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Chancellor Rachel Reeves said the pursuit of growth “trumps” the government's net zero commitments, and she is preparing for growth. Pointing out your support To expand the airport in the London area, including Heathrow Airport.
Speaking at the World Economic Forum in Davos, the Chancellor described growth as “the biggest thing”. UK “Mission number one” for the government.
Asked what she would do if faced with a choice between economic growth and the UK's 2050 net-zero target, Reeves said: “If that is task number one, then it is clearly the most important thing.”
Her comments come as the government considers backing expansion plans for Luton and Gatwick airports, as well as deciding whether to sign its approval for a controversial third runway at Heathrow.
The possibility of Heathrow expansion threatens to divide the Cabinet and will force the government to choose between its stated goals of supporting “growth” and reducing the UK’s carbon emissions.
The Chancellor said on Wednesday that the government had already signed off on the expansion of City and Stansted airports, which also serve the capital, signaling “this government’s commitment to making Britain an important trading nation”.
He was speaking earlier during an event in Davos. Reeves He said: “When we say that growth is the first mission of this government, we mean it. That means it trumps other things.”
She is expected to indicate in a speech next week that the government favors expanding Gatwick and Luton airports, while reaffirming its support for a third runway at Heathrow.
Prime Minister Sir Keir Starmer and many senior Labor figures have previously opposed Heathrow expansion.
Some Whitehall officials believe Reeves, a supporter of Heathrow expansion, is trying to persuade Starmer to publicly approve a third runway. “This is not my assessment,” said one of the prime minister’s allies.
When Starmer was asked about the issue in the House of Commons on Wednesday, he declined to comment on “speculation”, adding: “As a government we are committed to growth. We are committed to the aviation sector and to our climate commitments.”
In theory, Reeves reiterating her support for Heathrow's third runway could be the political signal the airport management needs before it decides whether or not to go ahead with the proposals this year.
Reeves said on Wednesday that any approval of the Heathrow scheme would have a “collective Cabinet agreement”.
In the last Commons vote on a third runway at Heathrow in 2018, seven members of the current government voted against it, including Starmer. The others are Ed Miliband, Steve Reid, Lisa Nandy, Darren Jones, Anneliese Dodds and Hilary Benn.
But Heathrow Airport management has been reluctant to revive the scheme without clear political support. Miliband, who is now climate change minister, threatened to resign over the issue during Gordon Brown's government, while London Mayor Sir Sadiq Khan also remains opposed.
A spokesman for Khan said this week: “The mayor has long-standing opposition to airport expansion around London – linked to the negative impact on air quality, noise and London’s ability to reach net zero by 2030.”
Critics argue that the massive expansion of aviation is inconsistent with the UK's legally binding target to reach net-zero carbon emissions, given that aviation is one of the most difficult industries to decarbonise – despite rising hopes for “sustainable aviation fuels”.
Downing Street said this week it still needs a third runway at Heathrow to meet its four tests on carbon emissions, noise, air quality and growth. Experts consider local noise and air pollution issues to be the most difficult in the busy west London location.
Meanwhile, Reeves, who spent Wednesday meeting with bankers and investors in Davos, reiterated her support for deregulation and the need to pave the way for more construction.
“There is always a reason not to invest, not to build,” she said. “There are bats and newts. It might add something to carbon emissions in 20 years.”
Asked whether she might change the tax regime around pensions in her next Budget in the autumn, Reeves refused to rule it out, noting only that she had not changed the current regime in her first Budget.
Reeves is trying to reassure businesses that the UK has a clear growth plan after the devastating sell-off in government bonds this month.
She also promised to study ways highly skilled workers could come to the UK, as the country tries to attract talented individuals in sectors such as artificial intelligence and life sciences.
However, its task of attracting investors has not been made easier by persistent concerns about the state of the UK's public finances – and the country's vulnerability to a further sell-off in global bond markets, which would increase debt interest burdens.
Government borrowing reached £17.8 billion last month, £10.1 billion more than in December 2023, and the third highest December level on record, according to the Office for National Statistics.
