UK business chiefs unite to oppose Heathrow plan
05 May 2009Puncturing the notion that the controversial third runway at London's Heathrow airport has the support of big business, a group of 13 of the most influential businessmen in Britain have lined up in opposition against the government's plan.
The rebels - led by Ian Cheshire, chief executive of Kingfisher, and Tony Blair's "favourite banker", Russell Chambers of Credit Suisse - are forming a lobby group to block the controversial runway. They argue the government has failed to demonstrate the business case, and are planning to publish an open letter backing the concerns of environmentalists.
The government justified giving the go-ahead earlier this year by claiming the benefits to the economy and the city outweighed the environmental impact. But on Sunday the group, which includes Sainsbury's boss Justin King, Charles Dunstone of Carphone Warehouse, James Murdoch, head of News Corporation in Europe, BSkyB chief Jeremy Darroch, and leading private equity figure Jon Moulton of Alchemy Partners.
"To say that all those from the business community support the third runway is wrong," they say in their letter. It will question the benefits to business, taking issue with the notion that passengers changing planes at Heathrow boost the domestic economy.
Until now, most business groups, such as the CBI and London First, have backed the government's plans to build a new runway. In the letter, the executives stress there is no guarantee a third runway would ensure the airport serves more destinations, as BAA, airlines and the government have claimed. They argue the recent opening of Terminal 5 mostly served only to increase flights on existing popular routes.
They also claim it is misleading to compare Heathrow with its European competitors, which mostly have more than two runways, because London is served by five airports in total. They also express concern about the environmental damage caused by an extra runway.
Cheshire told the Guardian newspaper that many business leaders have been reluctant to speak out because they worked with or for companies that supply services to the airport or aviation sectors. By forming a public group representing business, he said he hoped other executives opposed to the third runway would come forward. If they did, he said he would seek meetings with government ministers to press their case.
Cheshire said: "The motivation is that the debate up to now has been based on the assumption that anyone who is in business must be in favour. What became clear is that people privately felt it [opposition] and weren't sure how to kick it off."
He said London First, which represents London business, had been giving out "mixed messages" on the issue. A spokesman for London First admitted there was no unanimity among the business community - in London or nationwide - on whether to build a third runway.
If the lobby group achieves its aim, it will deal a heavy blow to the government. The Conservatives have already said they would overturn the decision to build a third runway, while environmental and local groups have promised to continue to fight the plans.
Gordon Brown will be irked by the involvement of Chambers. He was dubbed Tony Blair's "favourite investment banker" when Chambers famously lent the then prime minister his lurid Bermuda shorts while on holiday in Barbados.
The dozen signatories of today's open letter also include United Business Media boss David Levin, Kohlberg Kravis Roberts partner Dominic Murphy and Sir Roy Gardner, chairman of the Compass Group.
Theresa Villiers, shadow transport secretary, said, "They are telling Gordon Brown he has got it wrong on Heathrow." She added that the emergence of a powerful business voice against the third runway left the government increasingly isolated.
"The coalition against the third runway at Heathrow is now extremely broad. Bankers and executives from private equity firms like KKR are not exactly known for being dewy-eyed environmentalists and sharing similar causes with radical groups such as Plane Stupid," Villiers said.
Arguing that "alternatives to a third runway have not yet been adequately explored", the businessmen echoed calls by the Conservative Party to release existing capacity by developing new high-speed rail links.
They also find environmental and safety grounds for their opposition, expressing concerns over the "enormous increase in aircraft passing directly over such a densely populated city as London".
The letter has been co-ordinated by Russell Chambers, a senior adviser to Credit Suisse. While he lives close to the flight path, other signatories do not. They include Howard Leigh, partner at Cavendish Corporate Finance and John Moulton, head of Alchemy Partners and Lord Young of Graffham.
A spokesman for British Airways said: "A hundred leading companies and business organisations have already publicly stated their support for a new runway." BA claims it would bring £7 billion a year of economic benefits.
A spokesman for BAA said: "We need a third runway to preserve the direct connections that make our companies globally successful."