Questions about Davies links

Davies is board member of company that spent £300m on property near Heathrow just before his decision to recommend a third Heathrow runway.

Campaigners against a 3rd Heathrow runway have questioned the independence of the Airports Commission and its chairman, Howard Davies, as news emerges that he is a board member of a company that spent £300m on property near Heathrow just before his decision to recommend a third Heathrow runway.

It has been revealed that he is a board member of Prudential, an insurance group which invested in property near Heathrow, just months before the Commission recommended a 3rd runway.

He chairs its risk committee, which reviews and approves group investment policies as well as advising the board on risks in the company’s “strategic transactions and business plans”.

Prudential has a multimillion-pound portfolio of Heathrow investments through its M&G asset management business, which includes its 2013 purchase of the Hilton hotel at Terminal 5 for £21m and an earlier investment with planning permission for a large hotel close to where the proposed third runway would be built.

In the two months before the Davies commission delivered its final report, Prudential’s property business made further investments in £300m of commercial property around the airport, including cargo depots and a business park a short distance from Terminal 4.

Teddington Action Group has published information which uncovers previously undisclosed relationships between the Airports Commission chair Sir Howard Davies, and companies that stand to gain from an expanded Heathrow: GIC Private Ltd and Prudential Assurance.

The Singapore based company GIC Private Ltd (formerly known as Government of Singapore Investment Corporation) first acquired joint control of BAA plc, owner of Heathrow, in April 2006 by buying a 10% stake. It was reported in 2014 that GIC owned 11.2% of the shares in Heathrow Airport Holdings.

In letters to TAG, a Treasury solicitor has acknowledged that Sir Howard was an advisor to GIC, (Davies’ role included advising them on “new growth opportunities”) but claimed he relinquished this role when taking up the appointment of chairman of the Airports Commission in 2012.

The Commission’s lawyers confirmed to TAG that Sir Howard has been a non-executive director of Prudential Assurance since 2010. It has been reported that Prudential, through its investment subsidiary M&G Real Estates, acquired hotels around Heathrow (Hilton and Shiva Hotels) in 2013.

M&G are reported to have applied for, and been granted, planning consent for the re-development of the Heathrow Summit Centre. In June 2015, it was reported to have restructured its interests to take full ownership of Heathrow Corporate Park.

Sir Howard is waiting to take up the chairmanship of the Royal Bank of Scotland.  RBS is the lead banker for companies that own Gatwick and Heathrow.  The Airports Commission’s first task was to discern whether the south-east needed more airport capacity.

Lawyers for the Commission denied grounds for presumed or apparent bias but admitted Sir Howard’s interest in RBS had not appeared as a Declared Interest on the Airports Commission’s website. Sir Howard also failed to declare his links to GIC Private Ltd and Prudential Assurance.

A spokesperson for TAG said:

 “The Commission’s work has been held up by the Government as a truly independent review of the country’s future aviation strategy. For communities living in the shadow of Heathrow who face even more noise and toxic pollution if Heathrow expands, the revelations that the Chair of the Commission has links to a number of companies who stand to gain from an expanded Heathrow is astonishing. £20million of taxpayer’s money has been spent on the Commission and we now demand answers: what information did Sir Howard declare prior to his appointment and how much did the Government know when they appointed him?”

Zac Goldsmith, the Conservative MP for Richmond Park and London mayor contender, told the Guardian that Davies should never have been made chairman of the commission.

“News that [Davies] has also been earning hundreds of thousands of pounds from a company that has been investing heavily in Heathrow property surely puts an even greater question mark over the validity of the commission’s work,” said Goldsmith.

Internet links

Teddington Action Group

The Guardian article

Prudential Assurance

GIC Private Ltd