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Chancellor Rachel Reeves has said continued growth ‘trumps’ the Government’s commitments to net zero emissions, as she prepares to signal support for the expansion of London area airport, including Heathrow.
Speaking at the World Economic Forum in Davos, the Chancellor described growth as UNITED KINGDOM the “number one mission” of the government.
Asked what she would do if faced with a choice between economic growth and the UK’s 2050 net zero target, Reeves replied: “If that’s the number one mission, it This is obviously the most important thing. »
His comments come as the Government considers its support for plans to expand Luton and Gatwick airports, as well as whether to give approval to a controversial third runway at Heathrow.
The possibility of Heathrow expansion threatens to divide the government and will force the government to choose between its stated aims of supporting “growth” and reducing the UK’s carbon emissions.
The chancellor said on Wednesday the government had already approved the expansion of City and Stansted airports, which also serve the capital, signaling this government’s “commitment to making Britain a significant trading nation”.
Speaking earlier at an event in Davos, Reeves said: “When we say that growth is the number one mission of this government, we mean it. That means it trumps other things.
She is expected to signal in a speech next week that the government supports the expansion of Gatwick and Luton airports, while reaffirming its support for a third runway at Heathrow.
Heathrow’s expansion had already been opposed by Prime Minister Sir Keir Starmer and several senior Labor figures.
Some Whitehall officials believe Reeves, a supporter of Heathrow expansion, is trying to convince Starmer to publicly endorse a third runway. “That’s not my assessment,” said an ally of the prime minister.
Starmer, when asked about the issue in the House of Commons on Wednesday, refused to comment on the “speculation”, adding: “As a government we are committed to growth. We are committed to the aviation sector and to our climate obligations.
In theory, Reeves reiterating his support for Heathrow’s third runway could be the political signal airport management needs before deciding whether to move forward with the proposals this year. year.
Reeves said on Wednesday that any approval of the Heathrow project “would be subject to collective cabinet agreement”.
In the last House of Commons vote on a third runway at Heathrow in 2018, seven members of the current cabinet voted against it, including Starmer. The others were Ed Miliband, Steve Reed, Lisa Nandy, Darren Jones, Anneliese Dodds and Hilary Benn.
But Heathrow management has been reluctant to restart the project without clear political backing. Miliband, who is now climate change secretary, threatened to resign over the issue during Gordon Brown’s government, while London Mayor Sir Sadiq Khan still opposes it.
A spokesperson for Khan said this week: “The mayor has long opposed airport expansion around London – linked to the negative impact on air quality, noise and capacity of London to achieve net zero emissions by 2030.”
Critics argue that huge expansion of the aviation sector is incompatible with the UK’s legally binding target of achieving net zero carbon emissions, given that aviation is one of the hardest industries to decarbonise – despite growing hopes of using “sustainable aviation fuel”.
Downing Street said this week it still needs a third runway at Heathrow to meet its four tests on carbon emissions, noise, air quality and growth. The problems of local noise and air pollution are seen by experts as the most difficult to tackle at the congested west London site.
Meanwhile, Reeves, who spent Wednesday meeting with bankers and investors in Davos, reiterated his support for aggressive deregulation and the need to pave the way for more construction.
“There is always a reason not to invest, not to build,” she said. “There are bats and newts. This could add something to carbon emissions in 20 years.”
When asked if she might change the pension tax regime in her next budget in the fall, Reeves refused to rule it out, noting only that she had not changed the current regime in her first budget .
Reeves tried to reassure businesses that the UK has a clear growth plan after a sell-off in government bonds this month.
She also promised to look at pathways for highly skilled workers to come to the UK, as the country tries to attract talented people to sectors such as AI and life sciences.
However, his task of wooing investors has not been made easier by ongoing concerns about the state of the UK’s public finances – and the country’s vulnerability to further sell-offs in global bond markets, which would add to the burden interest on its debt.
Government borrowing reached £17.8 billion last month, £10.1 billion more than in December 2023, and the third highest on record for December, according to the Office for National Statistics.
