Reeves expected to welcome Heathrow expansion plans

According to the British Broadcasting Corporation (BBC), Chancellor of the Exchequer Rachel Reeves is expected to announce her support for the expansion of Heathrow Airport when she unveils Labour's latest economic growth plan on Wednesday. This move is seen as a significant step by the Labour Party to promote economic growth.

Encouraging the planning application for the airport's third runway in principle will mark the first stage of the process. This announcement is likely to anger environmental activists, including those within the Labour Party, who have opposed the third runway for decades, citing environmental concerns. The Conservative Party has criticized Labour's plan as a "hasty patchwork."

In an article in The Times, Prime Minister Keir Starmer stated that a broader government plan would "clear away the barriers to building, clear away the regulatory weeds, and let a new era of growth in Britain flourish." The third runway at Heathrow would cost tens of billions of pounds and take more than a decade to complete. In addition, expansion plans for Gatwick and Luton airports, as well as the redevelopment of the area around Manchester United's Old Trafford stadium, may also be confirmed in the speech.

The speech will also focus on development between Oxford and Cambridge to create a "Silicon Valley of Europe." The Heathrow announcement comes weeks after Labour hinted at its support for the controversial airport expansion plan. Reeves told the BBC on Sunday that she would not comment on "speculation," but added that "sustainable aviation and economic growth go hand in hand." The government cannot prejudge the outcome of a formal planning application for a specific runway option, and the BBC understands that no public funding for the project will be announced on Wednesday.

Heathrow has long argued that expansion is crucial to help it keep pace with competing European airports, which handle more passengers with fewer runways. In December last year, the airport's chief executive said it needed "clear direction" from the government by the end of 2025 to move the plans forward. However, questions remain about who will fully fund the works on the M25 motorway around London and other transport links. This road may need to be diverted through a tunnel under the third runway. Another potential obstacle is how much of the early development costs the Civil Aviation Authority (CAA) will allow Heathrow to pass on to airlines. Many airlines have already expressed concerns about the potential costs. The CAA was one of the regulators that presented to the Chancellor earlier this month on how to promote growth.

Furthermore, how Reeves' own party might react to the third runway at Heathrow is also a question. The office of London Mayor Sadiq Khan told the BBC that he has "long opposed airport expansion around London" due to its impact on air quality and noise. The government hopes to develop thousands of homes and a new rail link in the area between Oxford and Cambridge. The government will also review the so-called "Green Book" rules, which are guidelines issued by the Treasury on how to evaluate policies, plans, and projects. The government says these rules have historically favored infrastructure spending in areas that are already growing rapidly, mainly in the south.

A senior minister said they were making significant long-term decisions that previous governments had ignored, and they knew "the benefits won't be realized until after this parliament, but these are the right long-term decisions." The Treasury is confident that "there will be shovels in the ground before then." A senior minister said the key difference was that the government would show that when the growth agenda conflicted with other things, they would "make the tough decisions." Labour has been talking about the importance of economic growth in the months before and since the last general election. Reeves has previously said that large projects like Heathrow need to be pushed forward to help the UK economy grow.

However, despite the government's rhetoric on growth, the economy remains sluggish. Figures for January showed the economy grew in November, but the 0.1% increase was less than expected. The economy is faltering, and critics argue that ministers made things worse with their pessimism over the summer and autumn. Some ministers have privately admitted they were wrong in hindsight. Now, they seem to be making up for lost time by constantly referencing growth. The Conservative Party has hit back at Labour's growth plan. Shadow Chancellor Mel Stride said: "The biggest barrier to growth in this country is Rachel Reeves, Keir Starmer and their job-destroying budgets. A hasty growth statement in the 2030s is no help to businesses that are laying people off now."

Liberal Democrat Treasury spokesperson Daisy Cooper said: "Trying to boost growth without fixing our trading relationship with Europe is like driving a car with the handbrake on." The Liberal Democrats are calling for a "new UK-EU customs union, which would provide a rocket boost to the economy."