Growth_0

Helping the UK economy take off

There are some things that just don’t seem to go together, no matter how hard you try.  Transport and the environment can quite easily be put into two apparently separate categories, with little prospect of reconciliation.  The problem for the Government is that transport, particularly in light of our status as an island nation, is a key driver of economic growth.  Recognising the need to upgrade the UK’s creaking transport infrastructure is one thing; counting the environmental and financial cost at a time of fiscal stringency and low-carbon targets is quite another.

The Coalition’s direction of travel has so far been in favour of lower carbon transport.  High-speed rail is being given the thumbs up through the flagship HS2 scheme, intended to act as a straight swap for those currently travelling domestically by air.  Aviation expansion at Heathrow and the rest of the South East is being given the thumbs down, ostensibly on environmental grounds.  Problem solved?

The inconvenient and simple truth facing the Government is that, as reported in the Telegraph this week , it’s cheaper to fly than travel by train on half of Britain’s ten most popular domestic routes.  This situation is hardly likely to improve, given the estimated £17bn price tag to build the HS2 project alone.  Chances are that travelling on the new line will be even more costly than on existing routes, if current domestic HS1 fares are any guide.

So how does the Government encourage economic growth through aviation without it costing the earth?  The Department for Transport is seeking views on its ‘scoping paper’ on Developing a sustainable framework for UK aviation, which will eventually replace the outdated 2003 Air Transport White Paper.  The most striking feature of the document was a clear sense of what the Government’s vision for aviation is - better use of existing aviation infrastructure and lower carbon emissions - but very little idea of how to deliver it.

The industry reaction has been understandably cautious, but this should not mask the massive opportunity presented by the Government’s ‘fresh start’ policy on aviation.  The Department are crying out for the evidence needed to shape this new framework, something which only industry is in a position to provide.  Ministers will be desperate to avoid a situation where the brakes are put on economic growth by an overly burdensome and prescriptive regulatory regime, particularly in taxation.

The unusually long consultation period on the framework indicates the lengths to which the Government will go to gather the evidence necessary to get this contentious policy right.  For an industry all too frequently on the back foot politically, the aviation sector should seize this once in a generation moment to shape its own future, and with it the future success of the UK economy

Written By

Portland