Wednesday 15 July 2015 1:41 pm

Sir Howard Davies grilled over Airports Commission’s Heathrow runway decision

Chair of the Airports Commission Sir Howard Davies explained the decision to recommend a Heathrow expansion in front of a Lords Selec Committee.

The Commission's long-awaited report somewhat controversially recommended building a new runway at Heathrow as opposed to Gatwick as the "clear and unanimous" decision.

Davies' report, suggested adding another runway to Heathrow could create 70,000 jobs and add £147bn to the economy by 2050, will be heavily scrutinized by the government before it makes a final decision on how and where to expand airport capacity in the capital.

The first step in that interrogation came today, and here's how new RBS board member Davies responded to some of the Lords' inquiries.

Will the UK continue to meet demand for additional runway capacity by 2050?

We did quite a lot of consultation in the financial markets ourselves to check the finance ability and that was very reassuring. We also used the various demand models there are … and there was a broad consensus that the demand needed to make an additional runway in London and the South East viable would always be there…

…the upward trend in demand for flying has been very strong. Business flying, tourism flying but particularly visiting friends and relatives.

Will it be possible to meet demand in line with future climate change restrictions?

Our conclusion which I believe the Climate Change Committee supports is that you could allow one new runway's worth of capacity to come into operation whilst not implying an implausible decarbonisation of the rest of the economy.

We said supposing carbon emissions had to be constrained to 37.5m tonnes – consistent with a reduction by 80 per cent by 2050 – then would you still have demand for extra runway capacity in the South East and our conclusion is that you would.

Why not choose the £14.7bn cheaper option at Gatwick?

This is not a public project…this is something which private investors are prepared to finance so to some extent the costs and the revenues are matters for them. So we chose to take a much broader approach at looking at the overall economic benefit to the country and particularly to the regions of the government facilitating this investment.

The investment that you would be facilitating here [Heathrow]…generates an absolute economic benefit in our view which is considerably greater than the Gatwick one.