London airport expansion: Former Bank of England deputy governor Rachel Lomax says ministers risk squandering infrastructure investment
A former deputy governor of the Bank of England will today urge the government to "grasp the nettle" on airport expansion or risk undermining investor confidence in the new National Infrastructure Commission (NIC).
In a speech at the British Chambers of Commerce (BCC) annual conference today, Rachel Lomax, who is a non-executive director at Heathrow Airport, will say the government should "get on" with implementing the Airports Commission’s recommendation for building a third runway at Heathrow, saying ministers should be presiding over a "golden age of infrastructure investment" given ultra-low interest rates.
"If after all the Airport Commission’s labours, the government still finds itself unable to grasp the nettle and address what is undeniably a major pinch point in our national connectivity, it will put a big question mark for investors over whether the NIC can succeed," Lomax will say. "And they will draw their own conclusions about the political risks of investing in UK infrastructure.
"If the Davies report is allowed to gather dust, it can only undermine the credibility of the National Infrastructure Commission and make its work much more difficult."
The Airports Commission, led by Royal Bank of Scotland (RBS) chairman Sir Howard Davies, first recommended building a third runway at Heathrow last July. The government said in December that it would delay making a decision on airport expansion in the south east until at least this summer, saying "more work will be done on environmental impacts" in the interim.
Lomax's warning comes just days after the Confederation of British Industry (CBI) called on the government to "give teeth" to the NIC. In a report out earlier this week, the CBI warned that the NIC "cannot afford to be way-laid by politics".
Graham Brady, the Conservative MP who chairs the influential 1922 Committee, also slammed the government this week over its move to delay a decision to build another runway, tabling a so-called Early Day Motion urging ministers to deliver a final decision by July.
Brady said the "real key" to Britain's future prosperity is "global trade with the world's most dynamic markets".
"Once the referendum is behind us ministers must prioritise a final decision about where to build a new runway and announce that decision in parliament before the summer recess.
"Every further period of delay is putting at risk the economic recovery and is a threat to our long-term prosperity."