Boris Johnson’s refusal to back Heathrow’s third runway threatens to leave the taxpayer on the hook in a £500million court case, The Mail on Sunday can reveal.
In a move that dismayed businesses last week, the Prime Minister decided not to appeal when the Government’s official policy of expanding Heathrow was rejected on environmental grounds by judges in the High Court.
Now the MoS can disclose that documents signed off by Heathrow and the former Transport Secretary Chris Grayling in 2016 show the airport has the right to sue the Government if it pulls the plug on the project.
Boris Johnson’s refusal to back Heathrow’s third runway threatens to leave the taxpayer on the hook in a £500million court case
Heathrow is understood to have invested £520million so far on planning the expansion – and could seek to recoup this from the taxpayer if the third runway is axed entirely.
Sources told this newspaper that a permanent block on enlarging Heathrow would also threaten the Prime Minister’s own plans to build hospitals and the HS2 rail link, as well as making all future infrastructure projects up to 20 per cent more expensive as firms factor in the risk of legal complaints on environmental grounds.
Industry sources said it could become almost impossible to launch big building schemes in Britain – including expanding regional airports instead of Heathrow – without taking into account the effect on climate change.
Mark Reynolds, chief executive of £2billion construction firm Mace which has worked on Heathrow and HS2, said: ‘If projects like Heathrow, and then potentially High Speed Rail or Highways England programmes, become toxic because of the environmental impact, then what are we as a nation going to do? Are we just going to stop and say we don’t do anything?’
The defeat in the High Court last week – and the Government’s refusal to appeal – has forced Heathrow and its backers to take their case to the Supreme Court, adding at least 12 months to the project and jeopardising Parliament’s 2030 deadline for completion.
The Government’s refusal to launch its own appeal fuelled speculation that Johnson, who previously pledged to ‘lie down in front of the bulldozers’ to stop the project, was using the ruling as a convenient way to allow it to die.
Sources warned that if the Supreme Court also blocks the third runway over climate concerns, it would set an ‘extraordinary precedent’
But sources warned that if the Supreme Court also blocks the third runway over climate concerns, it would set an ‘extraordinary precedent’.
This is because the highest court in the land would be siding with judges who rejected Heathrow’s plans on the grounds that they ‘unlawfully’ failed to take into account the Paris climate change agreement, under which countries pledge to hit a ‘net zero’ carbon emissions target by 2050.
It is understood the HS2 plans, given the go-ahead by Johnson last month, do not take into account stringent climate objectives and so could hit a similar block if challenged in court.
Heathrow insists its plans do now meet the Paris climate target, meaning the Government would have no trouble satisfying the court’s order.
A Heathrow spokeswoman explained that Ministers simply needed to update the National Policy Statement on Heathrow expansion, which was overwhelmingly backed by MPs in 2018, to reflect this.
It is understood the HS2 plans, given the go-ahead by Johnson last month, do not take into account stringent climate objectives and so could hit a similar block if challenged in court
But a collapse of the project could usher in costly legal proceedings.
According to the 2016 agreement between Heathrow and the Department of Transport, the project’s ultimate failure could activate a clause allowing the airport’s owners ‘to pursue any and all legal and equitable remedies (including cost recovery)’ on the basis that the Government switches to an ‘alter native scheme being preferred by the Secretary of State or Government and/or the withdrawal of the Government’s support for aviation expansion for Heathrow Airport’.
The Government also faces claims it has failed to grasp the opportunity to throw open the doors to international business and visitors as the UK begins its post-Brexit era.
Last night, Bill Galvin, group chief executive at the £75billion Universities Superannuation Scheme – Britain’s biggest pension fund which owns 10 per cent of Heathrow – said the court decision was ‘disappointing’.
Bill Galvin, the boss of Britain’s biggest pension fund which owns 10% of Heathrow, said the court decision was ‘disappointing’
He added: ‘This is happening at exactly the same time as the Government has placed infrastructure development as a key policy initiative.
‘The expansion would bring jobs and help grow the economy around the country. Heathrow, with our support, has already promised to boost the UK economy by over £200billion, as well as create around 180,000 jobs.’
Arora Holdings, which has an alternative plan to build the runway, is joining Heathrow in appealing the judgment in the Supreme Court. Carlton Brown, its chief financial officer, said: ‘The Paris agreement isn’t binding on the UK so its ironic this is now having this impact on the UK.’
Heathrow’s spokeswoman said: ‘Last week’s ruling has meant there will be a delay in realising the benefits of Heathrow expansion until the Government remedies an eminently fixable issue.
‘Failure to fix it rules out airport growth anywhere in the country and casts doubt on other infrastructure projects, including roads and housing pledges made by the Government.’
She said Heathrow has taken a lead in meeting climate targets and is ready to work with the Government to ‘level up’ Britain.
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