Rachel Reeves’ Heathrow plans hit extreme turbulence! Labour cut up erupts as London Mayor and high get together donor vow to oppose third runway
Rachel Reeves opened up a deep split at the heart of Labour last night as she gambled on expanding Heathrow Airport to revive her flagging growth plans.
The Chancellor publicly backed controversial plans for a third runway at Britain’s biggest airport as she vowed to ‘fight’ the ‘blockers’ holding back the economy.
The PM and Chancellor faced criticism last year after their gloomy warnings on the economy were blamed for shattering business and consumer confidence.
Ms Reeves yesterday insisted she was ‘optimistic’ about Britain’s economic prospects. But she refused to rule out a fresh round of tax rises and spending cuts in March if the public finances continue to deteriorate.
Within minutes of the Chancellor backing Heathrow, London’s Labour mayor Sadiq Khan condemned the proposal, saying it would be impossible to deliver ‘without a hugely damaging impact on our environment’.
Sir Sadiq, who backed a previous legal challenge to the plans, said he remained ‘opposed’ to the project because of the ‘severe impact it will have on noise, air pollution and meeting our climate change targets’.
Last night he insisted he was ‘as pro-growth as anybody in Labour’ but warned he would use ‘use any tool in the toolkit to stop a third runway happening’.
Green entrepreneur Dale Vince, whose £5 million donation to Labour makes him one of the party’s biggest backers, described the Chancellor’s announcement as ‘a mistake’ which would ‘wipe out’ the government’s attempts to hit climate targets.
![Chancellor Rachel Reeves backed a range of projects designed to kick-start activity in a keynote speech](https://i.dailymail.co.uk/1s/2025/01/29/23/94631085-14339861-Chancellor_Rachel_Reeves_backed_a_range_of_projects_designed_to_-a-37_1738191862398.jpg)
Chancellor Rachel Reeves backed a range of projects designed to kick-start activity in a keynote speech
![The Chancellor publicly backed controversial plans for a third runway at Britain¿s biggest airport as she vowed to ¿fight¿ the ¿blockers¿ holding back the economy (file image)](https://i.dailymail.co.uk/1s/2025/01/29/22/94657675-14339861-The_Chancellor_publicly_backed_controversial_plans_for_a_third_r-a-32_1738191352397.jpg)
The Chancellor publicly backed controversial plans for a third runway at Britain’s biggest airport as she vowed to ‘fight’ the ‘blockers’ holding back the economy (file image)
![An artist's impression of how the Heathrow site could look after expansion](https://i.dailymail.co.uk/1s/2025/01/29/22/94427491-14339861-An_artist_s_impression_of_how_the_Heathrow_site_could_look_after-a-35_1738191576693.jpg)
An artist’s impression of how the Heathrow site could look after expansion
![Sir Sadiq Khan, who backed a previous legal challenge to the plans, said he remained ‘opposed’ to the project because of the ‘severe impact it will have on noise, air pollution and meeting our climate change targets’](https://i.dailymail.co.uk/1s/2025/01/29/22/94657679-14339861-Sir_Sadiq_who_backed_a_previous_legal_challenge_to_the_plans_sai-a-29_1738191352359.jpg)
Sir Sadiq Khan, who backed a previous legal challenge to the plans, said he remained ‘opposed’ to the project because of the ‘severe impact it will have on noise, air pollution and meeting our climate change targets’
‘It’s the wrong kind of growth,’ he said.
‘We can have growth but we shouldn’t try to get it in these ways that increase our carbon emissions.’
Energy secretary Ed Miliband, who previously threatened to resign in protest at Heathrow expansion, is said to have backed down rather than lose his Cabinet job.
But he snubbed the Chancellor’s speech yesterday and later failed to turn up for Prime Minister’s questions in the Commons.
Ryanair boss Michael O’Leary yesterday claimed the the new runway could take decades to build and urged her to scrap air passenger duty rather than ‘waffle on’ about Heathrow expansion, which said would not happen before the 2040s.
Mr O’Leary said: ‘The third runway at Heathrow is a dead cat.
‘If it ever arrives, it will be about 2040, 2045 or 2050, in fact long after I’ve departed from Ryanair.
‘It will not deliver any growth. The thing that will deliver growth is abolishing APD.’
Ms Reeves has come under intense pressure in recent weeks over the collapse in economic growth since the election.
![Protests against airport expansion were taking place outside Rachel Reeves' speech](https://i.dailymail.co.uk/1s/2025/01/29/22/94629607-14339861-Protests_against_airport_expansion_were_taking_place_outside_the-a-36_1738191578856.jpg)
Protests against airport expansion were taking place outside Rachel Reeves’ speech
In a major speech yesterday she listed a string of measures designed to revive the economy in the wake of her record tax-raising Budget in October, including tearing up the planning rules so that developers can ‘stop worrying about the bats and the newts’.
But she rejected calls to reverse her £25 billion National Insurance raid and drop Labour’s controversial Employment Rights Bill, which firms have warned could cost thousands of jobs and send growth into reverse.
In the Commons, Kemi Badenoch branded the legislation the “Unemployment Bill”, telling Keir Starmer: ‘This Bill is terrible for business, but it is great employment for lawyers… he needs to stop being a lawyer and start being a leader. This is another measure in the Bill that fails his growth test..’
The Tory leader, who backs Heathrow expansion, said many of the projects announced by the Chancellor were welcome but would ‘take years to deliver’.
She added: ‘When the Conservatives left office, we had the fastest economic growth in the G7, but what are the Government doing for growth now? They are destroying it.’
But Sir Keir defended the workers’ rights legislation, claiming it would be ‘good for working people and good for the economy’.
![Sir Keir defended the workers¿ rights legislation, claiming it would be ¿good for working people and good for the economy'](https://i.dailymail.co.uk/1s/2025/01/29/22/94656717-14339861-Sir_Keir_defended_the_workers_rights_legislation_claiming_it_wou-a-34_1738191352400.jpg)
Sir Keir defended the workers’ rights legislation, claiming it would be ‘good for working people and good for the economy’
![Ms Reeves yesterday revealed she has asked Heathrow Airport to come forward with new plans for a third runway by the summer, reopening one of Labour¿s bitterest internal divides](https://i.dailymail.co.uk/1s/2025/01/29/22/94656885-14339861-Ms_Reeves_yesterday_revealed_she_has_asked_Heathrow_Airport_to_c-a-33_1738191352398.jpg)
Ms Reeves yesterday revealed she has asked Heathrow Airport to come forward with new plans for a third runway by the summer, reopening one of Labour’s bitterest internal divides
In a wide-ranging speech in Oxfordshire, the Chancellor:
- Admitted the Budget raid on National Insurance had ‘consequences for business and beyond’ but insisted the alternative would have worse
- Said that a ‘pragmatic’ reset of relations with the EU was vital to growth
- Insisted there was ‘no trade off’ between her growth plans and Mr Miliband’s controversial Net Zero crusade
- Backed a series of major projects, including the refurbishment of Old Trafford, the reopening of Doncaster Airport, a new crossing over the Thames and the creation of ‘Europe’s Silicon Valley’ between Oxford and Cambridge
- Pledged ‘fundamental reform’ of the benefits system as ministers admitted the government is on course to break the annual ‘welfare cap’ by £8.6 billion this year
Ms Reeves yesterday revealed she has asked Heathrow Airport to come forward with new plans for a third runway by the summer, reopening one of Labour’s bitterest internal divides.
Seven members of the cabinet, including Sir Keir and Mr Miliband, voted against a third runway when it was last debated by parliament in 2018.
Transport secretary Heidi Alexander also opposed the plans when she served as Sir Sadiq’s deputy mayor in London.
When running for the Labour leadership in 2020, Sir Keir said: ‘I don’t think we can go on saying something is good for the economy but bad for the environment. If it’s bad for the environment then it’s bad for the economy.’
But yesterday he said there was ‘more to do’ on growth, adding: ‘We’re supporting a third runway at Heathrow.’
Ms Reeves said the development of ‘sustainable’ aviation fuels had changed the equation on airport expansion, which the Government is also considering at Gatwick and Luton.
And she said Heathrow’s status as the UK’s only hub airport meant expansion was essential, adding: ‘By backing a third runway at Heathrow we can make Britain the world’s best-connected place to do business.’
Making the case for radical reforms, she said: ‘Low growth is not our destiny, but growth will not come without a fight, without a government willing to take the right decisions now to change our country’s future for the better.’
![Energy secretary Ed Miliband, who previously threatened to resign in protest at Heathrow expansion, is said to have backed down rather than lose his Cabinet job](https://i.dailymail.co.uk/1s/2025/01/29/22/94657929-14339861-Energy_secretary_Ed_Miliband_who_previously_threatened_to_resign-a-30_1738191352362.jpg)
Energy secretary Ed Miliband, who previously threatened to resign in protest at Heathrow expansion, is said to have backed down rather than lose his Cabinet job
She added: ‘We are systematically, one by one, removing the barriers that held back our growth performance for too long.’
Heathrow Airport, which has been trying to build a third runway for more than 20 years, welcomed the Chancellor’s backing but has warned the project will take at least a decade to deliver.
In a statement, chief executive Thomas Woldbye said further ‘policy change’ would be needed to make the project viable, including ‘airspace modernisation’ to enable the number of annual flights to increase from 480,000 to 720,000.
He said the airport would work with ministers in a bid to get planning permission by the end of this parliament, with construction then taking a further seven years.Labour’s former shadow chancellor John McDonnell said the project would require the demolition of 4,000 homes in his Hayes and Harlington constituency.
Mr McDonnell questioned why so many ministers, such as the PM, had undergone a ‘Damascene conversion’ on a project which he said would deliver little in the way of growth.
‘This is such a huge political, economic and especially environmental mistake that sadly I fear it will inflict an irreparable scale of damage on the government,’ he said.
Environmental groups also condemned the plans. Friends of the Earth’s head of campaigns, Rosie Downes, warned it was a ‘reckless gamble’.