Reeves Wants ‘Spades in Ground’ on Heathrow Project Before 2029
(Bloomberg) -- Chancellor of the Exchequer Rachel Reeves said she wants construction work to begin on a third runway at Heathrow Airport before the next election is due in 2029, a day after giving the green light to a controversial project that’s divided her governing Labour Party.
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“Spades in the ground in this Parliament,” Reeves said in an interview with Bloomberg TV on Thursday, when asked about the potential timing of the expansion. “We’ve asked Heathrow to come forward with plans by this summer.”
Government support for the project at Europe’s busiest airport was among a slew of infrastructure initiatives outlined by the chancellor on Wednesday in a bid to lift the UK’s moribund economy. Her growth plans also include pushing ahead with renewable energy, roads, railways and reservoirs, along with pursuing an economic reset with the European Union and building on the so-called special relationship with the US under Donald Trump.
Reeves’ growth speech came against the backdrop of a flat-lining economy, dips in both consumer and business confidence, job cuts at major retailers and stagnant private sector activity. She’s come under pressure to win back the support of businesses after she hit them with a £26 billion ($32 billion) payroll tax hike at her budget in October.
The initial response to her speech was positive from executives: a snap poll of 522 business leaders by consultancy WPI Strategy found that almost two-thirds were more confident than before that her plans would drive investment.
Businesses are “backing Labour’s plans to grow the economy,” Reeves said. They’re “making them feel more confident about the future,” she said.
Nevertheless, there was some push-back from airline bosses against that view. Ryanair Holdings Plc CEO Michael O’Leary described the chancellor’s plans as “rubbish,” while Wizz Air Holdings Plc boss Jozsef Varadi said alternative measures were needed. Neither airline currently uses Heathrow.
“This is a dead cat she’s throwing up on the table to mask the fact that she has no growth plan,” O’Leary told Bloomberg TV, using a phrase that describes a political distraction tactic. “She knows a third runway at Heathrow won’t be delivered until about 2040, possibly even 2050 if at all.”
Varadi, meanwhile, told Bloomberg TV that “if a country wants to boost airline traffic it needs to look at taxation, it needs to look at the cost of operations.”
Reeves also said she had written to new US Treasury Secretary Scott Bessent, and that she looked forward to speaking to him soon and having a close relationship.
--With assistance from Anna Edwards and Guy Johnson.
(Updates with survey, reaction from airline bosses, starting in fifth paragraph.)
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