By Adam Marshall
Britain today stands at a crossroads, and needs to decide whether it wants to continue to be at the heart of global transport and trade routes, or a second rate destination at the end of a branch line.
Nowhere is this more visible than in aviation policy, where political short-termism is winning the day. Despite acknowledging that a lack of aviation capacity could constrain growth, the government continues to consult and prevaricate, rather than act decisively. Potential solutions to the capacity crunch, starting with the proposed third runway at Heathrow airport, have been kicked into the long grass. Yet while Britain dithers on decisions around how to boost capacity, others do. Foreign competitors are forging ahead on new air links while we sit and twiddle our thumbs. Continued delay risks leaving the UK at a competitive disadvantage to its global competitors.
Heathrow itself has been a political football for years now. MPs from all parties whose constituents are affected by it line up to oppose its expansion. Yet, given that so many of their constituents draw their livelihoods from the immense business hub surrounding Heathrow, the very same MPs complain just as vociferously at any suggestion to move its activities elsewhere.
The aviation debate has become so politicised that many in the Palace of Westminster seem to throw their own deficit reduction mantra away when thinking about aviation, breezily mentioning £40-60 billion in public investment for a new airport somewhere else, rather than accept the £10 billion in private sector investment lined up and ready to go at Heathrow.
British business has long had a consistent and clear position. We want to see more aviation capacity in the South East, starting with Heathrow; moves to improve the attractiveness of our main regional airports; and active support for the development of feeder routes from smaller cities into our global hub – so that UK businesspeople can trade the world efficiently and seamlessly.
What so many MPs and peers don’t seem to understand is that the clock is ticking, and that we need to take action now. A recent survey of business leaders revealed that the UK will miss out on investment because of poor air connections. Business leaders in high growth or emerging economies see direct air links as vital to maintaining the UK’s prospects in global markets. Nine out of ten (92%) of these business leaders say direct flights influence their inward investment decisions; while eight in ten (80%) say they would trade more with the UK if flight connections were improved to their home markets.
The UK’s aviation connectivity crunch already means that exporting businesses are missing out on new routes from the UK’s global hub to emerging market destinations such as Manila, Guangzhou, Mexico City and Jakarta. Twenty-one emerging market destinations now have daily flights from Continental European hubs but not from Heathrow. This lack of connectivity comes at an estimated cost of £1.2 billion a year in lost trade. UK businesses trade 20 times as much with those countries that have daily direct flights to compared to those countries that have less frequent or no direct services. Paris and Frankfurt already have 1,000 more flights each year to the three biggest Chinese cities than London and almost double the number of flights from Heathrow.
To date, the debate has focused overwhelmingly on passenger flights at the expense of air freight. Huge percentages of British exports, especially those that are high-value and time-sensitive, pass through Heathrow and other key UK airports on their way to customers around the globe. Lack of expansion at Heathrow and elsewhere in the South East would undermine a key link in our global trading network, just at the time when politicians are exhorting businesspeople to get both themselves and their wares onto aircraft to sell into foreign markets,
Infrastructure is the lifeblood of British business. Air links are no exception. Ministers want new infrastructure funded by the private sector. But they’re missing the one option staring them right in the face. A privately funded third runway at Heathrow would add much needed capacity in the short to medium term, and should be progressed as swiftly as possible. However, Heathrow expansion is just the first component of a long-term aviation strategy for the UK. Ministers will need to take tough decisions on even more runways in the South East of England, whether at Gatwick and Stansted or at an entirely-new facility, and they will have to travel the world to cheerlead for the development of new routes into places like Birmingham, Belfast and Bristol.
British business is nearing a ‘connectivity crunch’ that will prevent companies from all parts of the UK linking up with the growing markets of the future. Expanding Heathrow now, with a cross-party aviation strategy that sets the tone for the next fifty years of aviation in the UK, would benefit thousands of firms – and help jump-start economic growth in the months and years to come.
Dr Adam Marshall is the director of policy and external affairs, British Chambers of Commerce. Follow him on Twitter.
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