Commerce, said: 

Read More: Heathrow airport breaks Christmas passenger record

“The message from business couldn’t be simpler: no more delays on Heathrow expansion.

“Additional capacity at Heathrow will show international investors, our trading partners and our competitors that the United Kingdom is serious about remaining at the heart of the global economy.”