Transport Secretary Heidi Alexander has approved plans for a second runway at London Gatwick Airport, as the government looks for economic growth opportunities.

The announcement has been welcomed by many business organisations in the area, including White Label’s social enterprise the Develop Croydon Forum, which supported the most recent plans alongside the airport’s sustainability and community support agendas.

The £2.2bn privately-financed project involves moving the current Northern Runway 12 metres to bring it into regular use, as well as other developments, including extending the size of terminals.

Chancellor Rachel Reeves said the plans would create “thousands of jobs and billions in investment” and added that the second Gatwick runway was part of the government’s plan to “get Britain building again”.

Speaking at the airport, the chancellor said: “This extra runway at Gatwick will mean that people going on holiday will have a greater choice of destinations, it will mean lower costs for a family holiday.

“It will also mean more good jobs paying decent wages through this injection of cash into our economy.”

Gatwick currently handles about 280,000 flights a year. It says the plan would allow that number to rise to around 389,000 by the late 2030s, and is also committed to becoming net zero for its Scope 1 and 2 greenhouse gas emissions by 2030.

Stewart Wingate, VINCI Airports Managing Director for United Kingdom said: “After a lengthy and rigorous planning process, we welcome the Government’s approval of plans to bring our Northern Runway into routine use, ahead of the expected deadline.

“This is another important gateway in the planning process for this £2.2bn investment, which is fully funded by our shareholders and will unlock significant growth, tourism and trade benefits for London Gatwick and the UK and create thousands of jobs.

“As we’ve said previously, it is essential that any planning conditions enable us to realise the full benefits of the project and do not impose unnecessary constraints that make it uneconomic to invest in.

“We now need to carefully examine the details of the planning consent. Once we have done that, we will be able to comment further.”

The Executive Mayor of Croydon Jason Perry, shared on Instagram: “With the Transport Secretary’s approval of London Gatwick’s second runway, thousands of new jobs and millions in investment are now within reach.

“Just 14 minutes from the terminal, Croydon is a key gateway in the Gatwick Airport Economic Zone – powering skills, logistics and growth.

“London Gatwick currently supports 3,680 Croydon jobs and contributes £265m to our economy – a figure set to rise through more skilled jobs, new supply chain opportunities, and greater investment in infrastructure and training.

“We signed an Economic Growth Charter with London Gatwick – accelerating our shared plan for a modern, connected Croydon at the heart of the South East economy. As the region’s powerhouse, we are putting confidence in Croydon.”

London Gatwick, in West Sussex, is Europe’s busiest single-runway airport with more than 40 million passengers using it every year.

The plans approved by Alexander would include adding 40,000 more flights before the second runway opens, and 70,000 more – almost 190 a day – once it is fully up and running.  The airport says that passenger numbers could rise to up to 80 million.

At the moment the Northern Runway is only used for taxiing or as a back-up. The second runway would be used for short-haul flights, with capacity also freed up for more long-haul services from the main runway.

Shadow transport secretary Richard Holden welcomed the decision as “a vital step towards driving economic growth”.

Develop Croydon’s role in supporting the airport was referenced as part of the The Secretary of State’s Conclusions on the Principle of the Proposed Development and the Need Case, which stated: “She also acknowledges the support received for the need for the scheme, particularly from local businesses Gatwick Diamond Business, Develop Croydon Forum and the Sussex and Surrey Chambers of Commerce, which were received following publication of her minded to letter.”