The Government has insisted Birmingham Airport could still play a leading role in meeting growing demand for air travel, after the Chancellor hinted he was backing Boris Johnson’s plans for a new airport in the Thames Estuary.
Midlands business leaders accused the Chancellor, George Osborne, of being “obsessed with London” following his Budget statement, which appeared to suggest new airports or runways could be built in the south.
He said: “This country must confront the lack of airport capacity in the south east of England – we cannot cut ourselves off from the fastest growing cities in the world.”
The comments were interpreted by some as meaning that Ministers could back London Mayor Boris Johnson’s proposals for a new airport in the Thames Estuary.
If so, it would come as a blow to Birmingham Airport, which has been lobbying the Government to reject the so-called Boris Island idea, and to allow regional airports to increase passenger numbers instead.
Following the Budget statement, Jan Thompson, Midlands chairman of global property firm Jones Lang LaSalle, said: “As a country, we certainly do need to boost our capacity, and to establish links with the world’s fastest-growing countries and cities.
"But we need to see our government investing at the regional level – as happens so clearly in Germany – and to dilute its obsession with London and its hinterland.”
And Birmingham Chamber of Commerce president Mike Ward said: “We feel that the chancellor should have given clearer indications that the government will back airports like Birmingham Airport, as a solution to delivering the capacity that the UK needs.”
But officials insisted the Chancellor had not ruled out allowing Birmingham Airport to expand.
A Department for Transport source said: “Birmingham could quite easily be part of the solution to this.
“The Secretary of State was at the airport recently to see for herself.
“High Speed Rail will make it easier to get to Birmingham Airport than to Stansted or Gatwick for many travellers in the south east.
“The Chancellor said in his Autumn statement last year that he would be looking at all the options, with the exception of a third runaway at Heathrow.
“Birmingham could very easily form a significant part of the solution, particularly with HS2. The fact that the problem in terms of lack of capacity is in the south east doesn’t mean that the Birmingham is excluded from the solution, not at all.”
John Morris, head of government and industry affairs at Birmingham Airport, said: “We believe there is everything to play for.”
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In other Budget announcements, Mr Osborne said he was speeding up plans for local pay as he delivered a dramatic Budget statement which included tax cuts for workers on low and average incomes.
The income tax threshold is to rise from £7,475 today to £9,205 in 2013 – which means workers om ordinary incomes will take home an extra £346 a year.
But there is bad news for many pensioners, as their tax allowances were frozen. It means thousands of wealthier pensioners will be worse off by hundreds of pounds in real terms.
The change hits pensioners who currently have taxable incomes of £10,500 or more.
Rachel Reeves MP, Labour’s Shadow Chief Secretary to the Treasury, said: “George Osborne has tried to bury his £3 billion ‘Granny Tax’ raid on pensioners over the next four years.
“The freeze in the personal allowance for pensioners will see 4.4 million pensioners who pay income tax losing an average of £83 per year next April. And people turning 65 next year will lose up to £322.”
Mr Osborne also controversially cut the 50p tax rate charged on the richest, who will now pay only 45p on salaries above £150,000. But he insisted a series of other measures, including increasing stamp duty on homes worth more than £2 million, would mean the most wealthy would actually pay more.
He announced the Birmingham is one of ten cities that will receive superfast broadband and wifi, at a cost of £10 million, to become what the Government is calling a “super-connected city”.
There was a boost for Local Enterprise Partnerships, which are set to receive an extra £74 million across the West Midlands region from the Government’s Growing Places Fund.
And businesses will benefit from an additional one per cent reduction in the main rate of corporation tax. The rate will reduce from 26 per cent to 24 per cent in April 2012, then to 23 per cent in April 2013 and to 22 per cent in April 2014.
Birmingham Chamber welcomed the tax cuts. Michael Ward, Birmingham Chamber of Commerce Group’s president, said: “The reduction of the top rate of tax is a bold measure to restore and protect UK plc’s international competitiveness.
“The reduction of Corporate Tax to 24 per cent from next month will provide a shot in the arm for businesses and enable them to accelerate much-needed growth. We are delighted the Chancellor has responded to the Chamber’s calls to reduce it even further to 22 per cent by 2014.”
Liberal Democrats were delighted by the decision to raise the income tax threshold further, arguing that it was evidence of Lib Dem policies being put into practice.
Lorely Burt (Lib Dem Solihull said: “This budget shows the Liberal Democrat commitment to protecting those on low and middle incomes. This is a budget for millions, not millionaires.
“I believe that this package of measures strikes a balance between giving help to low-paid workers, creating a business-friendly environment in the UK whilst at the same time ensuring that the rich pay their fair share.”
But campaigners Friends of the Earth condemned the focus on increasing air capacity, coming on top of plans for new roads.
West Midlands spokesman Chris Crean said: “This Budget sticks two fingers up at David Cameron’s promise to build a clean future – and gives a massive thumbs down to new jobs and cutting our reliance on expensive gas and oil.”
Birmingham Post Budget articles can be found at www.birminghampost.net/budget