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Press Release: New Report Warns LBA Expansion Would Be 'Poor Value for Money'

New report warns that Leeds Bradford Airport expansion would be ‘poor value for money’ and could take £1 billion out of the local economy

Today the Group for Action on Leeds Bradford Airport (GALBA) has urged West Yorkshire councillors to read a new report by the New Economics Foundation (NEF). The report warns that airport expansion could see more than £1 billion taken out of the local economy, and represents poor value for money against official government criteria. The new NEF report is a response to an earlier assessment, by Volterra Consultants, that claimed LBA expansion would be good for the local economy.

In their assessment of Volterra’s report, NEF identified errors in Volterra’s calculations. In particular, NEF highlighted incorrect assumptions about how much money is lost to West Yorkshire’s economy from outbound tourism. Volterra said the money people spend in the region before going on holiday (eg on travel agents, clothes or sports equipment) compensates for losses to the local economy from holiday makers spending abroad. NEF agree that international tourism still involves some UK spending. However, this spending has one key feature which Volterra ignored - it would have happened anyway.

Dr Alex Chapman, lead author of NEF’s report said: “Volterra claimed that outbound tourism related spending which takes place within the UK ‘cancels out’ losses from the amount spent abroad. This is incorrect because the UK spending they refer to would take place with or without the airport. The airport does not create new money. If passengers were not travelling overseas via LBA they would spend this money elsewhere in the regional economy, most likely on some other form of recreational or leisure related purchase. Our primary concern should be the spending driven abroad by airport expansion and the damage this could do to the Leeds City Region economy.”

Dr Chapman continued: “The proposed expansion of LBA has a number of different risks attached to it, particularly the loss of local economic activity, underperformance in terms of job creation and of course climate impacts. The appropriate way to manage these risks is to look at different scenarios which could play out. We tested five different scenarios and under all of them, the proposed expansion represented ‘low’ or ‘poor’ value for money against official Department for Transport criteria.”

NEF’s report sets out five possible scenarios. LBA expansion is shown to represent ‘poor’ value for money against official government criteria in three out of the five scenarios, and ‘low’ value in the two other scenarios. The report also exposes the myth that LBA expansion would simply draw existing travellers away from Manchester airport. Evidence from the Civil Aviation Authority shows that regional airport capacity has grown dramatically over the last 20 years - and so has the total number of regional airport passengers. Therefore it is logically impossible to claim that airport expansion in one region only results in people relocating from an airport in another region. In fact, airport expansion encourages people to travel more frequently, leading to an overall increase in air travel and an overall increase in greenhouse gas emissions.

Chris Foren, chair of GALBA, said: “Our local businesses will need all the support they can get to recover from the Covid crisis. LBA expansion would do the opposite - it would take money out of the region. Of course, no one is saying people should never go abroad on holiday. But the evidence shows that when airports expand, people fly away more often, which means they spend less money here and more abroad.”

Chris added: “NEF’s warning about the damage that LBA expansion would do to our economy comes a week after the Committee on Climate Change told the government there should be no airport expansion across the UK. Why? Because of the damage that flying does to our climate. We all know we must cut greenhouse gas emissions to tackle the climate emergency and we can do this - we just need to make the right choices now for our future.”

Additional notes:

1) Photo: a photo of GALBA members at LBA is attached.

2) All UK airports plan to expand: further details can be found here.

3) Key conclusions of NEF’s new report: a copy of the full report is attached

NEF Leeds Bradford_Volterra response_15
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NEF present important evidence, derived exclusively from official datasets (as opposed to industry-funded reports), which suggests that applying lower displacement rates to outbound tourism costs should be considered. Specifically:

  • Evidence that LBA’s share in the UK’s outbound air-travel tourism spending deficit is significant, and could already be costing almost £1 billion per year

  • Evidence that growth in departures from Leeds Bradford airport is generated from new passenger departures, not passengers who would otherwise have departed from other airports.

  • Evidence that suggests that airport expansion would in fact encourage individuals to switch their spending away from local recreation and culture spending.

In 2019 inbound air travellers arriving in the UK from overseas spent £24.9 billion. In the same year, outbound air travellers leaving the UK for visits abroad spent £51.1bn. That means the UK operates a net tourism spending deficit for air travel of £26.2bn. LBA’s share of this deficit would be around £967 million, or £242 per passenger per year. This deficit is partially constrained by passenger numbers, and passenger numbers are partially constrained by airport capacity. LBA wants to increase passenger numbers by 72%.

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