Ministers have finally signed off plans for Heathrow’s third runway after years of debate that have cut across party – and Cabinet – lines.
It’s an extremely sensitive issue at the moment, with strong views from all sides – including from BA boss Willie Walsh, who said ministers would be “foolish” to sign a blank cheque for Heathrow expansion.
But yesterday, Conservative MP Justine Greening launched a scathing attack on the government for its agreement with Heathrow Airport Limited, saying: “The taxpayer has to cover all their costs if things go wrong.”
After further investigation by FactCheck, the government is refusing to say whether it has given Heathrow Airport Limited a special deal that wasn’t offered to rival airport schemes.
Will the taxpayer have to cover the cost if the Heathrow deal collapses?
Greening points to the “Statement of Principles” between Heathrow Airport Limited and the government.
The document says it isn’t legally binding. But Greening highlights a paragraph stating that Heathrow Airport Limited “reserves its rights” to recover its costs if the government backs out of the scheme.
The Department for Transport told FactCheck that “[Justine Greening’s point] around potential financial liability has been taken out of context from a non-legally binding document, which makes clear that it gives Heathrow no legal right to any costs or losses from Government should their scheme not proceed.”
Both sides have a point here.
The paragraph immediately before the one Greening highlighted says that the Statement of Principles document does not in itself give Heathrow Airport Limited any right to sue the government.
But the next paragraph reaffirms the legal rights that Heathrow has independent of the document to pursue legal action if they want.
The Transport Minister, Jesse Norman, told Parliament today that this controversial clause “is in the nature of a standard document […] and what the document does is simply to allow Heathrow Airport Limited to reserve rights that it would normally have under commercial law”.
But, as Greening had asked: “If it doesn’t legally matter, why did Heathrow Airport Limited have it in a Statement of Principles?”
Has the government given Heathrow Airport Limited a sweetheart deal?
The transport minister pointed out that the Statement of Principles between the government and Heathrow Airport Limited is not the only document of its kind.
Norman said: “Versions of the same document were also agreed with promoters of the other shortlisted schemes – Gatwick Airport Limited and Heathrow Hub Limited* – but those of course fell away when Heathrow northwest runway was recommended as the preferred scheme by government.”
He told the Commons: “So this is not a one-off deal or any kind of special arrangement with Heathrow itself.”
But the only way to verify the claim that Heathrow Airport Limited has not received special treatment is to look at the equivalent agreements between the government and the other two bidders.
We asked the Department for Transport if we could see the Gatwick and Heathrow Hub documents. They said no on grounds of commercial sensitivity.
We also asked the department whether the Gatwick or Heathrow Hub statements ever affirmed the right of the airport promoters to sue the government if the schemes fell through, as the Heathrow Airport Limited agreement does.
They said they couldn’t discuss the detail of the documents because they were commercially sensitive. They said that all three documents were broadly similar in structure, but that each would have different requirements.
In other words, the government has refused to say whether it gave Heathrow Airport Limited a special clause – that wasn’t offered to Gatwick or Heathrow Hub – allowing the company to sue if the deal falls through.
Does the clause really matter?
The government has consistently said that whether that clause is in the agreement or not is irrelevant. It maintains that the taxpayer will not be made to cover Heathrow’s costs if the government backs out.
But there are still unanswered questions over the exact wording agreed between the government and the different companies who bid for the various airport expansion schemes.
The government won’t let us see all the documents and won’t answer our direct questions on this issue, so we can’t say for sure whether Heathrow has received special treatment.
*In case you’re wondering, Heathrow Hub Limited put forward a proposal to extend the length of the existing runway, while Heathrow Airport Limited is planning to build a whole extra runway. Heathrow Airport Limited has been selected by the government as the preferred option.