UK Government backs third Heathrow runway in move Chancellor says will boost Scottish exports

The UK Government has announced backing for a third Heathrow runway that the Chancellor has claimed will deliver a boost to Scottish exports.

Rachel Reeves outlined a series of measures ministers on Wednesday that she hopes will boost Britain’s flagging economy, including new trade deals, more investment, and ripping up environmental regulations that hamper construction.

Her announcements were greeted with optimism by Scottish business groups - but the SNP argued Labour was taking the economy in the wrong direction.

Speaking in Oxfordshire, Ms Reeves gave a notably upbeat assessment of the UK’s economic prospects saying the Government had “begun to turn things around”.

She said: “We have fundamental strengths in our history, in our language and in our legal system to compete in a global economy, but for too long that potential has been held back. For too long we have accepted low expectations and accepted decline.

“We no longer have to do that. We can do so much better. Low growth is not our destiny, but growth will not come without a fight, without a government willing to take the right decisions now to change our country’s future for the better.”

Ms Reeves said the Government wanted proposals for a third runway to be produced by the summer, which will then face a full assessment through the airport national policy statement to ensure it “is delivered in line with our legal, environmental and climate objectives”.

There was also a promise over what this could do for Scotland, with Ms Reeves claiming it would boost Scotch whisky and Scottish salmon exports. Scottish salmon is Heathrow’s biggest export by weight.

She said: "According to the most recent study from frontier economics, a third runway could increase potential GDP by 0.43 per cent by 2050.

"Over half - 60 per cent - of that boost would go to areas outside of London and the South East in creating increasing trade opportunities for products like Scotch whisky and Scottish salmon, already two of the biggest British exports out of Heathrow."

Ms Reeves explained the Government would be “guided by one clear principle, above all, to act in the national interest for our economy”, adding: “That means building on our special relationship with the United States of President Trump.”

The Chancellor said the major infrastructure project would spur growth in the UK’s ailing economy and support 100,000 jobs.

Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, welcomed the move but said the Chancellor must ensure Scotland plays a role in the runway’s creation.

The Scottish Government said expansion must not come at the expense of long-haul flights to Scotland or result in more centralisation of the economy to London and the South East of England.

Ministers have previously backed the plans, with Heathrow saying it would result in 16,000 Scottish jobs and £14 billion in growth.

Dr Cameron urged Labour to make good on previous commitments for the construction of a new supply chain hub in Scotland where materials would be pre-assembled before being sent to London.

She said: “Direct access to the airport’s biggest suppliers allows us to provide a pipeline of expertise, and will provide Scottish business with the credibility and leverage to secure work on other projects both in the UK and internationally.

“What will also be key is making sure we have increased domestic connectivity to Scotland and more direct flights, helping us provide the national and international connectivity vital to economic growth.”

Chancellor Rachel Reeves giving a speech on economic growth. PIC: Peter Cziborra/PA Wire

Dr Cameron said investment in infrastructure “must be delivered as part of a wider strategy for the development and investment to follow”.

Scotland’s Deputy First Minister welcomed the announcement but said she was “deeply disappointed in the lack of any initiatives which would directly benefit Scotland” in the Chancellor’s speech.

Kate Forbes said: “For instance, there is no mention of Grangemouth and I am concerned that UK Government investment is being further concentrated in prosperous areas in the South East of England and around Oxford and Cambridge. This will deepen concerns that Scotland is being treated as an afterthought by this UK Government.

“The Scottish Government is focused on delivering economic growth and jobs. For example, we are committing up to £500 million over five years to boost private investment in the offshore wind supply chain by up to £1.5 billion, while this week the First Minister signed an agreement with the City of London Corporation to bolster Scotland’s finance sector and secure further investment.”

A spokesperson for the Scottish Government said ministers “need to understand the wider economic impact of Heathrow expansion on Scotland”, before adding: “Any further centralisation of economic growth to the South East of England would be unacceptable.

“Enabling or supporting the expansion of any airport in the south of England must not make the potential for long haul growth to service Scotland’s trade, tourism or connectivity more challenging.

“The Scottish Government signed a memorandum of understanding (MoU) with Heathrow Airport in 2016, with the aim of ensuring that Scotland would benefit from this major infrastructure project. Given the UK Government’s announcement this morning, we would like to see that MoU reviewed.

“The Scottish Government will engage with the UK Government and Heathrow Airport to understand any potential impact of the Heathrow expansion on Scotland, particularly on our climate targets and connectivity.

“We would also welcome more UK Government support to develop low-carbon aviation in Scotland, including the production of sustainable aviation fuel.”

But the Scottish Greens condemned the decision to back a third runway, with transport spokesman Mark Ruskell saying it will be a “disaster for future generations”.

He said: “This is yet another climate-wrecking decision from a Labour Government that is determined to fund so-called ‘economic growth’ by pouring billions of taxpayers’ money into the pockets of private companies.

“A third runway will be a disaster for future generations; increasing carbon emissions at this crucial time for our planet’s future is nothing but climate vandalism. Transport emissions across the UK are still far too high; we need to invest in reducing them through cheap and efficient public transport.

“Instead of forcing an unnecessary new runway, we could connect cities across the UK with cheap and effective high-speed rail, cutting the cost of commutes and our national carbon emissions, whilst also funding regional-rail expansion, restoring rail connectivity to communities across Scotland.”