Rachel Reeves expected to welcome Heathrow expansion plans

Chancellor Rachel Reeves is expected to welcome Heathrow’s expansion in an announcement on Wednesday, the BBC understands.

A move to encourage in principle a planning application for a third runway at the airport will mark the first stage of the process and come as part of a major speech on wider growth plans to boost the economy.

The government cannot prejudge the results of a formal planning application for a specific runway scheme, and the BBC understands there will be no public money for the project announced on Wednesday.

The announcement will likely anger campaigners – including within Reeves’ Labour Party – who have opposed a third runway for decades because of environmental concerns.

In an article in The Times, Prime Minister Sir Keir Starmer said wider government plans would “kick down the barriers to building, clear out the regulatory weeds and allow a new era of British growth to bloom”.

The Heathrow announcement comes after weeks of hints Labour would back the controversial airport expansion.

On Sunday, Reeves told the BBC she would not comment on “speculation” when asked if the government would support a third runway, but added that “sustainable aviation and economic growth go hand in hand”.

Heathrow has long argued the expansion is needed to help it keep up with rival airports in Europe, which handle less passengers with more runways.

In December, the airport’s boss said it needed a “clear steer” from the government by the end of 2025 for plans to be taken forward.

However, even with the expected announcement on Wednesday, a third runway at Heathrow could still be a long way off.

Questions remain around who will fully fund works on the M25 motorway around London, and other transport links. The road could need to be rerouted through a tunnel underneath the third runway.

Another potential roadblock is how much the Civil Aviation Authority (CAA) will allow Heathrow to pass on the costs of early development work to the airlines.

Many airlines have already expressed concern at the likely costs. The CAA were among the regulators who presented ideas to the chancellor on how to boost growth at a Number 11 meeting earlier this month.

The other issue is how Reeves’ own party may react to a third runway at Heathrow.

London Mayor Sadiq Khan’s office told the BBC he has “a long-standing opposition to airport expansion around London” because of the impact on air quality and noise.

Reeves’ speech on Wednesday will also focus on development between Oxford and Cambridge to create a “Silicon Valley of Europe”.

The government wants thousands of homes and a new rail link to be developed in the area.

The government will also review the so-called ‘Green Book’ rules – guidance issued by the Treasury on how to appraise policies, programmes and projects – which it said have in the past biased infrastructure spending to already fast growing areas, mainly in the south.

The government is aiming to approve major new infrastructure more than once a fortnight for the whole Parliament.

A senior minister said they were taking big long term decisions ignored by previous governments in the knowledge that “the benefit won’t be achieved until after this parliament, but they are the right long term decisions”.

The Treasury is confident that there will be “spades in the ground well before that”.

The key difference, a senior minister said, was that the government will demonstrate that when the growth agenda comes into conflict with something else they “will make the difficult decisions”.

The Conservatives have hit back at Labour’s growth plans.

“The biggest barriers to growth in this country are Rachel Reeves, Keir Starmer, and their job destroying Budget,” said shadow chancellor Mel Stride.

“Hastily cobbled together announcements of growth in the 2030s will do nothing to help the businesses cutting jobs right now.”

Liberal Democrat Treasury spokesperson Daisy Cooper said: “Trying to boost growth without fixing our trading relationship with Europe is like driving with the handbrake on.”

The Lib Dems are calling for “a new UK-EU customs union that would put rocket boosters under the economy”.

Reeves has previously suggested big projects like Heathrow need to go ahead to help the UK economy grow.

However, despite the government’s words on growth, the economy remains sluggish.

Figures from January revealed growth in November, but the 0.1% expansion was less than expected.