The Chancellor also mentioned that reforming the planning system would ‘make it easier to build big infrastructure projects, like a third runway at Heathrow’
Chancellor Rachel Reeves has stated that Heathrow Airport’s third runway can be completed within the next decade, as she aims to stimulate growth amid the UK’s bleak economic forecast.
She expressed her desire to see the long-delayed project finished by 2035, through a combination of ministerial support and planning system reforms that the Government is advocating for.
Despite media reports suggesting senior ministers’ apprehension due to potential clashes with the UK’s climate commitments, Ms Reeves assured that the entire Cabinet is “united” behind the plan. In a speech on Wednesday, she listed the third runway among several major projects the Government would back, all aimed at boosting economic growth nationwide.
When asked about the timeline for the new runway’s operation, she told BBC Breakfast: “I think we can get that done in a decade.”
On being questioned if this meant planes would be operational by 2035, Ms Reeves confirmed: “That is what we want to achieve and that is what Heathrow wants to achieve.”
Earlier, she had expressed her wish to see “spades in the ground in this parliament”, but said it was up to Heathrow to present plans by summer. The Chancellor also mentioned that reforming the planning system would “make it easier to build big infrastructure projects, like a third runway at Heathrow”.
While she professed “huge respect” for London Mayor Sir Sadiq Khan, she indicated disagreement with his opposition to a third Heathrow runway.
When questioned by LBC about whether Energy Secretary Ed Miliband, who is thought to be the Cabinet minister most opposed to Heathrow expansion, fully supported the plans, Ms Reeves replied: “Yes, we are all united as a Cabinet backing these plans.”
Despite having previously opposed the expansion of Leeds-Bradford Airport, Ms Reeves, who represents Leeds West and Pudsey, stated that she is now open to the idea of a new terminal if the owner “came back with plans to expand”. In her speech on Wednesday, Ms Reeves also pledged the Government’s support for boosting growth across the Oxford-Cambridge region, which she believes could become Europe’s equivalent of Silicon Valley.
She announced investments in the East-West Rail link, road upgrades, and new reservoirs, which could generate an additional £78bn for the economy by 2035. The Chancellor also confirmed the Government’s backing for the regeneration of Manchester United’s Old Trafford stadium, which will provide new homes and jobs in Greater Manchester.
However, amid these growth-focused announcements, several well-known businesses are preparing for layoffs ahead of the national insurance contribution hike announced in the Budget. Supermarkets Sainsbury’s and Tesco are among the household names making cuts before the rise, which businesses will start paying in April.
An influential think tank has issued a warning that Ms Reeves is teetering on a “knife edge” with her fiscal rules due to economic uncertainty and high interest rates. The Resolution Foundation’s latest findings suggest the Chancellor has scant leeway to balance the books between day-to-day spending and tax receipts over the next five years.
With further tax hikes and borrowing off the table, the Chancellor might have no choice but to slash public spending this spring to adhere to her own stringent guidelines and keep market confidence steady, according to the think tank. Meanwhile, Downing Street has kept mum on whether Heathrow Airport’s anticipated third runway proposal, expected by June, will trigger a parliamentary vote.
“We’re focused at the moment on these initial stages, which is to invite proposals from Heathrow, and then for the Government to update the airport national policy statement,” said the Prime Minister’s official spokesman to the press.