Chancellor hints at support for third runway at Heathrow

The chancellor has hinted the government would support a third runway at Heathrow Airport, saying “sustainable aviation and economic growth go hand in hand”.

Rachel Reeves told the BBC she would not comment on “speculation” and the government would set out its plans in due course.

However, she said a third runway at Heathrow “will mean that instead of circling London, flights can land” and that sustainable fuel was changing the carbon emissions from flying.

Reeves is expected to make an announcement backing airport expansion next week, as part of major speech on plans to boost the economy.

The government has already said it wants to fast-track permission for housing and commercial developments near train stations, as well as pare back environmental impact assessments.

In an interview with the BBC’s Sunday with Laura Kuenssberg programme, the chancellor struck a more optimistic tone about the economy than in recent months, when the government has repeatedly warned about the state of the public finances.

Reeves said she did not believe “low growth is our destiny” and pledged to go “further and faster” to remove the barriers blocking investment.

Asked if there was also likely to be an announcement on Heathrow next week, she did not answer directly but said the government had already signed off the expansion of London City Airport and Stansted.

“That will be good for investment and trade in our country and also good for families wanting to go on cheap holidays,” she said.

Reeves was challenged over whether she agreed with criticism from Labour mayor of London Sadiq Khan that expanding Heathrow would have a damaging impact on air quality, noise and the capital’s ability to reach net zero.

In response she said “a lot has changed in terms of aviation”, with investment in sustainable fuel and electric planes.

The chancellor added: “I believe that clean energy, that reducing our carbon emissions are good for economic growth.”

Labour has made boosting economic growth central to the government’s mission, pledging to raise living standards and deliver the highest sustained economic growth in the G7 group of rich nations by the time of the next election.

But between July and September the economy had zero growth and the latest monthly figures for November showed just a small uptick.

The push for economic growth and promises to cut regulations have led some to question whether this is being prioritised over environmental concerns.

One former Labour frontbencher suggested the chancellor was in danger of looking “desperate” in her search for growth.

The expansion of Heathrow has long been opposed by green groups, some Labour MPs and residents living near the airport.

Sir Keir Starmer and seven ministers who attend his cabinet – including Energy Secretary Ed Miliband and Environment Secretary Steve Reed – voted against proposals for a third runway in 2018, when the party was in opposition.

Last week Miliband said he would not resign if the government backed a third runway, insisting clean energy was “absolutely complementary” with the government’s growth mission.

But London mayor Khan has said his opposition to a third runway has not changed and he would support a legal challenge if the government backed proposals.

There is currently no application for a third runway at Heathrow and in December the airport’s boss said the company needed a “clear steer” from the government by the end of 2025 for plans to be taken forward.

Reeves also suggested the government would consider joining an arrangement between the European Union and neighbouring countries that is designed to facilitate tariff-free trading.

Last week the EU’s new trade chief Maros Sefcovic told the BBC he was open to Britain joining the Pan-Euro-Mediterranean Convention (PEM) as part of a post-Brexit “reset”.

The chancellor told Sky News the government was “happy to look at these different proposals” because the current deal “is not working well enough” for businesses.