BREXIT: 'economic case' for Heathrow expansion strengthened by vote, says Davies

This is part of Out-Law's series of news and insights from Pinsent Masons experts on the impact of the UK's EU referendum. Watch our video on the issues facing businesses and sign up to receive our 'What next?' checklist.

Writing in the Financial Times, Airports Commission chair Sir Howard Davies said that expanding the London airport in line with the recommendations of his report would "help to offset" the early signs of slowing inward investment since the results of the vote. Stronger air links via Heathrow would also be "essential" if the UK was to be able to focus more attention on "fast-growing non-EU markets in the Far East and elsewhere", he said.

"The business case for Heathrow expansion remains strong," he said, in his article for the newspaper.

"Heathrow benefits from the network effects that come from a huge spread of long and short-haul routes, built up over half a century, which help to incubate new routes and make them viable. That cannot be quickly replicated elsewhere. More broadly, the country needs some forward-looking decisions to create a sense of momentum, and the construction industry – whose stocks have suffered badly since the referendum – will soon need the work," he wrote.

Davies' article was published the day after transport secretary Patrick McLoughlin told the House of Commons that the decision on whether to build a new runway at Heathrow would be taken by the next prime minister once David Cameron stands down this autumn.

"Clearly, any announcement on airport capacity would have to be made when [parliament] was in session," he said. "Being realistic, given recent events, I cannot now foresee that there will be an announcement until at least October."

The Airports Commission made its recommendations to the government in June 2015. It backed the construction of a third runway at Heathrow as the best way to resolve the UK's growing need for greater air capacity, subject to certain concessions to address the airport's impact on the environment and the local community. Proposals to instead build a new runway at Gatwick Airport or extend the existing northern runway at Heathrow were also included in the report as "credible" alternatives.

In a statement issued last week, Heathrow Airport chief executive John Holland-Kaye called on the government to back the third runway as part of its plans for leaving the European Union.

"Government can send the strongest possible signal that Britain is open for business and confident in its future by expanding Heathrow," he said.

"It will allow British exporters to trade with all the growing markets of the world, strengthening Britain's position as one of the great trading nations. And at a time of uncertainty a £16 billion privately funded infrastructure investment will create jobs and growth across the UK," he said.

Speaking after the referendum result, infrastructure law expert Richard Laudy of Pinsent Masons, the law firm behind Out-Law.com, warned that the resulting economic uncertainty would have "profound and far-reaching" consequences for infrastructure investment.

"The underlying drivers to infrastructure growth will remain in the UK and won't go away – our infrastructure is and will remain poor until something is done about it and our population is increasing and urbanising," he said.

"But with sterling devaluing and the economy predicted to shrink, the pressure on the government to fund development will be even further stretched. Inevitably some projects will be cancelled or at least delayed," he said.