Osborne Says U.K. Must Solve Short-Fall of Airport Capacity

Chancellor of the Exchequer George Osborne said that the U.K. needs to find a solution to the lack of airport capacity in the southeast of the country to maintain its links with emerging economies.

London’s Heathrow airport, Europe’s busiest airport, currently operates at 99 percent capacity. Prime Minister David Cameron scrapped plans for a third runway in May 2010 in favor of developing a high-speed rail link from London to northern England to reduce demand for short-haul flights.

“We cannot cut ourselves off from the fastest growing cities in the world,” Osborne said to lawmakers in London as he presented his annual budget. The Transport Secretary will set out the government’s thoughts on the issue “later this summer,” he said.

Osborne also said that the government was seeking investment from U.K. pension funds in infrastructure. The government is seeking funds to develop roads, railways, clean energy and water, as well as broadband networks he said.

To contact the reporter on this story: Steve Rothwell in London at srothwell@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net