Heathrow third runway GDP boost may be 90% lower than earlier estimates
8 reported
Government analysis indicates the economic benefit of a third runway at Heathrow could be far smaller than previously claimed, with the Department for Transport estimating a GDP increase of up to 0.05% — a 90% reduction from the 0.5% figure previously cited. The DfT’s net present value calculation for the project, even if privately financed, ranges from negative £23.4bn to negative £62.5bn, meaning the social and environmental costs could outweigh the benefits. The appraisal includes between £29bn and £42.4bn in passenger benefits and wider economic gains, but estimates social and environmental impacts at £58bn to £82bn, with airline and airport profits expected to fall by about £25bn. Chancellor Rachel Reeves has championed rapid expansion as a top priority for economic growth, and the government launched the next stage of the legislative process on Thursday. Heathrow argued the DfT model excludes other economic competitiveness benefits, while a government spokesperson said the figures are only part of the picture. The proposed 3,500-metre runway would divert the M25, demolish about 800 homes, and add roughly 276,000 extra flights per year, with costs estimated between £32.7bn and £52.4bn. A separate DfT health impact assessment found the runway could significantly harm the health and wellbeing of up to 3 million people living near Heathrow.
What’s reported
DfT analysis says the third runway could boost GDP by up to 0.05%, 90% less than the 0.5% previously stated.
The net present value of the scheme is calculated at between -£23.4bn and -£62.5bn.
Social and environmental impacts are estimated at between £58bn and £82bn.
Passenger benefits and wider economic gains are between £29bn and £42.4bn.
Airline and other airport profits are expected to fall by about £25bn.
The runway would be 3,500 metres long, divert the M25, demolish about 800 homes, and add about 276,000 extra flights per year.
Project cost is estimated at £33bn, with an independent assessment for the CAA putting it between £32.7bn and £52.4bn.
A DfT health impact assessment says up to 3 million people near Heathrow could face significant harm to health and wellbeing.
Key figures
Rachel Reeves, chancellor
Alex Chapman, head of economic policy at the New Economics Foundation
Olly Glover, Liberal Democrat transport spokesperson
DfT spokesperson (unnamed)
Heathrow spokesperson (unnamed)
Sources: The Guardian
