Introduction: Reeves says Gatwick 2nd runway means investment and jobs
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Chancellor of the Exchequer Rachel Reeves is declaring that the government’s promise to “kickstart the economy” is underway, after Gatwick Airport’s £2.2bn second runway plan was approved yesterday.
Transport secretary Heidi Alexander has approved a plan under which Gatwick will move its emergency runway 12 metres north, enabling it to be used for departures of narrow-bodied planes such as Airbus A320s and Boeing 737s.
Alexander cleared the plan after Gatwick offered noise mitigation measures, plus stept to ensure a proportion of passengers will travel to the airport via public transport
Gatwick has estimated that the ‘shovel ready’ project will add 14,000 jobs and as much as £1bn in extra economic activity each year.
Reeves is upbeat about the economic benefits of the plan – which has been criticised by environmental groups – saying:
“A second runway at Gatwick means thousands of more jobs and billions more in investment for the economy.
“We are backing the builders, not the blockers. By slashing red tape and transforming the planning system to get Britain building again we are investing in this country’s renewal and building an economy that works for working people.”
The chancellor will be desperate to promote pro-growth measures ahead of her budget in November, where she faces pressures to cut spending or raise taxes to avoid breaching her fiscal rules.
One government source suggested last night that flights could take off from the new full runway by 2029.
Alexander’s decision has received a nod of approval from the opposition Conservative Party.
The shadow transport secretary, Richard Holden, welcomed the decision to approve Gatwick’s second runway, saying:
“If done with sensible mitigations, it will be a vital step towards driving economic growth, improving connectivity, and strengthening Britain’s position on the global stage. But let’s be clear, this decision should have been made months ago.”
The agenda
Key events
The British Chambers of Commerce has welcomed the transport secretary’s decision to approve plans for a second runway at London Gatwick Airport
Shevaun Haviland, director general of the BCC, points to the growth potential of the project:
“The go-ahead for London Gatwick’s Northern Runway Project creates a clear flight path for economic growth.
“The Gatwick project is a shovel-ready scheme to transform existing infrastructure and boost connectivity. Aviation is a critical growth sector, with firms in the region and across the UK directly benefiting from this project, through more jobs and supply chain opportunities.
“Gatwick’s Northern Runway project demonstrates the private sector’s commitment to investing in the UK’s long-term economic future.”
Elsewhere in the markets, shares in Porsche have tumbled by 6% after it dialled back plans for its electric vehicle rollout.
Porsche blamed weaker demand, pressure in key market China and higher U.S. tariffs on Friday night when it cut its profit outlook, and said the launch of some all-electric models will be delayed.
A wide-ranging product overhaul will delays some EV models in favour of hybrids and combustion engine cars.
Volkswagen, which owns a majority shareholding in Porsche, said it would take a €5.1bn hit from the plan. VW’s shares are down 5%.
Airline shares fall after cyber-attack
The Gatwick runway decision isn’t giving airline stocks an obvious lift this morning.
British Airways’ parent company IAG (-1.5%) and easyJet (-1.5%) are among the top fallers on the FTSE 100 share index in early trading.
The airline sector may be out of favour with investors after a cyber-attack hit check-in desk software over the weekend, leading to some delays.
Victoria Scholar, head of investment at interactive investor, says:
“The FTSE 100 has opened flat with airlines near the bottom of the index including EasyJet and BA’s parent company IAG after a cyber attack disrupted services at European airports this weekend.”
Map: Gatwick’s second runway
Opposition group Communities Against Gatwick Noise Emissions (CAGNE) said they plan to bring a judicial review of the decision “funded by residents and environmental bodies”.
The Gatwick Area Conservation Campaign (GACC) has also criticised the decision to expand Gatwick with a second runway.
Peter Barclay, chair of GACC, said (via Sussex World):
“This is a profoundly irresponsible decision that flies in the face of climate science, environmental evidence, and the interests of local communities. Expanding Gatwick Airport at a time when the UK is legally bound to reduce emissions is a betrayal of future generations.
“This flawed decision prioritises short-term commercial interests over the long-term environmental and social costs. It will worsen noise pollution, traffic congestion, and carbon emissions — all in an area already under pressure.”
GACC are fundraising for a legal challenge to the decision.
Residents affected by more noise from the second runway will be able to ask Gatwick to cover the costs for triple-glazed windows, PA Media reports.
Homeowners, living directly beneath the new flight routes who choose to sell could have their stamp duty and reasonable moving costs paid, as well as estate agent fees of up to 1% of the purchase price.
“A second runway at Gatwick is a disaster”
Environmentalist have slammed the government’s decision to approve a second Gatwick runway.
Green party leader Zack Polanski has said:
“Signing off on a second runway at Gatwick is a disaster. It ignores basic climate science and risks undermining efforts to tackle the climate crisis. Labour keeps wheeling out the same nonsense about growth, but at what cost? What this really means is more pollution, more noise for local communities, and no real economic benefit.
Expanding Gatwick is a tired, 20th-century answer to a 21st-century crisis. Labour’s obsession with ‘growth at all costs’ is driving us deeper into a climate breakdown and social inequality crisis.”
Rosie Downes, head of campaigns at Friends of the Earth, argues that the economic case for the expansion is ‘massively overstated’:
“With emissions from aviation rising as climate extremes increasingly batter the planet with more intense floods, droughts and wildfires, it’s a struggle to see how the government can conclude expansion at Gatwick is a wise move.
“The Secretary of State says a second runway is a “no-brainer” for the economy, but the economic case for airport expansion is massively overstated. Any growth in air passengers leaving the country is likely to mean more UK tourists using their spending power overseas than anything we might gain from visitors.
Introduction: Reeves says Gatwick 2nd runway means investment and jobs
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Chancellor of the Exchequer Rachel Reeves is declaring that the government’s promise to “kickstart the economy” is underway, after Gatwick Airport’s £2.2bn second runway plan was approved yesterday.
Transport secretary Heidi Alexander has approved a plan under which Gatwick will move its emergency runway 12 metres north, enabling it to be used for departures of narrow-bodied planes such as Airbus A320s and Boeing 737s.
Alexander cleared the plan after Gatwick offered noise mitigation measures, plus stept to ensure a proportion of passengers will travel to the airport via public transport
Gatwick has estimated that the ‘shovel ready’ project will add 14,000 jobs and as much as £1bn in extra economic activity each year.
Reeves is upbeat about the economic benefits of the plan – which has been criticised by environmental groups – saying:
“A second runway at Gatwick means thousands of more jobs and billions more in investment for the economy.
“We are backing the builders, not the blockers. By slashing red tape and transforming the planning system to get Britain building again we are investing in this country’s renewal and building an economy that works for working people.”
The chancellor will be desperate to promote pro-growth measures ahead of her budget in November, where she faces pressures to cut spending or raise taxes to avoid breaching her fiscal rules.
One government source suggested last night that flights could take off from the new full runway by 2029.
Alexander’s decision has received a nod of approval from the opposition Conservative Party.
The shadow transport secretary, Richard Holden, welcomed the decision to approve Gatwick’s second runway, saying:
“If done with sensible mitigations, it will be a vital step towards driving economic growth, improving connectivity, and strengthening Britain’s position on the global stage. But let’s be clear, this decision should have been made months ago.”
