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In 2020, Rachel Reeves, the MP for Leeds West and Pudsey, was clear why she opposed expansion of nearby Leeds Bradford airport. It would, she said, “significantly increase air and noise pollution”, so on environmental grounds, it should not happen.
By the autumn of 2021, as shadow chancellor, Reeves was the senior Labour figure chosen to lead her party’s hugely ambitious plans for a green industrial revolution.
It was Labour’s big idea: “going green” – leading the way in new renewable technology – would kill two birds with one stone, creating economic growth for the UK while saving the planet. The words “green” and “growth” sat neatly together.
“I will be a responsible chancellor. I will be Britain’s first green chancellor,” Reeves told the Labour conference that year. A Labour government would pump £28bn a year into a green energy revolution, creating jobs and prosperity, and ensuring a safe world to live in for future generations.
Last week, however, in the minds of some increasingly disillusioned figures in her own party, Reeves had surrendered the right to call herself Britain’s first green chancellor barely seven month into her time in office.
With Reeves already having watered down the £28bn pledge well before the general election, her announcement on Wednesday backing a third runway at Heathrow – alongside ideas for transforming the area between Oxford and Cambridge into “Europe’s Silicon Valley” – was all about hunting for economic growth.
But, it seemed, the environment and climate crisis had been quietly sidelined. Sadiq Khan, the mayor of London, was appalled. Reports surfaced – and were not denied – that several ministers, including the energy secretary, Ed Miliband, had spoken out at cabinet against the plan because it would run directly contrary to Labour’s supposed green agenda and climate commitments.
One senior party figure said: “If we do this, we might as well just forget climate change now.”
Another source was fuming: “The green part of the bargain has been dramatically de-emphasised. We no longer talk of the green route to growth. Just growth.”
Among environmentalists, the reaction was one of cynicism and weary bemusement more than anger.
“It was weirdly muted from the green lobby because everyone knows that a third runway at Heathrow is simply never ever going to happen,” said one environmentalist. “The politics are nightmarish, it will take for ever, the first planes would not take off until 2040, it would mean rerouting the M25, which is insane, probably mean us breaching our climate commitments, and it will not create anything like the economic growth she claims.”
Many Labour people say the Heathrow element of the growth push smacks of desperation. The chancellor herself insists she backed Heathrow expansion in 2017 and that nothing will go ahead it if does not fit with the UK’s international climate crisis commitments. But the worries about her approach are spreading. “The upsides of going ahead with Heathrow are very few, while the downsides are huge – it is just not very good politics,” said a party insider.
Since the turn of the year, Reeves has been desperate to get the business community back onside after her unpopular budget hit companies with big national insurance rises.
The urgent need to boost growth in order to bring in revenue became all the greater in early January when a bout of jitters rocked the bond markets, in turn raising questions about the UK government’s ability to service its debts. “That was the time they got spooked,” said a source. “The Heathrow idea didn’t really come back into view until the beginning of this year – until after the market uncertainty.”
Perhaps most worrying for Reeves is not the political objections, but the way her justifications for putting Heathrow expansion back on to the agenda have been treated with widespread scorn.
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Aoife O’Leary, chief executive of Opportunity Green, a campaign group, has studied the arguments around sustainable aviation fuel, which Reeves says has become a “gamechanger”, and describes them as “essentially a mirage”.
She says: “Yes, these fuels are biofuels made from crops, cooking oils and other sources of plant biomass. But producing them takes up huge amounts of land, endangering food security and biodiversity.
“Indeed, very little of these fuels even exist today and producing them at anything like the scale that will be needed to decarbonise aviation would be totally incompatible with any notions of sustainability.
“Purchasing these fuels will send even more money outside the UK as most ‘sustainable’ aviation fuel comes from abroad, with wood pellets from overseas forests imported into the UK just to be burned for jet fuel.”
In her speech, Reeves cited the most recent study from the consultancy Frontier Economics as concluding that a third runway at Heathrow “could increase potential GDP by 0.43% by 2050”. It has since been confirmed that the survey in question was commissioned by Heathrow itself and is based on data it supplied.
“It is very concerning that the chancellor appears to be basing her support for Heathrow expansion on a figure from a report commissioned by Heathrow airport,” said Alex Chapman at the New Economics Foundation. “Even more worrying is the fact that the methodology they have applied is one that the Department for Transport has previously decided is not fit for purpose and that the report uses forecast data supplied by the airport itself.”
Chapman added: “Heathrow expansion represents a major threat to the UK’s climate goals and flies in the face of scientific advice. To ensure that the claimed economic benefits are concrete, assessments should be carried out by independent government economists following best-practice methodology.”
Inside the Treasury, the search for new sources of economic growth widens by the day. It is said to be the exchequer more than No 10 that is pushing an ambitious, bold reset with the EU over post-Brexit trade. Reeves has talked of leaving “no stone unturned”.
Some close to the chancellor suggest that she is deliberately pushing the boundaries. One said: “In a sense, she has not that much to lose. If these things don’t work, she can at least say she was the one who tried.”
