1. Should there be a third runway at Heathrow? To see more of our products visit our website at www.anforme.co.uk Professor Colin Bamford, University of Huddersfield

2. Airports, especially in the South East and Heathrow in particular, are vital for the country’s business well-being and competitiveness in the global economy. C Airports and air travel generate a wide range of negative externalities, the most important being noise disturbance. C There are also serious concerns about emissions from aircraft with around 6% of all CO2 emissions coming from aircraft. C Introduction But as the CBI has recently said: “The UK risks becoming a branch- line destination and will find it increasingly hard to compete in global export markets if it does not... tackle constraints on capacity at Heathrow.” C There are also positive externalities through additional employment created around Heathrow and throughout the economy as a whole. C

3. Air transport policy in the UK has been haphazard and lacking a clear strategic objective as far as London’s principal airport is concerned. C Many would argue that this is due to the widely held view that Heathrow is in the wrong place. C Far too many people are affected by the noise of aircraft taking off and landing and from road traffic in the vicinity of Heathrow. C The lack of a clear policy The Coalition government reversed its predecessor’s decision to approve a limited expansion through a third runway and sixth terminal. C A new aviation review is about to take place, and this has reopened the political debate about building a third runway at Heathrow. C

4. The demand for air travel is a derived demand. C It is not demanded for its own sake but because it allows users to fulfil a purpose such as travelling for business or holidays. C The demand for air travel For air passenger services the annual rate of change has been remarkably steady until the 2008 recession began to affect passenger numbers. C In 2011 UK airports handled 219m terminal passengers, 134m at London airports, which was an increase of 5% on 2010. C Over 69m passengers passed through Heathrow, an all time high, and a growth of 6% on 2010. C Heathrow is operating at 99.2% of capacity with Gatwick not far behind. C

5. If forecasts of demand are to be believed, by 2030 between 410m and 500m passengers will be using our airports. C In the March 2012 Budget it was announced that the Government would conduct a review of aviation policy. C According to the CBI this will be the eleventh such policy review over the past 60 years. C Why we need more airport capacity 1 The CBI argues that quick decisions need to be made on a new runway to serve the South East, and how to maximise capacity and improve access to other regional airports. C

6. The case for a third runway at Heathrow is being vigorously promoted by leading industry figures. C In their view Heathrow has to be the hub solution for the short to medium term at least. C Recent research by the British Chambers of Commerce has shown that business leaders in the emerging high growth economies such as China, India, Brazil and Russia put a high value on direct air links. C Of those interviewed, 80% claimed that they would trade more with the UK if flight connections were improved to their countries. C Why we need more airport capacity 2 At present only three cities in China have direct links with Heathrow. C The key business issue is that the UK is already losing out in terms of its competitiveness in the global economy. C

7. For many years the noise from aircraft arriving and taking off at Heathrow has been measured. C The problem with aircraft noise is that above a certain level, it becomes an unwanted disturbance on our ears. C But over the years, aircraft have become quieter, and despite an increase in traffic, less people in the vicinity of Heathrow have been adversely affected by aircraft noise. C Environmental considerations 1 The main cause of the improvement has been technical, with newer aircraft making less noise. C

8. A third runway at Heathrow would cause the village of Sipson to disappear and much of Harmondsworth to be demolished. C In addition, it has been estimated that an additional one million people living under flight paths will suffer from noise disturbance. C A second environmental issue is that of CO2 emissions. C If the third runway operates at full capacity then an estimated 27m tonnes of CO2 will be generated from Heathrow’s operations, a 50% increase on current levels. C Environmental considerations 2

9. The UK has a legal commitment to reduce its greenhouse gas emissions by 80% below 1990 levels by 2050. C It has been estimated that by 2050, with a third runway fully operational, Heathrow will generate between 20 and 25% of the UK’s entire emissions budget. C A further cause for environmental concerns is the emission of nitrogen dioxide from aircraft movements. C Further negative externalities come about because of the road congestion in the vicinity of Heathrow. C Rail travel though has improved considerably with the Heathrow Express services from Paddington. C Environmental considerations 3

10. Cost benefit analysis is a well tried method for assessing the desirability of a project like that of a third runway. C It tries to estimate the respective benefits and costs over time and over a wide area. C In 2009 a Department for Transport report stated that adding a third runway would generate net benefits of around £ 5bn. C But in 2010 the New Economics Foundation concluded that there would be a net cost to society of between £ 5b and £ 7.5bn, based on a Social Return on Investment approach. C However, critics of this would say that the economic and business benefits are not given the same degree of prominence as measures designed to reduce environmental impact. C Does cost-benefit analysis help?

11. Like many controversial topics in Economics there is no particular agreement amongst those concerned as to whether a new third runway should be built at Heathrow. C We will have to await a decision until the consultation on airport strategy has been completed. C Other possibilities include a completely new airport on the Thames Estuary popularly known as ‘Boris Island’ as it is supported by the London Mayor, Boris Johnson. C There could also be a major expansion of Birmingham Airport, or the construction of a high speed rail link between Heathrow and Gatwick to create a better hub. C Conclusions Unless decisions are made soon, the UK really will be a branch-line destination for global air transport. C