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Heathrow expansion could give British economy £1.5bn ‘Brexit boost’

Oct 05, 2016

LONDON, England - The benefits of Heathrow expansion could be delivered four years early, giving the British economy a £1.5bn ‘Brexit boost’ whilst a third runway is built, according to new proposals to be launched on the first day of the upcoming Conservative Party Conference.

The measures, which are subject to consultation, show that Heathrow could get more British exporters connected to more global growth when Britain leaves the EU by adding up to 25,000 additional movements on the existing runways in 2021, after permission is granted for a third runway.

As well as adding vital extra capacity on existing routes, the end of EU regulation offers an opportunity to ring-fence some of the new slots for “Brexit Boost Routes” including new domestic connections such as Humberside, Dundee, Newquay or Liverpool and new long-haul trade routes to growth markets such as Osaka, Kochi, Wuhan and Quito.

To help establish new domestic connections, Heathrow is proposing an extension of its existing £10 ‘domestic passenger discount’ for all flights to UK airports until 2037, as long as there is justification and it is deemed to be in the public interest. It will also bring forward its £10m ‘route development fund’ to 2021.

These measures will enable all of Britain to capitalise on new market opportunities in the early months of Brexit, supporting small and large exporters, boosting competition and reducing prices to consumers. They have been welcomed by airports across the country:

Andrew Cornish, CEO of Liverpool John Lennon Airport said:

“Heathrow is the UK’s hub airport. A route there would enable Liverpool to have onward connections to every continent of the globe as well as easy access to London. Liverpool has missed out on this link for over 24 years, not because there isn’t demand but because Heathrow is full. Expansion at Heathrow will create the additional capacity to help secure this important link and ensure we bring tourists and investment into Liverpool from new, growing markets outside of Europe. That’s why Heathrow expansion is the right choice for the North West.”

Updated research by Frontier Economics has identified indicative examples of 40 new long-haul trading routes with Heathrow expansion. With more than 30 airlines queuing to operate at Heathrow, only the UK’s hub has the high demand for slots to deliver these economic benefits in the early months of Brexit.

Assuming Brexit occurs in 2020, new analysis by Frontier Economics and evidence from the independent Airports Commission study shows Heathrow would create around £55bn more growth than an expanded Gatwick in the crucial 15 years after leaving the EU, with Heathrow generating up to £60bn in growth and Gatwick generating only £4bn in the same period. Early flight expansion could also deliver up to 5,000 extra on-airport jobs for local people.

Heathrow will work with airlines to ensure that expansion is delivered cost efficiently. All of Heathrow’s commitments to meet and in most cases exceed the Airports Commission’s conditions, would be protected.

Commenting, Heathrow CEO John Holland-Kaye said:

“This Brexit Boost Plan is our commitment to making Britain stronger and fairer for everyone – faster. It would generate around £55bn more in growth than Gatwick in the early years of Brexit. Our proposals for an additional 25,000 flights a year from 2021 would help businesses and families from Newquay to Dundee benefit earlier from Heathrow expansion, while protecting our commitment to meet and exceed the Airports Commission’s environmental conditions.

Heathrow’s third runway is the only option that can help every nation and region of Britain realise the opportunities of Brexit. The Prime Minister and the Government can now to make the right choice, and back Heathrow expansion.”

As the UK’s largest port by value, Heathrow is a unique national asset. It currently handles 29% of non-EU exports by value, compared to Gatwick’s 0.2%. With expansion Heathrow proposes to double its current cargo capacity, enabling businesses across the UK to increase their exports and realise the opportunities of Brexit.

Heathrow expansion already has the support of small and large businesses right across the UK and is the favoured option of the majority of MPs. According to the independent Airports Commission, a third runway will create up to 180,000 jobs, four times more than Gatwick, and up to £211bn of economic growth.

Mike Cherry, Federation of Small Businesses National Chairman said:

“We have been working with Heathrow on the announcements today, which will be warmly welcomed by small businesses across the UK.

“Our members have pressed for commitments to greater connectivity to our regions from the UK's hub airport, and so the pledge to ring-fence routes and the prospect of more domestic destinations is a significant step forward.

“As we face a new post-Brexit world, the new capacity for freight cargo and exports are essential to open up potential new overseas markets for British business.”

Chris Davies, Conservative MP for Brecon and Radnorshire said:

Brexit presents a wealth of opportunity to British businesses and the first few years are critical. Heathrow is our hub airport and our biggest port. If we want to make the most of new deals with growing economies outside of Europe then we’ve got to get on with expanding Heathrow. Today’s announcement means we can get the connectivity we need the moment leave, meaning Britain gets the biggest Brexit boost possible.

Roberta Blackman-Woods, Labour MP for the City of Durham said:
“As we face a new post-Brexit world, the new capacity for freight cargo and exports are essential to open up potential new overseas markets for British business.”

“The proposals from Heathrow that will help to boost the vital air-link from Newcastle Airport that connects the North East to the world are to be very much welcomed.

Connectivity with Heathrow is vital for economic growth and expanding tourism in the North East and is necessary to help our businesses compete globally. The government must acknowledge the link between stronger regional growth and expanding Heathrow and approve the third runway as soon as possible.”

Only Heathrow expansion can make Britain stronger in the world economy, and fairer for everyone by connecting Britain’s cities to global growth at a price airlines and passengers can afford.

Heathrow expansion could give British economy £1.5bn ‘Brexit boost’



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