Growing the UK Economy

Baroness Kramer Excerpts

Monday 3rd February 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. Obviously, it is not for me to suggest what inquiries the Economic Affairs Committee should conduct. If it were to conduct such an inquiry, I would certainly read its report with interest, and I think we would see that the record of the previous Government on the economy was nothing short of catastrophic—whether it was their austerity, which took demand out of the economy at exactly the wrong moment; their disastrous Brexit deal, which has reduced GDP by some 4%; or their disastrous Liz Truss mini-Budget. All of these things have done long-term deep-seated damage to the economy, which will take time to turn around, but I believe we are starting to turn that around and we will continue to do so.

[Baroness Kramer (LD)]

My Lords, given the passenger forecast for a third runway of a doubling of passenger numbers at Heathrow, I was told that domestic passengers would come from all the regional airports because the airlines would cease to fly direct international flights from regional airports, including both Birmingham and Manchester, and instead feed to Heathrow. I was told that the international passengers would be almost exclusively transfer passengers—one of the reasons for arguing that not a lot of additional transport is needed into London. I understand why all of that works to create profits for the airport, but I find it very hard to see how that creates any growth. Can the Minister please explain how, particularly, that damage to the regions will help with regional growth and, frankly, how transfer passengers contribute significantly to overall growth?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. This is, I think, probably one of the few issues that we disagree on. Obviously, she is asking me to comment on what she was told several years ago, and I cannot necessarily comment on what she was told then. She is describing, I think, the concept of a hub airport, which is why Heathrow is such a specific proposition, and will lead to significant amounts of growth in our economy, not least because of freight. The amount of freight that Heathrow conducts, the increase in trade, and the new emerging markets that an expanded Heathrow will connect us to, will directly lead to increases in growth in this country. That is an incredibly valuable thing.

The noble Baroness spoke about regional growth and regional airports. I would simply point her to the enthusiastic response from regional airports. They have come out very strongly in support of an expanded Heathrow, because they know it will lead to expansion for them and growth and jobs in their areas. We know that, in terms of the economic benefits of the expansion of Heathrow, 60% of those benefits will be outside London and the south-east. So I genuinely disagree with the noble Baroness when she says that it is negative for the regions; I think this is a very positive point for regional growth.