Airports Commission “buried doubts” over Heathrow growth forecast

Published: Thursday 20th August 15

The Airports Commission has been accused of burying evidence which undermined its decision to back Heathrow expansion over a rival scheme to develop Gatwick.

A cross-party group of South London councils has unearthed a letter by Professor Peter Mackie and Mr Brian Pearce, the commission’s own expert advisors, which questions the reliability of growth forecasts used to justify the recommendation. 

The forecasts, produced by consultants PWC, predicts a third Heathrow runway would deliver up to £147 billion in growth. This figure is used throughout the commission’s final report.

In contrast, the Government’s established approach to economic modelling predicts growth in the region of £33.6 - 54.8billion for Heathrow expansion, versus £27.2 - 47.1billion for Gatwick.

In a letter to the commission Mackie and Pearce warn that the PWC figures include “a high degree of overlap between the direct and wider impacts… double counting … and rely on economic growth and other assumptions which are at the extreme end of the range.”

The experts’ go on to warn that using the £147 billion figure to illustrate Heathrow’s potential benefits could mislead the public and that “qualifiers such as ‘up to’ do not give a flavour of the likely median or mean outcome across the economic scenarios.” 

Mackie and Pearce note the risk of “exaggeration by media” if care is not taken to properly caveat these figures.

The commission’s advisors conclude that “overall, therefore, we counsel caution in attaching significant weight either to the absolute or relative results of the GDP/GVA S-CGE approach (PwC report) within the Economic Case. We would accept that there is some useful indicative material for the Strategic Case but care is required in assessing its robustness and reliability.”

The Mackie Peace letter has been highlighted by a cross party group of South London councils which are investigating the commission’s work amid fears their preferred scheme to expand Gatwick was deliberately undersold. The group includes Croydon, Kingston, Southwark and Wandsworth.

The council point out that the methodology used by PWC is experimental and has never been tested against a live project.

Wandsworth Council leader Ravi Govindia said:

“It’s clear the commission has based its recommendation to expand Heathrow on a grossly exaggerated economic case. Their own expert advisors tore apart the PWC growth forecasts but their evidence was buried and ignored. Sir Howard and his team were hell bent on presenting Heathrow as the best option and refused to let reality get in the way.”

Southwark Council leader Peter John said:

“Gatwick expansion is key to South London’s future and we want to see a fair comparison with Heathrow. Sadly the commission’s economic forecasts are not credible and the final report will go down as crude attempt to mislead Government policy.”

Croydon Council leader Tony Newman said:

“South London councils engaged with the commission in good faith but it’s clear the scales have been weighted against Gatwick expansion. A fair appraisal will point to Gatwick as the best solution and we will continue to make the case for this hugely beneficial project.”

Kingston Council leader Kevin Davis said:

“The commission’s selective use of economic data is deeply concerning and very hard to justify in light of the advice they received from their own appointed experts.  On balance, Gatwick’s expansion would be a catalyst for major, long term investment across South London’s transport network and we can’t let this highly questionable report stop that from happening.”

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Recent comments

The financial impact of expanding Heathrow would extend beyond infrastructure spending in London. The Davies report itself says it would involve a bond issuance which would likely be the largest in the London Stock Exchange's history. The report doesn't say, but I assume, this could inevitably crowd out capital raising by other players - companies, local authoritie. It would mean putting an awful lot of eggs into one basket.
Elizabeth Balsom

13 October 2015

This smacks of desperation by clinging to any snippet of info that might undermine the case for Heathrow. So, Professor Mackie and Mr Pearce have never been wrong in their judgements. As a Wandsworth resident I resent the amount of money and energy that Govindia and co channel into this negative, ego driven campaign. On Sunday afternoon I glanced up at a Qatar A380 and marvelled at just how quiet it was for such a massive machine. As has been mentioned before the noise and pollution is nothing like it was 20+years ago.
Brian Cahill

24 August 2015

Wandsworth Council, on what basis do you think that you have a remit for an anti-Heathrow position? As a Wandsworth resident, you have never canvassed my opinion on this matter, nor that of my neighbours Stop whining about heathrow expansion or if you must continue - at least confirm that your views are representative of your constituents. This reeks of local government having nothing better to do!
sean

22 August 2015

So what are YOU going to do about it? You are the elected officials and if you have uncovered evidence of corruption, then you need to stand up for all of us. YOU are our voice, don't forget. This Heathrow expansion and recent changing of runways etc has severely affected my life. Do something about this Wandsworth Council!
Julia

22 August 2015

Growth forecasts are not an exact science and all dependant on the world economies. Is it not time we stopped wasting the council tax money on this and move on? How much has been spent so far and where has it got us ?
Andrew

22 August 2015

Corruption is rife in all walks of life and none more so than the Heathrow Corporation and shareholders. I hope more councils will support the NO expansion campaign now that this has been exposed. We need people power to stop this. Why not organise a protest march before it's too late?
Barbara

21 August 2015

What a surprise! Howard Davies has been corrupted obviously, the shareholders are rich and want to get richer. There is no consideration for residents quality of life, pollution or safety in their quest. Expansion will ruin this great City and huge areas will be impossible to live in. I'm glad I will be old and grey by the time this happens and hopefully deaf!!
Anna

21 August 2015

This really is pretty shocking stuff. The Councils have done good work unearthing it. Don't give up the fight!
FM

21 August 2015

Further proof if needed, that this report and recommendation was bought at it's inception by big business, as every other stage of Heathrow expansion has been since it's illogical origins as a major hub airport for London after the war. Londoners quality of life must finally be put above what's best and easiest for multinational business' and those politicians willing to sell us out once again must be ousted as the corrupt mercenaries they are. Major hypocrites ; Cameron, Harman.
D. Spring

21 August 2015