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There’s another reason Rachel Reeves is so keen to talk about Heathrow

The third runway has become a totem for Labour’s commitment to economic growth – but there are too many contradictions in Reeves’s plans for there not to be major turbulence ahead, says Mary Dejevsky

Thursday 30 January 2025 12:40 EST
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Rachel Reeves sends message to Sadiq Khan as London mayor opposes Heathrow expansion

What if you had voted Labour at the last election because you hoped for a moderate government and not – or, mostly not – because you were fed up with the Tories? You might have accepted a few olive branches extended to big business so as not to scare the horses – but nothing too drastic.

After Rachel Reeves’ speech on Wednesday, what do you think now?

The chancellor’s argument that economic growth eclipses all and that the key is to dig out that ancient plan for an Oxbridge “Silicon Corridor” and flurry of airport expansions may have left you baffled. If so, I share that bafflement.

I understand why Reeves, chancellor of a new government, would present her inheritance from the Conservatives in the bleakest possible light. I understand the primacy of “growth” – although I would like some acknowledgement that it isn’t just the national pie that must grow but every person’s share. What I haven’t understood is how the different strands can be woven together. The chancellor may have stuck to her promise not to raise taxes on working people, but her Budget raised national insurance contributions for private-sector employers, which is producing an entirely predictable squeeze on pay and loss of jobs.

Similarly, there is no growth in settling pay claims in generous terms for the unions and public sector without setting conditions on productivity. This was the government’s chance to get more for more, but by the transport secretary’s own admission, the rail service got worse after the drivers received their rise.

Wasn’t it the same with GPs after their 2006 settlement, which relieved them of working nights and weekends? Patricia Hewitt, the health secretary who signed off on that deal, was made a dame in the New Year’s Honours to recognise her “significant contribution to health and care services” – so no lessons learned.

Exceptional pay rises for some on the government’s payroll fuel demands from others. Can there be any doubt that other NHS staff will cite the junior doctors in their next pay round, and the largely private-sector (and worse-paid) care workers will lose out again? Doctors may have more in their pockets, but how does it foster economic growth if people can’t get the care that would allow other family members to work?

I grant that a Labour government needs to offer a few baubles to businesses, although you might ask if watering down the new rules for super-rich foreigners that you have only just set sends a useful signal. But there are too many contradictions in the Budget and the growth plan Reeves set out this week for there not to be trouble ahead.

In practice, the mass of infrastructure projects – from reservoirs to railways and airports – will need workers that the UK simply does not have. Will we see accelerated training programmes in relevant local areas? Or will blind eyes be turned when managers ask to import talent from abroad? The pie may be bigger, but it will have to serve more.

The drive for airport expansion is not presented as a trade-off, but it is. The third runway is essentially a cipher. Heathrow is a business airport. What better demonstration of this government’s commitment to put growth ahead of – well, pretty much anything? One consequence may be that other expansions at Gatwick and Luton get a relatively easy ride.

Symbolic as it may remain, Heathrow could soon obscure other aspects of Labour’s growth agenda. The third runway has never happened for practical reasons such as demolishing villages, re-routing a multi-lane motorway and other major works that must leave the cost-benefit ratio in serious doubt – but also environmental considerations. Many of the current cabinet, including Keir Starmer, opposed a third Heathrow runway last time around.

‘Many of the current Cabinet, including Reeves herself, opposed a third Heathrow runway last time around’
‘Many of the current Cabinet, including Reeves herself, opposed a third Heathrow runway last time around’ (PA)

The absence of the energy and climate change secretary, Ed Miliband, from Reeves’s big growth speech spoke volumes. But a leader for the internal Labour opposition had already stepped forward, the London mayor, Sadiq Khan.

It is all very well for Reeves to celebrate cleaner fuel, quieter planes and – good grief – cheaper family holidays, but most planes remain polluting beasts to those living below their flight paths. The population density beneath that of Heathrow is the highest of any major European airport. They also present a danger, as this week’s fatal crash at Washington DC’s most central airport tragically showed. If such a collision had happened on the final approach to Heathrow, there would have been additional casualties on the ground.

These objections could quickly build into a real problem for Reeves – not just because Heathrow affects a lot of people, but because they will question her argument that economic growth trumps all. Does it? Peace, breathable air, liveable space? I have lived in central or west London for decades, and it certainly doesn’t for me, nor most of my neighbours.

Quality of life is a hallmark of any developed economy and civilised country. Air travel offers a good example of how growth is not all, as seen by the return to rail travel in many of the most advanced nations. When will Reeves have to confront this argument?

Rather than singling out Heathrow’s expansion as a totem of its growth quest, the government could take the far bolder step of reconsidering a new London airport, as envisaged by the 2013 review which favoured a site in the Thames Estuary.

The downside for Labour would be its association with Boris Johnson. But a prospectus could surely have been reworked to present an exciting new national project that offered an optimum balance between economic growth and improved quality of life for London. Planning could have been fast-tracked according to the envisaged new rules for critical infrastructure and a tight timetable set for completion. Such a project would have had something of a braver and better world about it – growth in a good way – which the now inevitable court battles and protests over a third Heathrow runway, categorically, will not.

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