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UK Treasury chief backs third runway at London's Heathrow Airport

PAN PYLAS
January 29, 2025

LONDON (AP) -- The U.K. government is backing the construction of a third runway at London's Heathrow Airport, Treasury chief Rachel Reeves said Wednesday.

Another runway at the U.K.'s main airport will bolster the country's long-term economic growth potential, Reeves said in a speech.

"We cannot duck the decision any longer," she said. "The case is stronger than ever."

Reeves said the government was inviting proposals over its construction by the summer and that it would then make a full assessment.

"This will ensure that the project is value for money and our clear expectation is that any associated service transport costs will be financed through private funding," she said.

For decades, campaigners, including from within her Labour Party, have opposed a third runway on environmental concerns. London Mayor Sadiq Khan, and John McDonnell, the lawmaker whose constituency contains Heathrow, have both voiced their opposition to the third runway.

Reeves insisted the runway will be "delivered in line with our legal, environmental and climate objectives."

Heathrow's plan to build a third runway received parliamentary approval in June 2018, but has been delayed by legal challenges and the coronavirus pandemic. Heathrow's chief executive, Thomas Woldbye, has said that he wouldn't continue developing the project without the government confirming that it wants expansion.

Reeves' support for a third runway came in a wide-ranging speech on boosting U.K. growth rates, which have been historically low since the 2008 global financial crisis for a variety of reasons.

The Labour government badly needs growth rates to increase over the coming years, so it can lift living standards following the cost-of-living crisis and to get money into ailing public services.

Since taking office in July, Reeves and Prime Minister Keir Starmer have been criticized for talking down the economy and for increasing taxes on business, a combination that critics argue have led to a growth downturn in the past few months and the sharp downturn in the government's ratings in opinion polls.

Though a third runway won't do much to bolster economic growth in the near-term as it would take up to a decade to build, Reeves hopes that the announcement itself will provide investors with a signal that the government is serious about turning the economy around.

"We are not waiting for years into the future," she said. "We want to do things now, to turn around the performance, and we want to give businesses and investors confidence that this is a country to start doing things, to start making things in again."

The construction of a third runway would require more than 700 houses to be demolished and sections of the M25 motorway, which encircles London, to be moved into a tunnel.

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