Supporting Evidence for Gatwick Airport Second Runway

Worthing and Adur Chamber has supported the campaign for the second runway at Gatwick Airport. Below is a copy of speech given by Jeremy Taylor as the business representative for our area.

Witness Statement for Airports Commission – 16th Dec 2014

Jeremy Taylor

I am Chief Executive of Gatwick Diamond Business.  We have 350 member businesses who employ around 50,000 staff.  Earlier this year we consulted with our own membership and found that 92% were in favour of the second runway.  

This organisation started 60 years ago on Manor Royal Business Park.  This was the catalyst for the development of probably the first airport economy in the world and the Gatwick Diamond.  The large businesses that moved here in the 1950’s developed a supply chain within and close to Crawley.   As Manor Royal and Gatwick Airport expanded, that supply chain attracted further businesses and now we have a £21bn sub-regional economy (the Gatwick Diamond), centred on the largest business park in the UK.

Within the region, there are a large number of business representation organisations, so I also speak today on behalf of a number of these and can supply a list of those to you (*see below).  Between them they represent in the region of 10,000 businesses and an employee workforce in excess of 200,000.  These organisations’ research shows a similar level of support for the second runway at Gatwick as within our organisation. 

Naturally there are some businesses with questions and concerns and I shall return to those later.

In our view, an Airport brings Economic diversity and this is very well evidenced at Gatwick.  In terms of our membership, only 12% are in the aviation, airport or tourism related industries.  The area boasts many household name companies that choose to be here as a result of the communications (air, rail and road) and skilled people in the region. 

The Gatwick Diamond is home to 45,000 businesses with an employee workforce of 400,000, and has six industry sectors which are particularly strong.  One sector is related to aviation, the others are:
•    Advanced Manufacturing and Engineering,
•    Financial and Professional Services,
•    Life Sciences, Health Technologies and Medical Devices,
•    Environmental Technologies
•    Food and Drink

One major employer in Medical Devices, Elekta, has recently committed to investing tens of millions into a global centre for research, creating hundreds of high-end manufacturing and research jobs.

The other leading company in this field, Varian, is also based in Crawley.  They are both here because Gatwick and the surrounding infrastructure brings them closer to their supply chain and their clients. 


There is no question that the second runway will bring an increase in Employment levels, particularly as Gatwick has a real impact on the local economy; 43% of Gatwick’s operational spend is with local suppliers. 

There is understandably some concern how these jobs will be filled. 
We have already seen the plans to develop public transport and the road infrastructure around Gatwick, which will allow other areas to rightly benefit.  We can see employment opening up for those who live in real disadvantaged areas along the coast and into London.  And while those employees are working here they will in turn spend money in the local area.
Furthermore, the Gatwick Diamond currently has a daily outflow of 110,000 commuters who work elsewhere.  We are sure that a significant proportion of those would rather work locally than have to travel.

I would now like to talk about Competition and demonstrate why growing Gatwick is better, not just for the region, but for the Country.

One of the key benefits to come out of the sale of Gatwick in 2009 has been the increase in competition on routes. 
This can be shown in the price differential achieved between Heathrow and Gatwick on the Moscow Domodedovo Route. 
A search for a 4-day return direct ticket in early February, with luggage and reserved seats showed £138 from Gatwick versus £1,198 from Heathrow.  As a business person looking for new opportunities, the majority of SMEs will choose the former price.
In a similar search for tickets to San Francisco from Heathrow, there was only a £70 differential between competing airlines at the same airport.

I am not here to attack individual airlines, but to demonstrate that should the next runway be built at Heathrow, airlines will congregate and there would be less competition; the price of trading internationally will rise.

Creating capacity at Gatwick will also bring better and more affordable connectivity to the regions.  Air connectivity to London is vital to those further parts of the country where road and rail travel are impractical and more expensive.  Even at the maximum of £15 per passenger, the relative difference in landing charges means that Gatwick will still be affordable for domestic airlines, and far more affordable than Heathrow.


Resilience
In business, it is important to have a capacity to cope, particularly when things go wrong.  By expanding Heathrow, the airport capacity will be concentrated in one place.  By developing Gatwick, there will be enhanced resilience in the London network with two world class airports where competition means lower costs and higher standards for the customers.

Travel costs
Travel costs to the departure point are of great interest to the business community, as they are to the leisure traveller.  I would like to illustrate this by referencing one of our businesses that has a French parent and so travel to and through Paris is a necessary part of their business. Only this year we have seen Paris back on the Gatwick route map.  Previously, this company had spent over £130,000 in travel costs reaching Heathrow.

With more routes coupled to the improvements in public transport access to Gatwick, then the costs of travel to Gatwick are coming down while the convenient ‘travel to airport’ footprint is expanding. 


Affordability
The Gatwick option is the most affordable for the country.  We also speak as taxpayers, and let’s not forget that the business community is an enormous contributor to the Exchequer. 
If there was a simple choice between a scheme that could cost £billions of public money when a privately funded alternative is available, then it does not make sense, especially in these difficult times, to pursue the one that will be funded from taxation. 
Gatwick have assured us on many occasions that it is self-financing and that there will be no cost to the taxpayer.


Future of Aviation
As has been made quite clear in the Commission’s findings, the future of aviation growth is hard to measure.  In 2003, Lo-Cost aviation was seen as a blip yet we now see that EasyJet and Norwegian carry the vast majority of Gatwick passengers, while some Charter airlines are pursuing a lo-cost model of operation. 
Most interestingly for me, is how business travellers have increased their use of Gatwick, an airport that used to be called a ‘bucket and spade’ airport.  But no longer; in only 4 years, we have seen an increase where 20% are business travellers, which in real numbers is now 7.6m. 
The future of the ‘Hub’ model is also under question as aircraft manufacturer order books show a far higher interest in aircraft that will serve two points directly.  The idea of London maintaining itself as a hub is diminishing and, with only 14% of London’s travellers using it as a hub, why should aviation policy be structured around the convenience of those few?


As I stated earlier, there are Questions to be addressed.
Around 250 businesses are likely to lose their premises.  We have been working with the Airport to address this and it is encouraging to see that Gatwick is looking to support any business that has to relocate. 
We do expect the Airport to provide on-campus office and other employment space, but there will be a question over leasing rates, particularly for some of the warehouse and storage businesses that are in the currently safeguarded land. 
We would encourage the Airport to work with Local Authorities and other developers to find alternative and affordable sites for those businesses as they are an important part of the local economy.

There is also a concern on the impact on skills availability.  We can see that there are a number of initiatives that should address this and look forward to greater detail should Gatwick be taken forward. 
As I mentioned earlier, there is a good opportunity to change local people’s commuting habits and so fill a number of these jobs from those who already live here.

In terms of the construction workforce itself, the large new development at Westfield Croydon will just be finishing as Gatwick’s construction work starts.   Those builders, engineers and other construction professionals could then move to the Gatwick site almost immediately.


Our final question is for the Commission itself as we can see that the impact of a second runway means different things to different people subject to their location.  Whilst we fully understand and empathise with the relatively small number of people that will be affected by noise, there is a much, much wider area and population that will benefit economically.  We feel it is important that the economic impact is taken across an area measured by a 90 minute travel zone.

Thank you for the opportunity of speaking


* I have agreement to speak on behalf of
Battle Chamber of Commerce
Brighton and Hove Economic Partnership
Burgess Hill Business Park Association
Chichester Chamber of Commerce & Industry
Crawley and Gatwick Chamber of Commerce
Croydon Business Improvement District Company
Eastbourne Chamber of Commerce
East Grinstead Business Association
Federation of Small Business (Regional)
Gatwick Diamond Business
The Gatwick Diamond Initiative
Hailsham Chamber of Commerce
Hastings Area Chamber of Commerce
Haywards Heath & District Business Association
Lewes Chamber of Commerce
Newhaven Chamber of Commerce
Peacehaven Chamber of Commerce
Seaford Chamber of Commerce
Worthing and Adur Chamber of Commerce