Maplin: the Treasury and London's third airport in the 1970s
Author: Duncan Needham
Date: 2010-10-26T23:00:00+00:00
Keywords: Local government and services
Description: Debate in the 1970s about London’s third airport offers interesting parallels for today’s policy makers grappling with the need to increase airport capacity. Like ‘Boris Island,’ the proposed Thames estuary airport, Maplin Sands, was abandoned in 1974. Dr Duncan Needham, of Cambridge University, considers the many factors in this decision and suggests that the solution today may be hiding in plain sight.
Publisher: History and Policy (historyandpolicy.org)
Rights: Copyright History & Policy, 2014

Maplin: the Treasury and London's third airport in the 1970s by Duncan Needham.

Published in Great Britain in 2014 by History and Policy.

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Policy Papers

Maplin: the Treasury and London's third airport in the 1970s

Duncan Needham

CONTENTS

- TITLE PAGE
- COPYRIGHT
- POLICY PAPER
- FUTHER READING

Policy Papers

Maplin: the Treasury and London's third airport in the 1970s

Duncan Needham

Executive Summary

- Having short-listed three sites (two at Heathrow, one at Gatwick) for additional London airport capacity, the Airports Commission will publish its final report in summer 2015. Meanwhile the Commission has concluded that ‘substantial disadvantages’ outweigh the potential benefits of a new airport on reclaimed land in the Thames Estuary.

- In 1970, a previous airports commission, the ‘Roskill Commission’, rejected an estuarine airport and recommended that London’s third airport be built in rural Buckinghamshire.

- The Heath government rejected the Roskill Commission’s recommendations and HM Treasury advice on political grounds and began work on an airport on reclaimed land in the Thames Estuary at Maplin Sands.

- In 1974, Maplin was abandoned for a variety of reasons, including higher fuel costs in the wake of the oil shock, the need to reduce public spending and advances in aircraft technology.

- The failed attempt to build a new airport on reclaimed land in the Thames Estuary in the 1970s has many parallels today and offers lessons to policy makers grappling, once again, with the need to increase London’s airport capacity.

Introduction

In April 1971 the Heath government announced that London’s third airport would be constructed on reclaimed land at Maplin Sands near the mouth of the Thames Estuary.  Ministers rejected the findings of the Roskill Commission, which, after two-and-a-half years of deliberation, had recommended that the new airport be built at Cublington in rural Buckinghamshire. Situated 50 miles from central London, Maplin was the most expensive of the four options short-listed by Roskill. It was also the least attractive to the airlines.  Three years later the successor Labour government scrapped the project.

This policy paper explains why the Heath government overrode the Roskill Commission to choose Maplin, and why the project was subsequently abandoned. It focuses on the role played by key Treasury officials, most of whom were opposed to Maplin from the outset. In 1974 former Ministry of Transport economist Christopher Foster argued that these Treasury officials had ‘failed to perform their function’ of scrutinising a major public expenditure project. Former Board of Trade official John Heath further suggested that Maplin was symptomatic of an inability to manage infrastructure projects characterised by ‘a long delay between decision and execution, considerable uncertainty, large scale, and government domination’. Did the Treasury fail with Maplin? And what are the lessons for the management of large infrastructure projects today?

The debate over London’s third airport

By the late 1960s, the assumption had long been that Stansted would house London’s third airport. Indeed, Gatwick had been chosen over Stansted as the second airport in 1953 only because a period of Cold War intensification required more military air activity over East Anglia. However, well-organised local opposition to Stansted expansion produced a parliamentary rebellion in 1967. There was also a legal problem. In November 1967, the little-known Council on Tribunals ruled that, since the latest Stansted proposal involved a new runway alignment, there must be a new planning inquiry.  With Heathrow expected to reach capacity in 1970, and noise levels in parts of West London becoming increasingly intolerable, the Labour government appointed the Roskill Commission ‘to enquire into the timing of the need for a four-runway airport to cater for the growth of traffic at existing airports servicing the London area, to consider the various alternative sites, and to recommend which site should be selected’.

The Commission’s use of the latest techniques in cost-benefit analysis attracted favourable comment. Its choice of Cublington did not. As historian David McKie (1973) points out:

There was never any chance when the Roskill Report finally appeared in January 1971 that the recommendation of Cublington would be accepted.  Politically it was already stone dead; killed by a combination of mounting public concern about the environment and the existence in the Commons and the Lords of a well-marshalled lobby which would have defeated the Government had it tried to go ahead.

There had been a change of government by the time the Commission reported. The new Prime Minister, Edward Heath, commented that the report ‘seems likely to give us a good deal of trouble’.  Drawing from his 1940s experience in the Ministry of Civil Aviation, Heath revealed: ‘I have my own very clear ideas about what will have to be done – and it had best be done quickly’, before conceding, ‘I will read the report first’. The Prime Minister was:

of the opinion that the pressures on the environment which would be created by a site inland, such as the one at Cublington, would be so outrageous that they must be allowed to outweigh any small financial advantage of a more central site.  I therefore favour siting the Airport, if it is necessary, at Foulness.

(During 1972, references to ‘Maplin’ displaced the less-euphonious ‘Foulness’). But Foulness had only made the short-list at the insistence of one dissenting member of the Roskill Commission, the urban planner Colin Buchanan. It had come 13th on the long-list, behind Stansted (ninth) whose charms, so evident to successive government ministers, were less apparent to Roskill’s technocrats. The airlines would have to be coerced to shift their operations from Heathrow to the Southend peninsula.  And the road and rail links would blight a large swathe of South Essex.

The Treasury view

The Treasury as a department was sympathetic to the Roskill conclusion in favour of Cublington against Foulness/Maplin. The cost-benefit analysis showed that the extra time passengers would spend travelling to and from the Southend peninsula meant Maplin would be viable only with subsidies. While subsidies would reduce the chances of Maplin becoming a ‘white elephant’, they would do nothing to eliminate the economic disadvantages vis-à-vis the other sites short-listed by Roskill. There would be an opportunity-cost to the taxpayer and a misallocation of resources.  Under-Secretary Michael Bridgeman commented: ‘to my mind, the case against Foulness is conclusive, and the real debate now ought to be the choice between Cublington and Thurleigh [the third Roskill site in Bedfordshire]’. His colleague Peter Lazarus agreed: ‘there is no reasonable doubt about the general conclusions to be derived from the figures which clearly show that Cublington should be the preferred solution’. Indeed, Lazarus was concerned that the Treasury representative on the committee set up to advise ministers, Deputy Secretary Raymond Gedling, was taking too soft a line:

I know that you take the view that Ministers will not in the event be prepared to consider an inland site, but this does not necessarily mean that the Official Committee, which has been charged with looking at the facts, should go out of its way to make it easy for Ministers to reach such a decision.

As Assistant Secretary Gordon Downey pointed out ‘from a purely Treasury point of view, I think our list of preferences (in descending order) should be (i) Cublington (ii) Thurleigh (iii) Foulness (iv) Postpone a decision’.

It all came to naught. On 17 March 1971, the Ministerial Committee on Regional Policy and the Environment agreed with Heath’s prior conclusion in favour of Maplin. But Treasury officials had not yet given up. On the eve of the full Cabinet discussion, Downey urged the Chancellor, Anthony Barber, to continue pressing the merits of both an inland site and a tax on air travel. Failing that, he was advised to recommend postponing a decision. But with Chief Secretary Maurice Macmillan deciding ahead of the Cabinet discussion that ‘the choice of any inland site would be politically impracticable’, Treasury officials would have to ‘play it long’.

Playing it long

The Cabinet concluded in favour of Foulness on 25 March 1971. There were three issues to resolve before reclamation work could begin: relocation of the army’s munitions testing facilities at neighbouring Shoeburyness; the precise location of the runways; and the extent of private sector involvement in the project. The army had been testing ordnance at Shoeburyness since the Napoleonic Wars and were reluctant to leave. After a local planning inquiry ruled out relocation on the Pembrokeshire coast in 1971, Ministers alighted upon Tain (near Caithness), only for that to be ruled out on political grounds in 1972. Despite trawling through another 85 sites, a replacement for the flat sands of Maplin could not be found, and munitions testing continues there today.

In 1971, the Treasury estimated that each year Maplin was delayed would save at least £22 million in public expenditure.  This was increasingly important as it became clear during 1972 that Heath’s ‘dash for growth’ was overheating the UK economy.  Nonetheless, there is little to suggest Treasury officials conspired to delay Maplin by holding up the relocation of the munitions testing facility. They could rely on the Ministry of Defence’s inability to relocate in the face of local opposition wherever a new site was proposed. But officials were alert to the possibilities for undermining the airport proposal. In early 1973, the Treasury’s Margaret Elliot-Binns recommended:

delaying tactics for a few months, while the pressure groups against Maplin do their work, while Ministers find it more and more difficult to find sites for the Shoeburyness facilities and while the pressure on public expenditure tightens.

Treasury involvement in selecting the precise location of the runway sites at Maplin was limited to costing the options. Officials favoured the cheapest, ‘Site A’, which, being closest to Southend, would mean less-expensive transport links.  Site A would also mean less delay, since it was marginally less affected by the munitions testing at Shoeburyness. But precisely because Site A was closer to Southend, Ministers rejected it in a favour of a more northerly site. Having bowed to public pressure to select Maplin in the first place, they argued that the cheaper/noisier site would cause further delays by forfeiting the support of the local council.

The third issue to resolve before reclamation work could begin was the extent of private sector involvement. The Thames Estuary Development Company (TEDCO) included both the Port of London Authority, responsible for developments in the Thames, and Southend Borough Council. TEDCO had given evidence to the Roskill Commission which had concluded that the company’s proposed scheme for a combined airport/seaport/industrial complex at Maplin was not in the public interest. The taxpayer would bear the full risk of the development failing. Private sector interest in Maplin focused on the prospect of industrial development. But this would conflict with the government’s regional policy, whereby development areas in the outer regions took priority over the South East. It would also create problems of ‘over-crowding’ in South Essex.  Servicing the airport would require a new town the size of Coventry. Additional industrial development would put further strain on the local economy. Moreover, given that the state can almost always raise funds more cheaply than the private sector, private sector involvement would likely raise the overall cost.

The Treasury might have been expected to welcome private sector involvement since it would reduce the cost to the public purse. Instead, officials sided with Roskill.  Downey advised that ‘the advantages of a Seaport/Airport project claimed by the Thames Estuary Development Co and others are not such as to justify crediting Foulness with an advantage’. In December 1971, after a series of meetings with the consortium, Environment Secretary Peter Walker concluded, as the Roskill Commission and Treasury officials had several months earlier, that ‘the TEDCO proposals do not stand up to examination and should be rejected’. Private sector involvement would be limited to representation on the government-sponsored Maplin Development Corporation.

The troubled Bill

With the Cabinet deciding on the runway location and the Maplin Development Corporation taking shape in the summer of 1972, officials could begin drafting the Maplin Development Bill. There was an immediate problem. While the Port of London Authority had the power to build a ‘dumping harbour’ in the Thames, it could not reclaim land.  Nor could the British Airports Authority, which would ultimately own the site. The major reclamation work could not begin until the Maplin Development Corporation had come into legal being, i.e. once the Bill had received Royal Assent. But because the development would impact upon specific individuals and groups, it was designated a ‘hybrid bill’.  Private petitions would have to be heard at the committee stage, lengthening the legislative process. To satisfy Parliamentary ‘expediency’, reclamation work could not commence until these petitions had been satisfied. To start work before then would prejudice the interests of the petitioners, opening up the threat of legal action. But work had to commence in the spring of 1973 if the first runway were to open in 1980 as planned.

The Bill received its first reading on 1 December 1972. The second reading was postponed when it emerged that growing Conservative backbench opposition might overturn the government’s majority. Local opposition was mounting as it became clear that the ‘world’s first environmental airport’ would require a large new town and major transport links through an already-congested part of Essex. MPs questioned the need for a new airport given that larger, quieter aircraft were already reducing noise pollution around Heathrow. There was also the recent agreement with the French to dig the Channel Tunnel. Roskill had assumed this would have marginal impact on air traffic.  More recent surveys suggested otherwise. In the event the Bill passed its second reading in February 1973 with five Conservatives voting against the government.

Discussion within the Treasury centred on whether to enlist ministerial support to undermine Maplin. Assistant Secretary John Slater pointed out: ‘I do not believe that the Treasury (even if our Ministers were so minded) could “kill” the project without a thorough and very high-level group having firmly recommended in that course’.  Either way, it would be better to scrap the project before the contracts for the reclamation work were let. Accordingly, Elliot-Binns advised the new Chief Secretary, Patrick Jenkin, ‘to suggest that the timing of the need of the airport should also be examined so as to give an overall assessment of the feasibility, costs and benefits of various opening dates [and] to stress the very large public expenditure implications’.  Jenkin agreed that a delay would be ‘helpful in the public expenditure context…popular…[and] consistent with the latest traffic forecasts’, albeit he failed to convince his ministerial colleagues who decided that ‘it should remain the Government’s intention to achieve the earliest possible opening date’.

Jenkin was referring to new air traffic forecasts from the recently-formed Civil Aviation Authority (CAA).  As Table 1 shows, its forecasts of passenger numbers and air transport movements were higher than those used by the Roskill Commission.  However, greater ‘mixed-mode’ runway use, improved air traffic control techniques, and fewer ‘general aviation’ and ‘positioning’ flights would mean more efficient use of existing runways. The CAA estimated that the existing South East runways would be able to handle 502,000 air traffic movements in 1980, well above forecast demand of 488,000. A single runway at Maplin would suffice until at least 1990.  But so too would the existing capacity at Luton, Stansted, and Southend. The problem was no longer a shortage of runways.  It was a shortage of terminal capacity.

The CAA forecast was critical to turning the tide against Maplin. In June 1973, the government was defeated on a Conservative backbench amendment requiring Ministers to ‘to delay, vary or desist from construction of an airport on land to be reclaimed as a result of the passage of this Act’ should technical developments in aircraft negate the need for additional runway capacity. A week later the Cabinet recognised that ‘public opinion was becoming increasingly critical of the Maplin project, partly in terms of the expenditure involved but even more on the grounds that an airport at Maplin was no longer necessary’. The Treasury grasped the opportunity, with Elliot-Binns advising the Chief Secretary that ‘we have considerable doubts about whether the project is needed at all’.

The government responded to its defeat on the backbench clause by inserting one of its own in the Lords on 20 July. It stated that:

reclamation cannot be started until the Secretary of State makes a Statutory Instrument subject to annulment; and that the Order should not be made until a report has been laid before Parliament following consultation with at least the Civil Aviation Authority, the British Airports Authority, the National Ports Council, the Port of London Authority and the Maplin Development Authority.

Elliot-Binns commented that this would be ‘satisfactory from our point of view as it would ensure a thorough review of the project before heavy expenditure was committed’ and urged the Chief Secretary to lend it ‘strong support’. The Maplin consultative documents would reveal the scale of the new town and the transport links (including a six-lane motorway through South Essex) required to service the new airport. The Treasury could use the delay created by consultations required under the new clause to let popular opposition build.

The steamroller grinds to a halt

In October 1973 it was clear that while Maplin might overheat the South Essex economy, Heath’s dash-for-growth had already overheated the national economy.  GDP grew by 7.2 per cent in 1973, nearly three times Britain’s post-war average. In February, the economist Alan Walters, who had served on the Roskill Commission, had linked Maplin to rising inflation, claiming that the project would increase prices by a percentage point. By October inflation was running at 10 per cent, even before the impact of the oil shock that began that month. The Treasury was looking for public expenditure cuts to cool down the economy and Maplin was an obvious target.

What finally brought Maplin to a halt was the oil shock.But not because more expensive jet fuel would reduce passenger numbers. As befitted a scheme that was always more political than economic, it was the politics of the post oil-shock crisis that stalled Maplin. With the Bill finally receiving Royal Assent on 25 October, Environment Secretary Geoffrey Rippon was keen to let the reclamation contract.  But even the most enthusiastic Ministers recognised that it would be inappropriate to advertise a £140 million infrastructure contract while the country was enduring another three-day week as the government held out against a miners’ strike. On 4 February 1974 the Leader of the House of Commons, Jim Prior, advised, ‘we ought to get ourselves out of the wood on these economic and industrial troubles before publishing an advertisement which – even if it appears only in trade and professional journals – is bound to excite political controversy’. Three days later, Heath called a General Election on the question of ‘Who governs?’ He lost.

Labour returns to deliver the blow

The change of government provided Treasury officials with a further opportunity to undermine Maplin. In their briefings for a new Labour government, officials stressed that ‘the Treasury has all along been sceptical about the need for Maplin…There are serious doubts about the economic case…We would not rule out the possibility that it may not be needed at all’. With the new Chancellor, Denis Healey, looking for savings in his first Budget, and Labour publicly opposed to the ‘Tory prestige project’, Maplin was finished. Anthony Crosland, who had set up the Roskill Commission in 1968, was the new Secretary of State for the Environment. He advised Harold Wilson on 18 March that he was halting all further expenditure on Maplin, pending a review. Wilson replied ‘can we not be more negative more early?’ Two days later the government announced that a number of major transport projects were under review. A week later, Healey confirmed in his Budget speech that there would be no provision for Maplin in 1974/75. On 4 April the consultation documents for the new town and access corridor through South Essex were rescinded.

The Maplin Review was published in July 1974. As Table 1 shows, the forecasts for passenger numbers were below the Roskill estimates.

Table 1: 1980 London airport traffic forecasts and outcome.

| Passengers (million) | Air transport movements
| Demand | Capacity | Demand | Capacity
Roskill Commission (1971) | 56.6 | 61 | 482,000 | 478,000
CAA Report (1973) | 58 | 57 | 488,000 | 502,000
Maplin Review (1974) | 51.2a | 61b | 450,000 b | 620,000 b
Outcome | 40 | | 441,173 |

a ‘Assessment figure’ derived from interpolated range.

b Estimates for 1990.

This was partly because of the increased cost of air transport in the wake of the oil shock. But passengers would also be travelling on larger planes. The CAA raised the Roskill estimate of 162 passengers per aircraft to 225. The existing London runways would be able to handle 620,000 aircraft movements in 1990, well above forecast demand of 565,000. There was no need for Maplin. The only constraint would be terminal capacity. And it would be much cheaper to build at Heathrow and Gatwick. In any event, the existing airports would have to be developed to meet capacity until the day Maplin opened. As the Review concluded, ‘a new airport at Maplin does not obviate the substantial expansion at Heathrow and Gatwick provided for in current development plans’.

The Secretary of State for Trade, Peter Shore, formally abandoned Maplin on 18 July.  He gave seven reasons:

The new, lower forecasts for passenger numbers

No new runways would be required at the London area airports until 1990
Existing terminal facilities could handle the projected passenger numbers
Quieter aircraft would reduce noise around the existing airports
Capacity at Heathrow and Gatwick would have to expand regardless of Maplin
Developments at existing airports and diversion to regional airports might then cope with further demand
The 1974 estimate of Maplin’s cost was now £650 million – more than double the next alternative.

The Maplin Development Corporation was wound up in 1976. Nonetheless, the idea of an airport on reclaimed land in the Thames never went away, and several proposals were submitted to the Davies Airport Commission in 2012. None of them made the shortlist announced in December 2013, although the Commission did commit to further investigate the Mayor of London’s favoured site at the Isle of Grain.

Conclusions

Did the Treasury fail to check public expenditure on Maplin as both Christopher Foster and John Heath claimed in 1974? The 1972 Public Expenditure White Paper included a £1.1 million provision for Maplin in 1972/73. The 1973 White Paper allocated £6 million in 1973/74, with a further £30.1 million estimated for 1974/75.  Healey claimed that scrapping Maplin saved £17 million in 1974/75 so, even allowing for the £1.2 million spent on the Roskill Commission, it appears that, apart from the cost of civil servants’ time, total expenditure was less than £25 million. This compares with an estimated £650 million for the British share of Concorde and £200 million bailing out Rolls Royce in 1971. This was good value compared to what would have been lost building an airport that the airlines never wanted. By placing obstacles in the way, and reinforcing the obstacles that others laid, it could be argued that the Treasury helped save the taxpayer nearly £1 billion.

What lessons can we draw from Maplin for the handling of infrastructure projects characterised by ‘a long delay between decision and execution, considerable uncertainty, large scale, and government domination’? First, governments must listen to their infrastructure stakeholders. None of the major stakeholders wanted an airport at Maplin. Unless forced to move, many of them would have stayed at Heathrow, Gatwick and Luton. Most of them had been planning for a third London airport at Stansted since the early 1950s. The battle over the Competition Commission’s 2009 ruling that BAA must sell the airport suggests that, until recently, they still were. If Maplin had made economic sense, then the airlines would not have baulked at shifting operations from Heathrow and Gatwick. And even if it had worked as an airport, Maplin would have required a major new town and transport infrastructure, unacceptable from a political perspective.

Second, the Treasury can usually play it long. Officials were overruled on the decision to overturn Roskill.  They were also overruled on the precise location of the proposed runways. But while Concorde shows that determined ministers can sometimes defy economic gravity long enough to actually give birth to a white elephant, a subterranean campaign of obstruction can postpone an uneconomic project long enough for its defects to become manifest, until technological advance nullifies the problem, or until a change of government makes the u-turn politically possible.  Treasury officials used every opportunity to obstruct Maplin, whether it was the delay presented by the relocation of the Shoeburyness munitions testing facility, the need to prove the ‘expediency’ of the Maplin Development Bill, the promise of a review following the insertion of the ‘delay, vary or desist’ clause, or the inappropriateness of advertising the reclamation contract during the three-day week. By contributing to delay, the Treasury helped the environmental and economic opponents of Maplin to marshall their arguments and win the debate.

Finally, the solution may well hiding in plain sight. As the Airports Commission concluded in December 2013, two of the three preferred options for relieving congestion at Heathrow involve new runway capacity – at Heathrow (the third option being an additional runway at Gatwick). Even if Maplin had opened in 1980, an estimated £200 million (1974 values) would have been spent at Heathrow and Gatwick to cope with the forecast increase in passengers up to that point. Why invest simply to abandon the results?

About the author

Duncan Needham is a Temporary Lecturer at the University of Cambridge, a Research Fellow of Darwin College, Cambridge and Associate Director of the Centre for Financial History. He is the author of UK Monetary Policy from Devaluation to Mrs Thatcher and co-editor, with Anthony Hotson, of Expansionary Fiscal Contraction: the Thatcher Government's 1981 Budget in Perspective. djn33@cam.ac.uk

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Further Reading

- Airports Commission, Interim Report (London, 2013).

- Beckett, A., When the Lights Went Out: What Really Happened to Britain in the Seventies (London, 2010).

- Cashinella, B. and K. Thompson, Permission to Land (London, 1971).

- Civil Aviation Authority, Forecasts of air traffic and capacity at airports in the London area (London, 1973).

- Foster, C.D. et al, Lessons of Maplin: is the machinery for governmental decision-making at fault? (London, 1974).

- Hall, P. Great Planning Disasters (London, 1980).

- Helsey, M. and F. Codd, ‘Aviation: proposals for an airport in the Thames Estuary, 1945-2012’, House of Commons library (July, 2012).

- King, A.S. and I.M. Crewe, The Blunders of our Governments (London, 2013).

- McKie, D., A sadly mismanaged affair: a political history of London’s third airport (London, 1973).

- Report [of the] Commission on the Third London Airport (London, 1971).