An influential Tory MP has questioned the evidence behind Heathrow expansion, suggesting the Government may have gone to exceptional lengths to find a methodology that made the case.
In a letter to chancellor Philip Hammond and transport secretary Chris Grayling, the chair of the Treasury Select Committee, Andrew Tyrie, said the Treasury has specifically requested the rarely used ‘net public value’ investment measure be included in its assessment.
Of the four investment measures used to evaluate the proposals, only this seldom-used net public value measure presents a clear case for a third runway at Heathrow, Mr Tyrie said.
What Heathrow could look like with a third runway
He asked the ministers: ‘Can you provide any examples where net public value has previously been used as a measure to assess the cost-benefit case for major infrastructure projects?’
Mr Tyrie also pointed out in his letter that although the Government document acknowledged that 'the Net Present Values (NPVs) for some of the options could potentially be negative under some demand scenarios… in its reassessment of the commission's economic case… the Government has only considered one scenario’.
Mr Tyrie argued that the way the Airports Commission had assessed demand growth was ‘not in line with the guidance issued by the Department for Transport’ in that it did not cap projections of demand growth after 20 years.
He asked Mr Hammond to produce new calculations and provide ‘an assessment of the likely effect on the overall economic case’ of doing so.
Mr Tyrie also noted that the Government had made changes to the cost-benefit analysis to make the Airports Commission's assessment of costs and wider economic impacts more consistent with its WebTAG appraisal guidance.
He pointed out: ‘This has had the effect of reducing the difference in NPV between the three shortlisted schemes that the Airports Commission argued clearly favoured the economic case for expansion of a third runway at Heathrow.’
Commenting on his ongoing attempt to clarify the economic case for the decision, Mr Tyrie said: ‘Parliament is being asked to vote on the biggest infrastructure project in a generation. It is crucial that it has all the tools at its disposal.’