Theo Leggett
Commercial correspondent
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This is a key week for the government and its commitment to develop the British economy.
On Wednesday, Chancellor Rachel Reeves is expected to announce plans for a third track at Heathrow Airport as part of measures to propel investment and unravel a certain life in the Dulne performance of Great Britain.
Growth, reeves will repeat, is priority.
But widen the largest airport in the country the right way to bring an immediate boost to the economy?
In terms of real bsages in the ground at Heathrow, the short response is no.
A third track has been on the cards for many years. It has also been launched in long herbs several times.
The argument in favor has always been economical. Large airports create jobs, promoted trade and attract both business travelers and tourists.
Heathrow currently manages 200 billion pounds sterling of exchanges per year and – The owner of the airport supports – provides a vital avenue for exports, in particular for small and medium -sized enterprises.
But Heathrow’s infrastructure is trying to seams.
Last year, a record of 83.9 million passengers crossed its terminals with its two slopes with approximately 1,300 landings and takeoffs every day.
Airport flights are currently capped at a maximum of 480,000 per year and, in terms, it has reached this limit.
A third track would potentially increase the number of flights authorized to 720,000.
The widening of the airport would theory provide an avenue of growth in theory which is simply not there for the moment.
The construction project itself – the largest private funded infrastructure system in Europe – would create thousands of jobs.
But a third track in Heathrow is unlikely to become a reality for many years.
First, an official planning process must take place. This type of major infrastructure project would require a development consent order and unless the government changes the planning process, this would take between 18 months and two years.
Second, it is very likely that any decision in favor of a third track would be subject to a judicial examination.
Heathrow’s expansion is very controversial – opponents include environmental groups, local authorities as well as residents nearby, and this stage could spend a year and a half.
Thus, even with favorable winds, he could take at least three years to go to the construction phase which should take another six or seven years.
In terms of what can be achieved earlier that could potentially create bancable short -term advantages, separate projects to extend Gatwick and Luton airports are well advanced and could be signed by the transport secretary in a few weeks.
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The real value of supporting a third track in Heathrow is the less tangible but no less important signal for investors in the attitude of the United Kingdom with regard to the main infrastructure projects, say supporters.
Uncertainty about the construction of the HS2 high -speed line under the previous conservative government is largely considered to be a confidence in the country’s ability to transform ambitious plans into reality.
A strong commitment to the expansion of Heathrow could help to reverse this perception.
The plan itself which should cost nearly 20 billion pounds sterling, the initiates claim that the government’s support will be vital if it goes forward.
Although the project is funded by private private people, people close to the program warn that it could not take place without close coordination with ministers – including the modifications of the political framework which explain how investment costs can be recovered.
For the Chancellor herself, there could be a short-term advantage to launch his weight behind the airport expansion plans now.
Some economists have argued that if additional growth can be taken into account in the economic forecasts currently being prepared by the Office for the Budget Responsibility, this could allow it to more easily respect the self-imposed tax rules within of this Parliament.
Otherwise, then Reeves is likely to run away on its own tax rules of “iron” to pay the daily expenses of tax receipts by 2029 – which means reductions in expenditure or more and more increases in Taxes.
Additional Dirbail Jordan report.
