Heathrow press releases

05 October, 2015

Heathrow expansion: Galvanising the northern powerhouse

University of Sunderland

 

  • Industry unite with Heathrow in calling on Government to deliver almost 95,000 new manufacturing jobs for Britain
  • 85% will be generated outside London and the South East
  • New research reveals Northern Powerhouse has most to gain from Heathrow expansion, benefiting from up to 1 in 4 of the new manufacturing jobs created –

Government plans for the Northern Powerhouse will be boosted by up to 26,400 new manufacturing jobs if Heathrow is allowed to expand, according to new research out today.

With the Conservative Party conference underway in Manchester, Heathrow is calling on Government to make a decision for all of Britain by giving the green light to the airport’s new plans for expansion and creating almost 95,000 new manufacturing jobs across the country.

The research, undertaken by consultancy Quod, shows that up to 1 in 4 (28%) of the new manufacturing jobs generated by Heathrow expansion would be based in the Northern Powerhouse. More broadly, 85% will be created outside London and the South East.

In keeping with the geographical spread of new jobs anticipated in the manufacturing sector, 60% of the total economic benefit predicted by the Airports Commission as a result of expanding Heathrow will be generated outside of London and the South East.

 

Range of net additional jobs in manufacturing in 2050

Proportion of total net additional manufacturing jobs in 2050 (%)

Northern Powerhouse

26,200 - 26,400

28%

Midlands

21,300 - 21,600

23% - 23%

London and South East England

13,300 - 14,100

14% - 15%

The South West

8,700 - 10,600

9% - 11%

The East of England

8,400 - 8,700

9%

Scotland

5,600 - 6,900

6% - 7%

Wales

5,600 - 6,000

6%

Northern Ireland

3,000 - 3,400

3% - 4%

TOTAL

94,900

100%

 

    

Table 1: Distribution of additional UK manufacturing jobs generated by Heathrow expansion in 2050, Quod October 2015

The manufacturing sector would be one of the greatest benefactors of new jobs fuelled by a third runway at Heathrow, accounting for more than 50% of the 179,800 total predicted by the Airports Commission. As a trade-intensive industry, the sector is expected to benefit significantly from new and improved trade links, as well as from the ripple effect of Heathrow related growth across other sectors. Additionally, manufacturing is a key part of the aviation supply chain, and is likely to benefit directly as the sector increases purchasing.

An expanded Heathrow would be a significant boost for the industry, which is responsible for over half of all British exports. Last week, figures released by the Office for National Statistics (ONS) revealed that manufacturing output in the UK remains 5.5 per cent below its level on the eve of the 2008 economic recession.

Recent research by BIS and the Government Office for Science predicts that manufacturing in 2050 will look very different from today, and will be virtually unrecognisable from that of 30 years ago. It identifies the following key characteristics of future manufacturing:
 

  • Manufacturing will be more responsive and closer to customers – including a greater reliance on global markets. Patterns of global trade and investment will determine the relative importance of the countries to which the UK exports and from which it imports;
  • High-tech is likely to remain an area of UK advantage – currently at 4.7%, the UK’s share of global high technology manufacturing exports is relatively strong. Current high-tech sectoral strengths include pharmaceuticals, aerospace, chemicals, and the automotive sector;
  •  There will be a greater reliance on higher-skilled workers as the sector moves away from elementary, process and heavy manufacturing and towards smaller more complex models.

 John Holland-Kaye, Chief Executive of Heathrow Airport, commented: “Expanding Heathrow will supercharge Government plans for the Northern Powerhouse.

“Today, airlines operating from the UK’s hub are forced to make a false choice between developing new routes to cities like Chengdu and Mexico City and maintaining domestic services. That means exporters in areas like Merseyside, Humberside and Teesside are locked out of Heathrow, Britain’s biggest port by value. Every day we delay is a day we’re restricting the growth of British business.

“It is time for Government to heed the unanimous and unambiguous recommendation of the Airports Commission. It’s time to expand Heathrow for the whole of the UK.”

Terry Scuoler, CEO of EEF, the manufacturers’ organisation, adds: “Heathrow is a global freight hub and a crucial gateway for Britain's manufacturing exporters, making its expansion the right choice for industry and the country.

“With the opportunity for growth and new jobs identified in this report, it reaffirms that it is important for the Government to make a clear choice and to press ahead with delivering this much-needed improvement to our national infrastructure.”
 

                                                                                 -ENDS-
Notes to editors:

Heathrow airport

Heathrow is one of the world’s great hubs, with regular direct services to 75 destinations not served by any other UK airport.  This makes it a rare and valuable asset for the UK – only 5 other airports in the world support more than 50 long haul destinations.

Earlier this year, the Airports Commission confirmed that expansion Heathrow at can deliver up to £211bn for the economy and 180,000 jobs while meeting EU Air Quality levels, UK climate change targets and with fewer people impacted by aircraft noise than today. 

Methodology

1.The Airports Commission (AC) estimate that an expanded Heathrow Airport (NWR) would create up to a net additional 179,800 jobs in the UK in 2050 (PwC/AC Strategic Fit: Updated GDP/GVA Impacts). Quod produced a regional disaggregation of this split based on estimates of the overall distribution of GVA effects in the future scenario at a high-level. Within this net gain, around half are estimated to be net additional jobs in the manufacturing sector.


2.This report aims to disaggregate the Airports Commission’s sectoral estimate that an expanded Heathrow Airport (NWR) would create up to a net additional 94,900 manufacturing jobs in the UK as part of the wider creation of 179,800 in total (PwC/AC Strategic Fit: Updated GDP/GVA Impacts, Table 83) by broad location within the UK, and define the sub-sectors within the manufacturing industry that are most likely to benefit from expansion.


3.The findings have been disaggregated to sub-national scale based on former Government Office Regions: The Northern Powerhouse (North West, North East, Yorkshire & The Humber), Midlands (East Midlands and West Midlands), East of England, London and South East England (Greater London and South East), the South West, Scotland, Wales and Northern Ireland.


4.The approach includes research into the sub-classification of ‘manufacturing’, through the use of overall GVA breakdown, value of sales and value of overseas export trade in goods by industrial sub-sectors, and a review of the AC / PwC’s methodology for their overarching assumptions on manufacturing within the Technical Report ‘Strategic Fit: GDP/GVA impacts’ in order to isolate the relative importance of manufacturing sub-sectors in order to give a more realistic distribution of jobs created.
 

 

 

 

Contacts

Heathrow Media Centre media_centre@heathrow.com +44 (0)20 8745 7224