put demand where it originates, rather than artificially funnel it through one hub
The word "artificial" is an odd choice. Heathrow is a natural hub being the crossroads of the empire and North American routes from the days of BOAC serving a world city. I make the point that there is a very good case IMHO that London not be considered simply as a major English city as it's not that English these days let's be honest. Population and airspace are only part of the issue, a great misunderstanding that London is a major cultural and economic magnet that few cities in the world can compete with.
As far as the South East is concerned, when you say
the next best option is therefore Manchester unless we want to lose traffic to other European airports.
you're right, but London looks outwards not upwards. The attraction to use the existing hub at CDG or AMS would always come to mind before heading up to Manchester. It's a pretty big cultural thing that you're really not going to get past.
Manchester gaining anything from a saturated South East has been the mantra for decades and it still hasn't happenend. When the day comes, the Blue / Yellow / Red politicians of the day will "reluctantly" allow mixed mode at Heathrow before dusting off runway three.
It's like the BBC. Moving to Manchester has great benefits on paper until you compare it to living in London. Finally the reason MAN's grand plan went wrong was that with the resurgence of LPL and LBA, those passengers chose to fly locally rather than be "artificially" funnelled into MAN.
I think it would have been better strategically had they been funnelled towrads a MAN that had been better invested in as I don't believe we need so many regional airports. A few well run larger fields would be way better I think. Glasgow and Edinburgh I'm looking at you.......