Miliband should U-turn on a third runway before the coalition does

The Labour leader is missing a political opportunity.

There is more consensus in Britain’s economic policy debate than either Labour or the Tories like to admit. As my colleague George Eaton notes here, the Chancellor has discreetly embraced the Keynesian proposition that public spending on infrastructure (albeit hidden from the national balance sheet via loan guarantees) is needed to spur growth. Labour, meanwhile, are formally committed to a version of fiscal austerity – spending cuts and tax rises – over the long-term, only not at the same breakneck speed as the government.

There is also an emerging consensus that the UK needs a state-sponsored infrastructure upgrade as part of a strategic plan to boost international competitiveness. What that might mean in practice is less certain. One project that always comes up in the discussion is the expansion of airport capacity, which generally includes the idea of building a third runway at Heathrow. It is a project for which business leaders routinely clamour. The last Labour government gave its approval; the incoming coalition – honouring pledges made in opposition – killed the idea. Many Tories are now repenting that decision.

A coalition "aviation strategy review" which would consider reviving the Heathrow expansion has been delayed until the end of the year, largely because the Transport Secretary, Justine Greening is famously hostile to a third runway. Her Putney constituents don’t fancy having any more Jumbos booming over head. That problem might have been foreseen and some Tory MPs mutter that David Cameron ought to have thought of the potential conflict of interest when appointing Greening to the Transport portfolio. That he didn’t, say the Tory grumblers, is evidence of his cavalier attitude to appointments. (In the next sentence they usually point to the promotion of Chloe Smith to the job of economic secretary to the Treasury – a role sneerily said to have been given as part of a campaign of positive discrimination in favour of young women to rebalance the appearance of the Tory front bench away from older men.)

Greening’s opposition to a third runway at Heathrow is also said to have damaged her once close relations with the Chancellor, who is desperate for any ready measure that will noisily advertise his commitment to growth. Runway expansion has solid support among Tory MPs. A recent pamphlet by the Free Enterprise Group, a fiercely pro-business faction of Conservatives mostly from 2010 intake, called for not one new runway but two. The Lib Dems, meanwhile, remain opposed. Cancelling the third runway was an explicit commitment in the coalition agreement.

Significantly, that promise was contained in the section headed “Energy and Climate Change”. Opposition to aviation has traditionally been bundled up with arguments about the urgency to reduce the nation’s carbon footprint. Rightly or wrongly, the green agenda has now been well and truly trumped by craving for economic growth (and it was never that prominent among voters’ concerns). In political terms, the case against Heathrow expansion is getting harder to make.

There are members of the shadow cabinet who think Labour should swing behind the idea. It was, after all, their plan in the first place. But Ed Miliband, as former Secretary of State for Energy and Climate Change, is known to have been squeamish about the policy in government. In the race to be Labour leader he claimed to have considered resigning over the matter. Backing a third runway now would be a very personal U-turn.

That might well be a risk worth taking. Labour’s line at the moment is to offer constructive engagement with the government to help develop an aviation strategy – recognising the need to expand capacity and ready to consider all options. A third runway at Heathrow is not ruled out but the party is unwilling to go into specifics. Yet.

There is a political opportunity being missed here. Backing Heathrow expansion would show a capability to take specific policy decisions – and not altogether easy ones – instead of loitering behind well-intentioned, vague pieties. It would also sow a bit of discord in the government ranks, which is what the opposition likes to do. The point about the need for more airport capacity has effectively been conceded, so the environmental argument is much diminished. Ultimately reducing the UK's carbon footprint will be as much a question of cleaner planes as fewer flights. Eventually, the government will U-turn on the third runway. Miliband would be smart to get in there first.

British Airways aircraft at Heathrow's Terminal 5. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Photo: Getty
Show Hide image

Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.