Heathrow-Gatwick link criticized by business leaders

Updated: 2011-10-11 20:37

By Cecily Liu (chinadaily.com.cn)

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LONDON - A radical plan to link Britain's two largest airports with a 15 minutes rail service will not improve Britain's competitiveness in securing trade deals with emerging markets like China, experts said.

Linking London's Heathrow and Gatwick airports, the proposed "Heath-Wick" rail is being closely examined by British ministers as an alternative to the politically unpalatable introduction of Heathrow's third runway.

"The proposal is a spoiling tactic," said Neil Chesters, manager of Frontier Economics, a consultancy firm.

"Adding a third runway at Heathrow would potentially link London with more Chinese cities by direct flights and increase the frequency of existing flight routes. But the Heath-wick rail simply connects an overcrowded airport with another that specializes in short haul flights," he said.

A Frontier Economics report released last month showed that Paris and Frankfurt already boast 1000 more annual flights to the three largest cities in China than Heathrow.

The report also estimates that the UK economy is losing £1.2bn annually as trade goes to better-connected European competitors.

Stephen Perry, Chairman of the 48 Group Club, a business group, said that while the Heath-wick plan is not ideal, planning controls make any real solution difficult.

"The Heath-wick proposal is an attempt to help the UK face the new world in the right way," he said, adding that because a lot of Britain's infrastructural development happened in the 19th century industrial revolution, upgrades will satisfy both Britain's internal needs and trade relations with emerging markets.

"Inconvenient transport links would make the initial line up of trade deals time consuming, especially for businesses in the fashion industry that send buyers out to choose products in China," said Richard Wellings, Deputy Editorial Director of the Institute of Economic Affairs, a think tank.

"I just don't see the Heath-wick plan creating a single airport hub. If the problem of over-capacity at Heathrow is not addressed, European multinationals that interact extensively with China will relocate their operations to cities with better connectivity like Frankfurt or Armsterdam," Wellings added.

Colin Stanbridge, chief executive of the London Chamber of Commerce and Industry, also warned against this trend. "In these times of high mobility, businesses can easily relocate away from London, or decide not to come here at all, choosing to provide jobs and generate income where better connectivity exists."

Stanbridge added that a third runway at Heathrow is the only solution to ensure that Britain “remains ahead of its global competitors.”

A third runway at Heathrow was initially proposed in the UK government's 2003 aviation White Paper and the green light was given by the then Transport Secretary Geoff Hoon in 2009.

The Coalition government cancelled the plans upon taking office last May, but business leaders continued their lobbying efforts.

Colin Matthews, Chief Executive of BAA, which owns Heathrow, said: "The centre of gravity in the world economy is shifting and Britain should be forging new links with emerging markets. Instead we are edging towards a future as an island cut-off from some of the world’s most important markets."

A recent survey published by the Confederation of British Industry (CBI) showed that 41% of businesses are dissatisfied with the UK’s infrastructure links with emerging markets.

Sara Parker, CBI Director London region, said: "If we are to make the most of the opportunities that exist for UK exports, this has to change."

Stephen Phillips, Chief Executive, China-Britain Business Council, said: "For companies to win and conduct effective business in China it is often essential for them to visit the country regularly."

Philips added that many business opportunities exist in China's fast-growing regional cities, in addition to Beijing and Shanghai to which London currently has direct flights.

The Department for Transport said a draft aviation policy would be published for consultation next spring.

"We are seeking views on the key issues which need to be addressed, including the importance of a UK hub airport and whether it might be possible to create a 'virtual hub' by improving connectivity between existing airports,” it said in a statement. “This proposal will form a useful contribution to the debate."