Airports 'could buy noise rights'

Airports should be able to buy the right to expand and emit more noise by paying compensation to local residents, a think-tank has proposed.

The free market Institute of Economic Affairs (IEA) said government involvement in the debate over aviation capacity is both unnecessary and undesirable and so airports need to be given the ability to cut deals with local residents independently.

Rather than getting involved in decisions about where to expand capacity, politicians should give airports a means to reach agreements with residents affected by their decisions.

A compensation mechanism would allow agreements that benefit both airports and those who live in their surrounds, the think-tank said.

In a more radical proposal, the IEA said " tax havens" could be created around airports which pay a large proportion of local levies, allowing residents to pay lower taxes.

The IEA's De-politicising Airport Expansion report comes on the eve of the publication of an interim report from the Government-appointed Airports Commission which will set out a short-list of options for extra runways at UK airports.

There has been speculation that the commission, chaired by Sir Howard Davies, will back a controversial expansion of Heathrow airport in west London.

Mark Littlewood, the IEA's director general, said: "With the private sector raring to invest in airport expansion, it is patently clear that the Government is creating a logjam at the expense of wider economic growth. A market mechanism is urgently needed to create a compensation mechanism for those that would lose out.

"Unless the Government steps back from the capacity debate, the findings of the Davies Commission will be completely futile. We need a radical shift away from politics to ensure that the interests of passengers and the wider UK economy prevail."