Today we are publishing 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?”
12 June 2015 – TAG give notice of their intention to seek a Judicial Review of the Commission’s work in respect of the following:
1. that potential conflicts of interest had arisen due to Sir Howard’s accepting the Chairmanship of the Royal Bank of Scotland (the banker for companies which own Gatwick and Heathrow airports).
2. that the Commission’s May 2015 consultation on air quality was rushed and insufficiently publicised, so they had not had a fair chance to respond.
22 June 2015 – RBS announces a delay to Sir Howard taking up his new post as Chair of the Bank until after he had completed his work with the Airports Commission.
1 July 2015 – The Airports Commission publishes its final report recommending a new third runway be built at Heathrow Airport.
2 July 2015 – The Airports Commission’s solicitor responds to TAG’s pre-action letter of claim:
• Denying that Sir Howard had a legal interest in RBS while Chair of the Commission stating “No resolutions have yet been passed to put him on the board of RBS or make him chairman. He therefore has no formal employment or other contractual relationship with RBS during his tenure as Chair of the Commission“.
• In responding to TAG’s assertion that Sir Howard’s interest in RBS had not appeared as a Declared Interest on the Airports Commission’s website, the Commission’s lawyers admitted that this was an oversight which had been rectified. Then, in seeming contradiction to its suggestions that Sir Howard had no legal interest in RBS, states “The fact of his future role was widely reported in the press at the time and has thus been in the public domain since then“.
• Furthermore, in seeking to demonstrate that a conflict of interest was not possible, the Airports Commission’s solicitor writes: “A protocol was put in place to ensure that RBS did not share any information relating to its aviation work with Sir Howard at any time during his tenure as Chairman of the Commission“.
10 July 2015 – TAG writes further letter to Airports Commission stating that Sir Howard’s involvement with GIC Limited and Prudential Assurance gives rise to allegations of apparent bias as a fair-minded observer would conclude that there was a real possibility that Sir Howard has been biased. TAG’s letter also highlights that Sir Howard’s Declared Interests makes no mention of his involvement with the two companies – despite this being revised by the Commission in March and then again in June 2015 to include his new post at RBS.
27 July 2015 – Response from Treasury Solicitor which:
• Confirms Sir Howard joined GIC in 2009 and was appointed to its International advisory board in 2011 but claims he resigned in 2012 upon being appointed chairman of the Airports Commission.
• Admits that Sir Howard is a director of Prudential and that M&G is a subsidiary of Prudential. It is admitted that Sir Howard owns shares in Prudential although it is denied that Sir Howard has any remuneration directly from M&G’s investments.
• The Solicitor does not respond to the point that these positions were not listed in Sir Howard’s Declared Interests on the Commission’s website, but instead states that they were in the public domain – via Wikipedia.
The attached letters between TAG, the Department for Transport and the Airports Commission revolve around pre-judicial review action TAG launched on 12 June, questioning Sir Howard’s acceptance of the Chairmanship of the Royal Bank of Scotland, RBS.
Document 1 – 12 June 2015 TAG pre-action protocol letter to Airports Commission and Department for Transport
Document 2 – 2 July 2015 Treasury solicitor’s response to pre-action protocol letter on behalf of the Commission.
Document 3 – 10 July 2015 TAG follow-up letter to Airports Commission
Document 4 – 27 July 2015 Treasury solicitor’s response to TAG’s letter of 10 July 2015
The full press release can be downloaded here.