Europe is the ‘elephant in the room’ in our energy debate

Luke Major

Energy has dominated politics for the last few months and the Prime Minister hopes to counter Ed Miliband’s price freeze pledge by rolling back the green levies that contribute to rising bills. Both offers have very little credibility, in my opinion, for a reason that few of our politicians want to talk about. The bottom line is that when it comes to energy prices, both Party leaders’ hands are tried – somewhat willingly – by our links to the European Union.

Although energy policy remains under Member States’ control, the EU’s commitment to becoming the world’s leader in economic decarbonisation exerts pressure on Britain. For example, Mr. Miliband’s 2008 Climate Change Act commits our government to reducing the country’s carbon emissions to at least 80% lower than 1990s-levels by 2050 and can be seen as the ‘jewel in the crown’ of the EU’s decarbonisation mission. These legally binding targets are being pursued at an astronomical cost to British taxpayer, cutting off our access to cheap energy by closing down coal-fired power stations and focusing on using heavily subsidised renewable energy instead. Such radical changes were never going to come cheap.

These legally binding targets, which all the major parties agreed with at the time, have caused energy prices to soar for homeowners and businesses alike – pushing more and more people into ‘fuel poverty’. Depressingly, it has been estimated that electricity prices have increased by 17% in the last four years and could rise another 41% by 2040 as further measures within the Climate Change Act come into effect. This reflects well neither on Labour nor the Tories – both of which, despite the posturing, do not seem to be able to do much about it. A cynical person might think that Mr. Miliband has sought to lay the blame at energy companies (whose profits per year average at a quite normal 5-6%) to deflect attention away from his own role in inflating prices. He may also think Mr. Cameron is seeking to distinguish himself from the green-friendly Liberal Democrats to make himself a more viable option to UKIP voters who share Nigel Farage’s scepticism about man-made climate change.

However pressing you might think it is that we continue with decarbonisation, the needs of those who are already struggling with fuel bills will not be met with cheap gimmicks, especially if energy bills do indeed continue to rise. There is a reasonable political and moral case on top of the economic one, for the Prime Minister to include a more ‘laissez-faire’ attitude towards energy policy in any future re-structuring of our relationship with Europe. As already stated, although energy is under Member States’ control, our international reputation depends on us being on song with the EU’s carbon reduction plan – otherwise we could simply ignore all these targets as the enforcement mechanisms barely hold up to scrutiny.

With regards to specifics, the European Commission has stated that it wants to see the shale gas market regulated to the point where it doesn’t pose any significant environmental risk. This is another way of saying that fracking should be made less economically viable and, thus, more expensive when it reaches the consumer. The ‘better off out’ contingent of the Tories would no doubt be wondering why any potential damage to UK landscape should be the concern of the EU (evidence suggests potential damage has been grossly exaggerated), especially when shale gas development could potentially benefit an EU gas market that is being undermined by the shale gas boom in the USA that is flooding our own continent with unwanted cheap coal.

There is also the more complex issue of nuclear power. The EU has state aid rules in place that constrict the degree to which the British government can guarantee financial security to the private companies taking on the risk of building nuclear plants. Once again, the already lengthy and costly process of diversifying and spreading the burden of our energy needs hits those paying the bills in the end.

David Cameron will most definitely be aware of the EU’s impact on our ability to control energy prices, but I fear he has chosen to ignore this up until now because of his previous backing of the Climate Change Act, his husky hugging, and his pledge to lead “the greenest government ever”. He will now face accusations of fraudulent behaviour and political opportunism from his opponents, but if businesses and ordinary people have more money in their pockets as a result of a slowing down of economic de-carbonisation, then it will be worth it.

Follow Luke on Twitter.

What is Mrs Thatcher’s legacy? Britain.

Nik Darlington 4.30pm

Margaret Thatcher did not get everything right. What politician does? But her legacy is not just a few policies here, a few new organisations there. Her legacy is the Britain we know. For how many politicians can we say that?

She changed the direction of the country’s travel. Not by a margin of degrees, but by right angles.

The Telegraph's Peter Oborne wrote recently:

"In a way that is probably hard for those who did not live through this period to understand, for the best part of that decade the very existence of the British state appeared to be under threat. Politicians from all mainstream parties seemed quite unable to cope with what appeared to be insoluble problems. Only the far Left was wholly confident of the answers, and the situation only started to clarify with Margaret Thatcher’s victory in the 1979 general election."

The very existence of the British state. Say those words again. The more you do, the more implausible it sounds - but on a certain level it is as plausible as the rising sun. Over the course of the troubled 1970s, Britain had become nigh on ungovernable. Like today, global currents were in part sweeping the country along a course it could neither understand nor control. Yet infamous “enemies within” wrecked successive government attempts to reign them in - whether Ted Heath’s industrial policies of the first half of the decade, or Wilson and Callaghan’s palliative care in the latter half.

Ken Clarke said in 1985, when Paymaster-General:

"When we returned to office in 1979 one very major reason was that we were elected to curb excessive trade union power…and the abuse of trade union power vis-à-vis employees within trade unions.  The background was that a good Government had been swept out of power in 1974 by a political miner’s strike, and the Labour Government in the late 1970s had been firmly controlled by trade union bosses."

Mrs Thatcher’s government learned valuable lessons from her Tory predecessor’s failures. In contrast to the popular perception of her as a bludgeon, she was cautious. She knew when to pick her fights. She was better prepared. And she had an answer to the economic malaise of the time.

Following the 1984-85 miners’ strike, Britain witnessed its lowest rate of industrial unrest for half a century, with 1.92 million working days lost in 1986. In 1974, the country lost 14.75 million working days and over 6 million in 1975. The alleged ‘Winter of Discontent’ contributed to almost 29.5 million working days lost in 1979 alone. Thenceforth, strike activity was in overall decline - with the obvious exception in 1985.

We can argue till the end of our days about the merits, motives and consequences of Mrs Thatcher’s policies - and people will continue to do so, not least because hers is a fascinating period of study. When an undergraduate, I took a history course named, simply, ‘Thatcherism’ (taught by one of the 364 economists, no less). It converted me from a misty-eyed admirer to an awed, respectful and yet critical supporter. It enthralled me like only a genuine watershed in history can.

It cannot ever be doubted that Mrs Thatcher stood firm to her purpose. Her obduracy on certain issues earned her enemies, but it earned her many, many more adherents. ‘You may not have agreed with her, but at least you knew where she stood,’ is the typical refrain.

The Thatcher legacy is rich and multi-faceted. On industrial policy, certainly, she made the greatest break with the immediate past - not least in that she succeeded in bringing (relative) harmony where there was discord. On many other policies, she set in train a revolution that has traversed three decades of British life: privatisation for instance (a word she hated), a liberal economy based on a powerful and flexible financial sector (and subsequently fruitful symbiosis between other professional services such as law and accountancy), and - oft forgotten - a firm hand of environmental protection.

Today we remember across the newsreels - and tomorrow across the newspapers - a great woman, and a great Briton. Meanwhile a family weeps, a country stops, and an entire world mourns.

Follow Nik on Twitter @NikDarlington

A chance underwater encounter in New Caledonia

Nik Darlington 11.50am

We hovered in clear blue mid-water, soaring over a pristine piste of snow-white sand. Twenty metres to the shimmering sun on the surface, another five to the seabed below.

Out of the deeper-blue distance, I spotted shards of silver and grey. Then another. Those shards became shapes; the shapes became a grey-blue shadow.

Yannick and I locked eyes, nodded and returned our sights to the enlarging shadow. Rapt. In this silent world, a look conveys more than words.

The shadow took form. A sleek six feet, maybe slightly more. The distance shortened, but slowly, as is its want, until a natural cordon ten metres in diameter was formed.

Yannick and I assumed the safest, recommended stance: back-to-back, never take your eyes off its circling form. Precautionary, of course, but truly indeed just to maintain a good look of it. Such economy of movement. So at home.

Unlike Yannick and I, thrill-seeking spectators in an alien environment. Though this is voyeurism with risks. Its graceful orbit became tighter, to the point of its being suffocating. At moments like this one appreciates the non-contradiction of claustrophobia in open water.

Admiration quickly became apprehension. No more than five metres separated us. Little more than two times it.

Then it stopped. Time stood still. Noiselessness interrupted by a noise so inimitable, yet unforgettable. Like a vehicle exhaust backfiring, or the expert crack of a whip.

By the time I had realised it was heading towards us, the sleek form had become a shadow once more. Then shards of silver and grey. Then nothing. All that remained was the shudder of displaced water against my stiffened body. Hairs don’t often stand on end under water.

Yannick and I locked eyes, and smiled.

Yesterday in Bangkok, the oceanic white tip shark was given unprecedented protection by CITES. Its numbers are in dramatic decline as a result of barbaric fishing practices (its prominent dorsal fin is a prized ingredient for Oriental pottage and eccentric medicines).

Opposition from China and Japan has long prevented its accession to a list of protected species but now, alongside three types of hammerheads and the porbeagle, the vulnerable oceanic white tip has been given a stay of execution.

Sharks are too often misunderstood, mistreated and maligned in fiction and film. As our understanding of sharks has increased, however, nations around the world have come to realise their immense worth and intrinsic beauty. Apparently the sea change has been arrived at in part by South American countries comprehending the vast tourism dollars that come with healthy shark stocks.

In coming into direct contact with sharks big and small over the years, I have certainly come to know fear and delight in equal measure. Fear is a good thing - it engenders respect. And is the truest basis for the sublime. There aren’t many good news stories where sharks are concerned. This is one.

Follow Nik on Twitter @NikDarlington

Is being green worth its weight in gold? Or will moral credit leave you bankrupt?

Sara Benwell 11.03am

Ethical investment is seriously hot right now. Last week was National Ethical Investment Week, the week where everyone is encouraged to put their money in funds that will save the world, or will at least not outright harm it.

There’s a broad range of ethical investments: from those focusing on being environmental, sustainable or just generally socially responsible, to those simply avoiding funds that might be considered ethically dodgy, such as weapons, alcohol, pornography or gambling.

The Government has been pushing social investing over the last two years, supporting 'impact investing', and launching Big Society Capital, an initiative designed to take an estimated £400 million from dormant bank accounts to help develop the social investment market. It is also launching the world’s first Green Investment Bank to provide financing for low carbon investment projects (see Alex’s previous coverage of it here).

It’s not just the Government. There is strong evidence of increasing consumer demand for greener investments. In fact Triodos, a bank specialising in ethical investments, has seen a 78 per cent increase in people wanting to open savings accounts. It has also doubled the money coming into its accounts each year. Furthermore, according to Eurosif, the Brussels-based European Sustainable Investment Forum, the amount of money in the UK invested in a “sustainable and responsible” manner has reached an estimated £275 billion.

The obvious reasons behind these funds are morality-based, but an investment needs to make money too or it’s just a waste of time. Yet can ethical investments offer real returns?

They are somewhat subjective, insofar as they depend on what any particular individual considers to be morally important, and the process is far from straightforward, but that doesn’t mean there’s not money to be made. Ethical investments, bank accounts, pensions and mortgages are now available to most consumers.

However, renewable energy has been a disaster for ethical investors recently, with wind and solar power systems companies being among the worst-performing stocks in the last few years.

For instance, the Guardian reported that Vestas, the Danish wind turbine maker, had cost investors almost 95 per cent of their money. The article also reported that the BlackRock New Energy Investment Trust has fallen 49.9 per cent since 2007. Furthermore, negative screening of so-called ‘sin funds’ mean that investment products are less diversified and there is less recourse to defensive funds, which can lead to volatility. These are just some amongst a multitude of examples, illustrating why many people are wary when it comes to ‘being ethical’ with money.

Nonetheless, there is some evidence that it’s possible to be ethical and still taking care of your money.

One theory is that companies on the right side of the ethics debate are less likely to fall out with regulators, end up in expensive court battles or face strikes or boycotts of their products from consumers. All of these can impact reputation and even share price, so ethical companies should look like good long term prospects.

This is illustrated in the pensions industry, where an increasing number of funds are declaring support for the UN-backed Principles for Responsible Investment (PRI), an institutional investor initiative for ethical investment. The number signed up has jumped by over a quarter in the last two years.

Furthermore, there are those out there who believe a carbon-based economy is unsustainable, for obvious reasons. This too suggests that forward looking ethical investments are likely to do well in the long term.

Another thing to consider is as public opinion shifts, and we care more and more about everything from whether our eggs are free range to whether we invest ethically, it seems likely that the value of companies who can prove to stakeholders that they have sustainable values will rise.

It is important that the Government continues to support ethical investments, and it is encouraging that the public is beginning to demand how their money is made and at whose expense.

However, there must be further support and ambition from both the Government and the financial services industry if ethical investment can be sustainable. Meanwhile the Coalition should be wary about throwing money behind schemes that may leave people worse off, especially in a financial crisis. It’s all well and good being “ethical” but it will backfire if it costs people their pensions.

There are ethical funds that perform well, so perhaps the government should think about putting its money towards education, so that people are equipped with the knowledge to do the right thing – whilst also putting the pennies away for the future.

Follow Sara on Twitter @sarabenwell

Planning reform: a victory for conservationists, but beware the calm before the storm

Nik Darlington 11.03am

Some (moderately) good news! The Government published the final version of its new National Planning Policy Framework (NPPF) yesterday and it is a paramount improvement on earlier drafts.

What is more, the DCLG has managed to squeeze it in to even fewer pages (a mere 49 compared to 52), proving that as far as planning is concerned, size really isn’t everything.

The Telegraph is tickled pink. The newspaper’s 'Hands Off Our Land' campaign, which I have lauded on these pages before, provided a sustained and important outlet for opposition to the Government’s clumsy proposals last summer. The new NPPF, says the paper’s leader, “strikes a far healthier balance between development and the environment.”

Environment correspondent Geoffrey Lean hails the Telegraph readers who “refused to be fazed” during a seven-month “bloody battle” with a Government that “veered from amazement to anger”.

The Chancellor and Eric Pickles, the Communities Secretary, immediately announced: “No one should underestimate our determination to win this battle.” Meanwhile, Vince Cable, the Business Secretary, called objectors “semi-hysterical”, the planning minister Greg Clark accused them of “nihilistic selfishness”, and his junior, Bob Neill, blamed “a carefully choreographed smear campaign by Left-wingers based within the national headquarters of pressure groups”.

In the Times (£), columnist Alice Thompson declares ”the circle has been squared” by the “genial” Greg Clark, the “Clark Kent of politics” who has “achieved the impossible” by reconciling the divergent interests of big property developers and conservationists. She closes by suggesting mischievously that Mr Clark should be considered for the Department of Health, to “see if he can also achieve the impossible there”.

Meanwhile Sir Simon Jenkins, chairman of the National Trust and perhaps the single most vocal critic of the initial proposals, unsurprisingly devotes his Guardian column to declaring victory for conservationists over the “cowboy lobbyists”.

What last summer read like a builder’s manifesto has been replaced with proper planning guidance.

The builders’ lobby customarily seizes on housing shortage to argue for freeing the countryside for construction. But there is no shortage of land - only of land builders can most profitably develop, and that is rural land.

But Sir Simon warns that, of course, “the proof will be in the eating”. There are still fears for what even these vastly improved reforms could unleash if local authorities and communities, given only twelve months to get local plans together, cannot stand up to powerful developers. Localism is only a virtue if you have strong locals.

The Daily Mail is a lone dissenter among the leader columns:

…Those who stand to gain most are get-rich-quick developers…[and] the biggest losers will be the lovers of England’s countryside…

No amount of ministerial bluster can disguise the acute threat to the countryside - a heritage as precious as our language - contained in the order that there must be a ‘presumption in favour of sustainable development’.

I have written elsewhere why there is no such thing as sustainable development. And as Sir Simon Jenkins wrote last summer, “the only sustainable meadow is a meadow”.

But sustainable development will always be a woolly concept. We cannot truly determine sustainability in the present; that task is left to future generations. We make do with best guesses. Therein lies the risk. Yet such an existential risk would have existed whatever the Government had written down in its planning guidance.

As it happens, by making explicit recognition of the coalition’s updated sustainable development strategy, the wording is tighter and less open to abuse.

What other improvements are there in the final draft? I wrote for the Richmond Magazine last month that recognition of the “intrinsic character and beauty” of ordinary landscapes (i.e. the 55 per cent of the countryside not protected by National Parks and the like) would be crucial to any breakthrough.

That recognition has been restored, along with a brownfield-first policy, stronger protection for the Green Belt and playing fields, and the ‘default yes’ to development has been removed.

These are all revisions to be celebrated. Nonetheless, there are many challenges ahead. When he delivered the Budget last week, the Chancellor was very clear that whatever concessions were made in the final NPPF, development would still be easier, not harder. That remains true.

If localism is to have any worth whatsoever, then local communities need to work flat out in the coming months to be ready. The Daily Mail's negativity (or nihilism) goes too far, certainly. But this could well turn out to be the calm before the storm.

Follow Nik on Twitter @NikDarlington

Coalition hasn’t killed the NHS, but its planning reforms could kill the countryside bit by bit

Nik Darlington 10.14am

In affectionate remembrance of English cricket, which died at the Oval on 29th August, 1882, deeply lamented by a large circle of sorrowing friends and acquaintances. RIP.

NB: The body will be cremated and the Ashes taken to Australia.

It probably wasn’t the first instance of an ironic elegy by an English newspaper, but the Sporting Times' obituary for English cricket is possibly the most famous.

The Mirror newspaper puts on its front page today a mock tomb stone mourning the NHS, “killed by the coalition” aged 64 (right).

Call me overly presumptive, but I don’t think it will follow the Sporting Times' cricket obituary into the history books.

And as English cricket did not truly die in 1882 (with England the pre-eminent team in the world today, the game is in rude health), the NHS did not truly die yesterday. Nor will it truly die when the Health & Social Care Bill receives Royal Assent, as it is due to do sometime before Easter.

The NHS will undergo some significant upheaval, of course, which makes previous promises of “non top-down reorganisation” look imprudent. And some people in the healthcare professions a bit upset (to put it mildly, which many others won’t).

But there will still be a National Health Service, free at the point of use, funded by general taxation. That founding philosophy is unchanged. And, thanks to the Conservative party’s commitment to increase health spending each year, the NHS will continue to receive the funding it needs at a time of increasing costs and demands for healthcare.

The Mirror and other excitable clods will look just a bit foolish when 2013 rolls in and the NHS is still alive and breathing.

Elsewhere though, another national institution of sorts, of a similar vintage, does have one foot in the grave.

As the Independent reports, the Chancellor is expected today to announce the publication of the re-drafted National Planning Policy Framework (NPPF), and “drive a bulldozer through decades of countryside protection”.

These represent the biggest changes to the planning system since it was set up by the Town and Country Planning Act of 1947, and effectively change it from an instrument to protect the countryside into an instrument to foster economic growth.

I’m told by the National Trust that a more robust definition of “sustainable development” has made it in to the NPPF, following input from Parliament’s Environmental Audit Committee. This, fingers crossed, should tighten up one of the woolliest, most incompetent elements of the original draft.

Nevertheless, the feeling is that there will be very few practical concessions on policy. For instance, George Osborne remains adamant that economic growth should be prioritised ahead of concerns about greenfield development.

And most worryingly, the Government is withholding protections for “ordinary” countryside (55 per cent of rural England), with only established biscuit-tin landscapes safeguarded by the new framework. Again, from the Indy:

In previous guidance…ordinary countryside was given an explicitly recognised value in making planning decisions, but in the new NPPF, this has simply been dropped.

"If this goes ahead, it will be the biggest and most harmful change to the planning system since it was established 65 years ago, and a huge threat to the countryside," said Kate Houghton, of the CPRE.

The new plans do hold out some hope for the ability of local activists to oppose unwanted and detrimental planning applications. But having just been involved in such a campaign in my local area, I know what a draining battle this can be when residents are pitted against resourceful developers. And local plans can be drawn up to counter excessive construction, but the vast majority of the country is plan-less.

Even if the health reforms open the door for a flurry of ultra-competitive independent healthcare providers and private investment (and gosh, what a shock that would be for the decades-old system of privately owned GP surgeries), the NHS will not die.

The politicians may have gone about these reforms maladroitly, but no politician is stupid enough truly to abolish what Lord Lawson once referred to as “the nearest thing we now have to an established church”.

However, the Government’s new planning framework truly could destroy parts of our countryside, bit by bit, in an ignorant dash for economic growth.

I shall not doltishly declare the countryside dead, because nature will, in its own immutable way, outlive us all. But the nation’s 65-year old planning laws have succeeded in setting aside space for nature to thrive, away from man’s malefic designs.

Yet nature cannot survive buried underneath a new warehouse, however strong its spirit. And once gone, it’s gone.

Follow Nik on Twitter @NikDarlington

Progressive Conservatives should support a Land Value Tax

David Cowan 9.51am

In this year’s Macmillan Lecture, the Conservative MP Nick Boles proposed a series of ideas to improve Britain’s economic competitiveness. By far the most fascinating idea was a land value tax.

In the past it has usually been those on the socialistic Left and the libertarian Right who have advocated a land value tax (LVT). But Mr Boles is a prominent Conservative moderniser, founder of the Policy Exchange think tank, and known to be close to the party leadership.

The introduction of a LVT ought to be viewed as the most legitimate way to raise new revenue.

For too long, landowners and speculators have been able to reap sizeable economic outputs from rising land values, though contributing little economic input. One example being how the construction of the Jubilee line sent surrounding land values shooting up to £10 billion, to the benefit of landowners, while taxpayers still had to foot the bill.

The idea strikes to the heart of David Cameron’s vision of responsible capitalism:

“We need to reconnect the principles of risk, hard work, and success with reward”.

Another benefit of LVT is it would create a more stable and productive land market. There would be no benefit in owning land without utilising it since landowners would have to raise enough income to pay the LVT bill. The reduction in speculative activity would help drive down prices and rent, so ensuring that growth in the land market is based on sustainable and real returns instead of artificial and speculative booms.

LVT would also be a new ‘eco-tax’ that discourages construction on expensive ‘greenfield’ areas in favour of cheaper ‘brownfield sites’, so limiting urban sprawl. This brings the consequent benefits of reduced commuting distances and less costly road works, which contribute to CO2 emissions and atmospheric pollution.

However, Mr Boles’ LVT proposal should go a step further. Properties of all shapes and sizes are already overtaxed by the likes of council tax, business rates, stamp duty land tax, planning charges, and landfill tax. If these taxes were to remain then LVT would be burdening people with further unwelcome costs.

Instead, LVT should replace those property taxes - either entirely or at the very least mostly.

It would still raise sufficient revenue if pitched at the correct rate and included main homes, with exemptions for farmland, national parks, charities and pensioners’ main homes. The fact that LVT would also apply to land which at the moment is not taxed at all goes to show how it would raise more revenue than the current property taxes that place a heavy burden on ordinary homeowners.

This would be simple to implement since land cannot be hidden in an offshore tax haven and calculating the tax bill would be made easier by the fact that land values are already measured by the market, therefore compliance costs could be reduced. The same bureaucratic processes for collecting business rates could readily be translated to the collection of LVT.

The LVT would not harm enterprise. It would boost productivity, discourage urban sprawl, could replace the plethora of punitive property taxes, and would be relatively simple to administer and collect.

The extra revenue raised would be enough to fund a radical package of tax cuts to “put fuel into the tank of the British economy”, as George Osborne promised last year, and would reconnect the link between effort and reward by making sure everyone pays their fair share. This is very much a policy that ought to be part of any modern, progressive Conservative agenda.

Follow David on Twitter @david_cowan

Transport problems: Heathrow is the solution that dare not rear its head

Stuart Baldock 9.38am

The Government has put itself in a difficult spot with regards to solving the South East’s airport capacity problem - or more accurately the capacity issue at Heathrow.

Prior to the election, the Conservative party - it could be said foolishly - ruled out building a third runway at Heathrow. The Liberal Democrats - perhaps even more foolishly - have ruled out any capacity increase in the South East, including a new airport or additional runways at Stansted or Gatwick. Both policies are enshrined in the Coalition Agreement. Both Parties should reconsider.

Airports are as important to the modern UK economy as maritime ports were between the 18th and 20th centuries. At a time when growth in the economy is desperately needed, ignoring this fact is misguided at best, or reckless and incompetent at worst.

Success in this globalised world depends on one’s links to current and potential markets.

No matter how good teleconferencing has become, business is still done in person. Indeed, a report by Frontier Economics, an economic consultancy, found that UK businesses trade by as much as twenty times more with economies that have direct daily flights to the UK compared with those that have fewer or no services.

Lack of capacity is already estimated to cost the UK economy £1.2 billion each year. Heathrow is operating at nearly 100 per cent capacity.

The UK is far behind competitors when it comes to direct flights China. As shown below, the UK has significantly less flights to the main Chinese cities than Frankfurt and Paris. In the case of Guangzhou, the leading manufacturing region in China, there are no direct flights from Heathrow.


Frankfurt – 1032 


Heathrow – 698


Frankfurt – 1110

Paris – 1323

Heathrow – 621


Frankfurt – 211

Paris – 290

Heathrow – 0


There have been a number of solutions put forward to rectify London’s airport capacity problem:

  • Build extra runways at Gatwick and/or Stansted. Both schemes would be relatively cheap – at around £2.5 billion. But Stanstead is unlikely to attract a significant number of airlines due to its distance from London. The Stansted Express train connection could be up-graded but at significant cost. Also linking it with HS2 would be prohibitively expensive due to its distance from the intended high-speed route. The main issue with expanding Gatwick is a planning agreement with West Sussex County Council prohibits the building of a second runway until after 2019. Not ideal when the Heathrow is already operating at capacity.

  • Build a ‘Thames Estuary Airport’Lord Foster’s Isle of Grain scheme, the so called ‘Boris Island’, or an airport at Cliffe in Kent. The main issue with these schemes is the cost. The cheapest proposal is Cliffe at £14 billion. The other schemes are estimated in excess of £20 billion just for the airports, while another £30 billion may be necessary for associated transport infrastructure. There are also environmental and safety issues to consider: birds and airliners are not compatible. A 2003 report found that the risk of losing an aircraft to bird strike around a ‘Thames Estuary’ was between one in 100 or 300 years – significantly more than any other UK airport.

Heathrow is the best option from a point of view of speed, cost, and environmental sustainability.

An additional runway could be built relatively quickly and could cost around £9 billion - a substantial investment, but not as much as other schemes.

The question has to be asked, is it really ‘sustainable’ to close one airport in a suburb (which is what it would take to make many airlines leave Heathrow) and move it to ecologically important marshland? No.

Heathrow can - as indeed is planned - be easily linked with HS2 so that the benefits of a world class airport can be shared with the rest of the UK, not just the South East. A third runway may not be the most staightforward option politically, but it is the best option.

Follow Stuart on Twitter @stuartbaldock