Skipness, its not simplistic to me, the reason the pax/airlines stay at LHR is because it has no proper competition
The proper competition is Amsterdam with the KLM hub, Frankfurt with the Lufthansa / STAR hub and Paris CDG with the Air France hub. In London, Heathrow competes with Gatwick, London City, Stansted and Luton for business, the market has seen to it that each has it's own area of success.
So there is shed-loads of competition there, I fail to see what your point is. What competition is lacking and how do you intend to make it happen? With four major competing airports your solution is a fifth at Northolt to fragment things further?