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Economic case for airport expansion “opaque” says Parliament’s Treasury Committee Chair

4th February, 2016

The Chair of Parliament’s Treasury Select Committee, Andrew Tyrie MP, has written to the Chancellor of the Exchequer to set out his view that the economic case put forward by the Airports Commission was “opaque” and that Parliament and the public cannot be expected to judge the merits of airport expansion based on the Commission’s analysis alone.

The intervention from the chair of the cross-party select committee represents a new challenge to the work by the Airports Commission following the Environmental Audit Committee’s (EAC) report in 2015 which called on the Government not to give the go ahead to expansion until it could be confident that environmental conditions could be met. AEF contributed to the environment committee’s report through both written and oral evidence. Shortly after the EAC’s report, the Secretary of State for Transport, Rt Hon Patrick McLoughlin MP, announced the Government would delay its decision on a new runway in the South East until the summer while it carried out additional environmental analysis.

Commenting on his letter to George Osborne, Mr Tyrie argued that it is not possible from the Airports Commission’s analysis to tell if the potential economic benefits of Gatwick and Heathrow proposals differ significantly from one another, or from the option of not building any new runways. Mr Tyrie also said that the economic impacts of expansion should be assessed not just over sixty years but also in the more immediate future.

Need for “as much transparency as possible” Chair of the Treasury Select Committee, Andrew Tyrie MP

Mr Tyrie called for the Treasury to take the lead on the decision, calling for “as much transparency as reasonably possible”.

The letter includes a list of questions that Mr Tyrie had asked in Parliament but to which he received no answer, including one about the probability of the net economic impact of a new runway being zero or negative. AEF’s briefing, ‘The Airports Commission’s economic fudge’, emphasised the unreliability of the much quoted £147 billion of benefit figure. This briefing also highlighted that the output from the cost-benefit analyses by the Airports Commission were closer to zero when emissions were capped in line with climate change emissions and negative when the Department for Transport’s methodology was used.

AEF engaged with the Airports Commission throughout its three year process but found that ultimately the Commission’s analysis left significant environmental and economic questions for the Government to address.

Download: Letter from Andrew Tyrie MP to George Osborne

Image credit: Dave Heuts via Flickr