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Rachel Reeves’s bid to expand Heathrow could add £40 to airline ticket

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Rachel Reeves’ new aviation plans could see plane tickets increase. (Image: Getty)

Rachel Reeves’ proposal to expand Heathrow Airport could add an extra £40 to the cost of a plane ticket. According to a Treasury cost-benefit analysis, the plan to reduce carbon emissions of an expanded Heathrow will be expensive due to the use of sustainable aviation fuels (SAF).

The Chancellor’s move, hoping to help tackle climate issues, could see the use of sustainable fuels hike the price of a single economy airline fare by £37.80 by 2040. Ticket prices would go up across the board, with no plan for those in first or business class to face the brunt of the changes.

The Treasury’s analysis states that 75% of the price of using SAF will be passed to the customer. In the document, seen by the Guardian, officials wrote that plane tickets are not expensive enough: “Ticket prices do not reflect the full social cost of flying and are not sufficiently incentivising the uptake of decarbonisation solutions such as SAF.”

Planes waiting at Heathrow airport, aerial view

Heathrow Airport could see a third runway. (Image: Getty)

Rachel Reeves is expected to use a speech on growth next week to hail the need for a third runway at the west London airport, as well as endorsing expansions at Gatwick and Luton.

However, the aviation plans could face backlash from environmental groups and senior Labour figures, including London Mayor Sir Sadiq Khan and Energy Secretary Ed Miliband. They both have previously spoken out against a third runway at Heathrow.

Mr Miliband has reportedly warned cabinet colleagues that expansion could breach the UK’s legally binding carbon budget.

On Wednesday, the Chancellor was challenged on whether Heathrow expansion would cause problems with Sir Sadiq and Mr Miliband at the World Economic Forum in Davos. She said: “This was the problem with the last government – that there was always somebody that said: ‘Oh yes, of course we want to grow the economy but we don’t like that investment, we don’t like that wind farm, we don’t like those pylons, we don’t like that airport, we don’t want that housing near us.’

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Cabinet Meeting in Downing Street

Ed Miliband voted against an expansion of Heathrow while in opposition (Image: Getty)

“But the answer can’t always be ‘no’ and that’s been the problem in Britain for a long time, that when there was a choice between something that would grow the economy and anything else, anything else always won.

“Now, of course, there are other things that matter, but when we say that growth is the number-one mission of this Government, we mean it, and that means it trumps other things.

“And so we’re making pro-growth decisions in the national interest.”

At Prime Ministers’ Questions yesterday, Sir Keir Starmer refused to comment on the speculated Heathrow plans, but said: “As a Government, we are committed to growth, we are committed to the aviation sector, and to our climate obligations.”

EasyJet chief executive Kenton Jarvis backed the pending announcement from the Chancellor, telling reporters: “We welcome the decisive action by the Government to grow the economy.

“We’ve always said that aviation, the industry, is an enabler of economic growth.”

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