Chancellor Rachel Reeves announces backing for third Heathrow runway
The government supports a third runway at Heathrow, Chancellor Rachel Reeves has announced.
Ms Reeves said the expansion of Europe’s busiest airport was “badly needed” to connect the UK to the world and open up new opportunities for growth.
A third runway will “unlock further growth, boost investment increase exports and make the UK more open and more connected”, she said.
Politics latest: Reaction to third runway decision
It could increase potential GDP (Gross Domestic Product) by 0.43% by 2050 according to a Frontier Economics study, she said. 60% of that boost would go to areas outside London and the southeast, increasing trade opportunities like Scotch whiskey and Scottish salmon, she added.
Ms Reeves said an expansion could create more than 100,000 jobs.
The announcement has been welcomed by some business groups but has been met with anger from London’s Labour mayor Sadiq Khan, the Lib Dems, the Green Party and environmental groups.
Conservative leader Kemi Badenoch told Sky News over the weekend she supports a third runway.
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A plane taking off from Heathrow Airport. Pic: PA
As part of a speech on funding infrastructure across the UK to promote growth, Ms Reeves said: “Persistent delays have caused doubts about our seriousness towards improving our economic prospects.”
She added that business groups like the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB) and the Chambers of Commerce (BCC), as well as trade unions “are clear – a third runway is badly needed”.
‘Britain is a country of huge potential that is untapped’
Speaking afterwards to Sky’s economics and data editor Ed Conway, Ms Reeves said: “I want Britain to be a magnet for foreign investment… we should be welcoming the best businesses and the best talent in the world. I want businesses around the world, investors around the world, to see in Britain, what I see, which is a country of huge potential that is untapped.”
The chancellor also spoke of helping British companies to scale up.
She said: “We are introducing the capital market reforms, particularly around pension reform, unlocking £80bn of long-term patient capital by creating these mega funds, the mergers of defined contribution and local government pension schemes, to create those larger funds that can invest at scale in the exciting opportunities in the UK.
“Building on what countries like Australia and Canada do with their big pension funds, to support British industry, and particularly that stage of a business career when they’ve had the start-up and the seed funding, but now they’re looking to scale up, but they find that the access to finance isn’t available in the UK, and often look, to example, for the United States.”
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Britain has ‘huge potential’
Investments in green aviation fuel
Ms Reeves said in her speech that the UK is “already making great strides in transitioning to cleaner and greener aviation” and announced the government is investing £63m over the next year into the Advanced Fuel Fund grant programme to support the development of sustainable aviation fuel production plants.
The government will be accepting proposals until the summer and will then carry out a “full assessment” through the Airport National Policy Statement to “ensure a third runway is delivered in line with our legal, environmental and climate objectives”.
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Three main points from chancellor’s big speech
Ms Reeves said the government expects any associated surface transport costs to the third runway’s construction to be financed through private funding.
She added a decision on plans to expand Gatwick and Luton, which are currently under way, will be made by the transport secretary “shortly”.
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A long history of Heathrow’s third runway plans
Green groups criticise Heathrow campaigner’s role in Labour policy creation
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A decades-old debate
The debate around whether Europe’s busiest airport should expand has been circling over British politics for decades.
Ms Reeves’s decision will likely put her at odds with Climate Secretary Ed Miliband, who has said airport expansions will not go ahead if they cannot meet climate targets.
However, he said last week he would not resign if the government approved a third runway despite threatening to resign from Gordon Brown’s cabinet as climate change secretary in 2009 over the plans and in 2018 he said an expansion was “very likely” to make air pollution worse.
He has now said the government can meet both its growth and net zero missions together.
Labour’s London mayor Sadiq Khan has opposed the government’s plan
London mayor opposes runway
Sadiq Khan said he remained opposed to a third runway “because of the severe impact it will have on noise, air pollution and meeting our climate change targets”.
He said he will carefully scrutinise any new proposals, “including the impact it will have on people living in the area and the huge knock-on effects for our transport infrastructure”.
“Despite the progress that’s been made in the aviation sector to make it more sustainable, I’m simply not convinced that you can have hundreds of thousands of additional flights at Heathrow every year without a hugely damaging impact on our environment,” he added.
Heathrow is right next to large residential areas. Pic: PA
Green Party MP Sian Berry said expanding airports “in the face of a climate emergency is the most irresponsible announcement from any government I have seen since the Liz Truss budget”.
Conservative shadow chancellor Mel Stride accused Ms Reeves and Sir Keir Starmer and “their job-destroying budget” of being “the biggest barriers to growth”.
“What’s worse, the anti-growth chancellor could not rule out coming back with yet more tax rises in March,” he added.
“This is a Labour government run by politicians who do not understand business, or where wealth comes from. Under new leadership, the Conservatives will continue to back businesses and hold this government to account.”
The Bishop of Liverpool has announced his retirement days after facing allegations of misconduct from two women, including another bishop.
One woman said the Right Reverend Dr John Perumbalath kissed her without consent and groped her, while the second accused him of sexual harassment.
The bishop has vehemently denied the allegations – and in his retirement letter, published online on Thursday, he reiterated his denial.
The letter, shared by the Diocese of Liverpool, read: “Having sought the permission of His Majesty the King, I have today taken the decision to retire from active ministry in the Church of England.”
Addressing the accusations, he continued: “Since those allegations were made I have consistently maintained that I have not done anything wrong and continue to do so.
“I do not wish this story to become a distraction for this incredible diocese and its people whom it has been an honour and joy to serve,” the bishop says in his letter.
“This is not a resignation occasioned by fault or by any admission of liability.”
The exact date for when the bishop’s role will formally end is yet to be decided, but he is stepping back from ministering and leading the diocese as of Thursday.
The letter continued: “I have taken this decision for my own well-being, my family and the best interests of the Diocese.
“I have informed the Archbishop of York of my decision and I understand he will put in place the necessary arrangements for episcopal oversight of the diocese for the remainder of my time here and during the vacancy.”
Bishop Perumbalath has insisted his retirement is not an admission of guilt
The Archbishop of York Stephen Cottrell – who has faced calls to resign over separate safeguarding failures – said: “I respect his decision and thank him for his ministry.”
“My thoughts and prayers continue to be with all those who have been affected by this situation,” he continued. “I am committed to ensuring stability during this time of transition and will be putting the necessary arrangements in place to provide episcopal oversight for the diocese.”
An acting bishop will be announced in the coming days.
The Archbishop of York (pictured) has welcomed the decision – which comes at a tumultuous time for the Church of England
The diocese – which on Wednesday pressured the bishop to step aside – said in a statement: “We acknowledge his decision in taking this step for the good of the Diocese of Liverpool.
“This is a deeply painful situation, and we hold all concerned in our prayers.”
The misconduct allegations were reported by Channel 4 earlier this week but the first dates back to 2023, the Church of England confirmed.
It said: “The complaint was looked into according to statutory safeguarding guidance… and an independent risk assessment undertaken.
“This process concluded that there were no ongoing safeguarding concerns, but a learning outcome was identified with which the bishop fully engaged.”
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A “further disclosure was made by another woman” shortly after, the Church said. This was “assessed not to be a safeguarding matter but a matter of alleged misconduct,” it added.
Bishop Perumbalath’s resignation comes at a tumultuous time for the Church of England, which has recently seen Justin Welby quit as Archbishop of Canterbury over the handling of another case.
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