Letter to George Osborne on airport expansion

01 February 2016

Rt Hon. Andrew Tyrie MP writes to the Chancellor, asking him to go further to back up the government’s economic case for an expansion of the UK’s airport capacity.

Chair's comments

Commenting on the correspondence, Mr Tyrie said:

"The robustness of the Airports Commission’s conclusions cannot be determined from the information available in the Davies report. Parliament has demanded more transparency over the environmental case. At least as important is the economic case.

In considering the economic case, the Commission created five scenarios for how the aviation sector and the global economy might develop. But it has provided figures on the costs and benefits of the runway proposals under just one of these. The absence of information on the costs and benefits under the other scenarios makes it impossible to assess the robustness of the economic case. Nor is it possible, on the basis of the figures published by the Commission, to tell if the potential economic benefits of the proposals differ significantly from one another. Nor can it be established whether the benefits are significantly different from the option of not building any new runways.

Furthermore, the economic case depends on the time horizon over which costs and benefits are measured. The Commission used a period of sixty years from the completion date of 2026. The Commission should be expected to be able to demonstrate the sensitivity of the costs and benefits to the choice of appraisal period. What about 30 years, or 40 years? This analysis is also currently lacking.

These may sound like arcane and technical points. They are not. Without adequate information on the robustness of the economic case, Parliament and the public will not be able to judge the merits of any decision the Government eventually makes.

And this decision matters. Getting it right will be important in determining whether or not Britain can compete globally. Decisions of such crucial economic importance cannot be left to the Department for Transport. So the Chancellor of the Exchequer should take the lead.

A decision as controversial as this – one that has bedevilled past Governments, in one way or another, for decades – requires as much transparency as reasonably possible for the basis of the decision. There is no excuse for not providing it. So this work needs to be done, and published, as soon as possible, and at least three months before any decision is taken."

Further information

Image: iStockphoto

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