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£50bn pledged to finance private sector construction

The Government is to underwrite up to £50bn of private sector building projects, chancellor George Osborne has announced.

The extra finance will help to boost growth in the sector, and new legislation will help to speed up planning decisions, whilst development of Green Belt land is to be encouraged, he added.

Labour said that the Chancellor had “no new ideas” and called for tax breaks to promote growth.

The Infrastructure (Financial Assistance) Bill will go towards £40bn of construction projects, using the Governments low rates to provide the finance. To qualify, projects must be ‘nationally significant’, ready to begin work in 12 months time, financially credible and ‘good value’ for taxpayers.

The Government is also expected to set out plans to underwrite up to £10bn worth of new homes, including guaranteeing the debt of housing associations and private sector developers.

An Economy Bill is expected imminently, which will make it easier for developers to gain planning permission quickly, by reducing the time allowed for appeals.

Osborne told BBC One’s Andrew Marr show: “We have to do more and we have to do it faster. They are difficult times for the British economy, difficult times for the world but our economy is healing, jobs are being created, it is taking time, but there is no easy route to a magical recovery.”

Shadow business secretary Chuka Umunna, told the BBC: “There has been delay and indecision all along the way,” in investment in infrastructure.

Controversially, Osborne also stated that a third runway at Heathrow was an option.

He said that it was just a question of where extra runway capacity, needed in the South East of England, should go: “Heathrow, a new estuary airport, Stansted, Gatwick - people have lots of different options. What I would say is – let’s examine all the options, let's do it now, let's make sure we can create a political consensus.

“I understand all about the local pressures but you have got, as a nation, to be able to overcome those and make a sensible decision about where that extra runway capacity in the south-east should be.”

The Liberal Democrats have rejected any expansion of the airport, and a third runway was ruled out in both Coalition partners’ manifestos.

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