UK Business News

In a new paper released today, The Case for Aviation, Kwasi Kwarteng MP calls for a new planning compensation system to tackle the problems stopping the development of our aviation industry. He argues:

• London is falling behind other European cities. Paris and Frankfurt enjoy 1,000 more annual flights to the three largest cities in China than Heathrow.

• Lack of access to emerging markets could already be costing the economy £1.2bn a year. In 1990, Heathrow’s route network reached 227 destinations. It is now down to 180, and is forecast to drop to 147.

• Demand is set to double over the coming decades, while our airports are already near capacity, with Heathrow 99% full and Gatwick 95% full. The economy cannot afford to wait the thirty years it would take to build a new airport.

• Expanding our current airports is the only viable option in the short to medium term. To deliver growth, airport operators should be enabled to build at least one more runway in South East England by 2020 – either Stansted, Gatwick or Heathrow.

• Government should expedite this by allowing compensation to be paid directly to affected residents for this critical infrastructure project. The industry needs a more flexible planning system. Decisions should be made by the price mechanism and free competition rather than special interests and political grandstanding.

• Government has a poor track record both at judging the future demands of consumers, and at estimating the costs of large infrastructure projects. This approach would leave the industry free to respond to market demand and to judge for itself the relative costs and benefits of the different options.

Commenting on the report, its author Kwasi Kwarteng MP said:

“Creating a system of compensation as part of the planning system will remove a major obstacle to growth in Britain. Governments aren’t good at working out the best options for large infrastructure projects, but the current system makes it hard for businesses to pursue these projects.

The need to expand our airports is now reaching crisis point. If consensus cannot be reached, and building does not commence in the next few years, London will inevitably fall further behind its European rivals.”