The economic impact of a third runway at Heathrow

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As the government continues with its ambition to expand Heathrow, new findings from recently published official documents demonstrate less favourable national and regional economic impacts than has been previously publicised. The draft Heathrow expansion national policy statement (HENPS) was published on 18 June for consultation alongside a tranche of Department for Transport (DfT) impact assessment documents. 

The key points are:

• The Green Book cost-benefit analysis concludes that the scheme has a net present value of between -£23.4bn and -£62.5bn over 60 years.
• The GDP impact has been revised downwards by a factor of 10 and now sits at 0.03 – 0.05% in 2056, concentrated in London and the south-east.
• The DfT expects the local jobs created by the scheme to primarily represent jobs displaced from around the wider UK. New Economics Foundation (NEF) analysis of DfT forecasts suggests 15,200 jobs would be lost in the wider regions of the UK in 2050. A further 6,400 jobs would be displaced within London and the south-east.
• The appraisal of sustainability (AoS) identifies major adverse impacts across 10 environmental domains. The AoS describes the economy impacts as ​“uncertain” at the national level and the quality-of-life impacts as ​“not evenly distributed”.

The government’s assessments highlight the lack of a viable economic case for the construction of a third runway at Heathrow. The economic proposal is principally to relocate jobs and economic activity from the UK’s wider regions to the south-east. In the process, exceptional disruption and congestion will be created in west London, millions of households will be exposed to new or worsened air quality and noise, and significant climate damage will result, putting our legal climate targets at risk. 

The potential drain on public resources in providing surface access, navigating planning and construction, and capturing millions of tonnes of carbon overspend are not only a financial liability but a major distraction from the key task at hand: improving living standards in every corner of the UK.

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