Wired-GOV Newswire (news from other organisations)
£31 billion cost to UK trade whilst waiting for new runway to be built
Business welcomes PM’s pledge to make decision before end of year
Over the time it takes to build a new runway, the United Kingdom could lose up to £31 billion in trade by 2030 because of the failure to increase flights to the BRIC (Brazil, Russia, India and China) countries alone, according to new CBI research.
Demonstrating the stark need to get on and deliver on the recommendations of the Airports Commission, the UK’s leading business group published figures to show how much our inability to grow flights will cost in lost trade.
If there are delays to getting new runway capacity up and running beyond 2030, the annual cost to the UK economy in lost trade with the BRIC countries alone - on top of £31 billion - could be up to an additional £5.3 billion, which will rise each subsequent year. That would equate to more than £600,000 every hour. But this could be avoided, if a decision is made before the end of the year.
Welcoming the Prime Minister’s pledge to make a decision on the Airports Commission’s recommendations before the end of the year, the CBI said it wanted to see diggers in the ground swiftly by 2020.
Speaking at Runways UK, Katja Hall, CBI Deputy Director-General, will say:
“Delaying the decision to build a new runway will have a very real economic cost for our country. The Commission has been clear in its recommendation to the Government, and so are we – get on with building it without delay.
“A new runway will help rebalance our economy, prevent us handing opportunity to our rivals and avoid a future bill for our inaction.”
On the cost to the British economy, Ms. Hall will say:
“When it comes to airport capacity – time is money. We’re not just missing out on global opportunities, but paying an economic price right here in the UK.
“Our failure to increase flights to BRIC countries alone will cost the UK as much as £31 billion in lost trade in the period it takes to build a new runway.
“That’s just from a lack of flights to the BRIC countries – just the tip of the iceberg.
“In fact, in 15 years, if we still don’t have capacity up and running, the cost of lost trade to the BRICs will reach up to an additional £5.3 billion a year. If we get to this point, we could be paying in excess of £600,000 an hour in lost trade.
“With timescales of 10-15 years to build new capacity, we shouldn’t have got this far down the line without a plan of action.
“That’s money down the drain - there’s nothing we can do about it now. But what we can do is avoid any future delays.”
On building the runway to rebalance the economy, Ms. Hall will say:
“Spare runway capacity isn’t an optional extra – it’s an economic necessity.
“It is the connective tissue that gives the UK the means to compete – securing the trade and investment which ultimately means growth and jobs.
“In a world of global supply chains, fast global delivery is crucial for British businesses of all sizes. Almost three in four businesses polled in the 2014 CBI/URS Infrastructure Survey said that the availability of direct flights made an impact on their travel decisions.”
On keeping up with the global competition, Ms. Hall will say:
“Looking at the BRICs alone – we’re already out of the medals places.
“The UK has been relegated to 4th or 5th position for new routes to China, Brazil and Russia from the EU in the last 20 years.
“Meanwhile, our competitors are using their spare capacity to dip their toes in the water of new markets. While we’re all here discussing where and how to build a new runway, they are deciding which high-growth destination to fly to next.”
On the timetable for action, Ms. Hall will say:
“We welcome the Prime Minister’s guarantee that he will deliver a decision this side of Christmas. He is right to – delaying into 2016 is too late.
“We need to get the legal process underway before the end of the year, and Parliament needs to get behind it. If it does that, we could see spades in the ground by 2020, with a new runway online between 2025 and 2030 and the whole country reaping the benefits by 2040.”
Read the CBI’s report on airport capacity, Trading Places.
The CBI’s projected figures are based on the following:
- The value of each individual flights to BRIC countries is worth up to £181,000, as outlined in the CBI’s Trading Places report (we have increased the figure slightly from £175,000 to account for inflation since then)
- Limited growth in flights to emerging markets from the UK as we approach capacity in the south-east. Department for Transport passenger forecasts indicate this could come as early as 2025, while the CBI’s Trading Places report demonstrates that the UK is already falling behind European rivals because of limited capacity
- Historic growth rates in direct flights to BRIC markets projected forward
- Growth rates are adjusted for an expected economic slowdown in the BRICs, in line with IMF projections
- New capacity is not delivered until 2030. Timescales for delivery of new capacity has been open to debate, but there is broad consensus that all schemes would be deliverable by this time, including taking into account potential legal and planning delays.
- The Airports Commission have suggested that the earliest new capacity would be delivered is 2026. If delivered in 2026, the cumulative cost of lost trade for the period of 2015 to 2026 would be £13.6 billion, and the annual cost in lost trade going forward from 2026 would be £3 billion a year.
Latest News from
Wired-GOV Newswire (news from other organisations)
CBI comments on new bill to modernise Business Rates31/03/2023 13:05:00
CBI yesterday commented on new bill to modernise Business Rates.
CBI responds to Government ‘Green Day’ announcements31/03/2023 12:20:00
CBI yesterday responded to Government ‘Green Day’ announcements.
Statement from the TUC LGBT+ Committee on Ugandan anti-homosexuality bill30/03/2023 14:05:00
The TUC LGBT+ Committee are sending solidarity and support to the LGBT+ community in Uganda, in the face of a horrific new bill imposing the death penalty.
Latest CBI monthly services sector survey and growth indicator30/03/2023 13:15:00
Across the private sector as a whole, activity fell slightly in the three months to March, broadly matching the pace of last month’s contraction (-4% from -6% in February).
CBI responds to the latest Scottish GDP figures30/03/2023 10:15:00
CBI yesterday responded to the latest Scottish GDP figures.
Migration Bill is “a gift” to dodgy employers looking to exploit migrant workers in underground economy29/03/2023 16:05:00
The government’s Illegal Migration Bill is “a gift to dodgy employers” who are looking to exploit migrant workers in the underground economy, the TUC has today (Wednesday) warned.
CBI Scotland's response to the election of new First Minister29/03/2023 13:05:00
CBI Scotland's response to the election of new First Minister.
UK Space Agency: UK space sector income reaches £17.5 billion as jobs and services grow29/03/2023 12:15:00
The amount the UK space sector brings to the economy has grown by £1 billion, helping launch new business and create jobs across the country, according to new figures.
UK Space Agency: Experiments to study child brain tumours and muscle ageing heading to space28/03/2023 16:05:00
Scientists will use the International Space Station to carry out experiments seeking to improve understanding of currently incurable child brain tumours and the muscle ageing process, thanks to UK Space Agency funding.