Heathrow third runway GDP yield may be 90% less than original estimate

The economic boost from a Heathrow third runway could be a tiny fraction of previous estimates, government analysis shows, while the overall trade-off from the bigger airport could set the UK back by as much as £62.5bn. As ministers promised to speed up expansion of the London airport in the name of economic growth, documents prepared by the Department for Transport said the runway was expected to boost GDP by only up to 0.05% – 90% less than the 0.5% previously stated. The figures, described as historically bad by one economist, put the arguments for a third runway in fresh doubt. The DfT calculates the net present value of the scheme, even if entirely privately financed, to be between -£23.4bn and -£62.5bn. Net present value is defined by the DfT as the overall social value of expanding Heathrow, compared with not doing it, adding all costs and benefits. That figure incorporates between £29bn-£42.4bn in positive benefits to passengers – primarily, lower air fares – and wider economic benefits. But the DfT appraisal calculates those gains as outweighed by the social and environmental impact of the runway, which it estimates as between £58bn-£82bn. Profits at airlines and other airports are expected to fall by about £25bn, according to the appraisal . …