Will the Davies aviation commission be nobbled?

The Lib Dems are worried that the Tories are trying to skew the report in favour of a third runway.

The government’s policy on expanding airport capacity is officially to have no policy this side of an election. An independent commission will be set up, chaired by Howard Davies.

It will deliver an interim report by the end of 2013 and a final verdict by the summer of 2015. That conveniently allows all parties to promise in their manifestos to implement the recommendations of the Davies Commission, thereby avoiding the need to say anything specific about preferences for or against a third runway at Heathrow. That, after all, is what the whole debate is really about and a choice that divides Labour and Tory ranks all the way up to cabinet/shadow cabinet level. (Around Westminster many comparisons are being drawn with the tacit pre-election agreement to await publication of the Browne review into higher education funding that allowed Labour and Tories to avoid arguing over tuition fees in the campaign. That left the field open to the Lib Dems to vigorously oppose higher fees. Then, of course, they found themselves running the department that implemented a variation of Browne’s report. Oops.)

Now it is again only the Lib Dems who are united on the third runway question: they utterly hate the idea, on environmental grounds and because noisy jumbos annoy voters in blue-yellow battle ground seats south west of the capital.

At the moment, that tension in the coalition is expressed in the vagueness of the government’s stated position, as set out by new Transport Secretary Patrick McLoughlin in parliament last week.

“The Government believes that maintaining the UK’s status as a leading global aviation hub is fundamental to our long term international competitiveness. But the Government is also mindful of the need to take full account of the social, environmental and other impacts of any expansion in airport capacity.” In other words, “we are very much in favour of more runways except when political circumstances force us to be against them.”

I understand that a battle is brewing in government over the terms of reference for the Davies commission, likely to bleed across into arguments over who sits on it. The Lib Dems are worried that the Tories are trying to skew the whole thing with a prejudice in favour of Heathrow. Much hinges on how the fundamental question before the commission is phrased.

You could ask something broad and open-ended - “what is the best long-term aviation strategy for Britain?” That would put all sorts of options on the table and leave room for a discussion of the environmental considerations of building new runways in various places. Or you could ask something along the lines of “given the urgent need for new capacity and the impacts on growth of having current airports groaning under the strain of over-use, what is the best option available?” In which case the answer is far more likely to be: a third runway at Heathrow. The plans are there in the drawer, drafted by the last Labour government and generally supported by big business.

At the moment, the outline for what the Commission is supposed to do is as follows:

- examine the scale and timing of any requirement for additional capacity to maintain the UK’s position as Europe’s most important aviation hub; and

- identify and evaluate how any need for additional capacity should be met in the short, medium and long term.

All fairly neutral. But rule one of setting up independent commissions in government is to make sure you know the answer you want to the question before you ask it. Gordon Brown was the master of this technique and George Osborne is not averse to plundering the old Brown playbook for political tactics. It is Osborne whom some Lib Dems suspect of trying to nobble the commission with loaded terms of reference. That, of course, might just be a reflection of how depleted levels of trust on pretty much anything have fallen in the coalition.

A protest sign is displayed in an area that would be demolished for a third runway near Heathrow airport. Photograph: Getty Images.

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

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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump