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Publish Date : 05-Sep-2012

In a bid to stimulate the economy, the UK government will be underwriting nearly 50 billion pounds of private sector construction projects.

According to the Treasury, the new Infrastructure (Financial Assistance) Bill, which builds on a plan first launched in July, would allow major projects that had stalled due to lack of funds to be underwritten using government guarantees.

Chancellor George Osborne said in order to qualify, the projects would have to be \"nationally significant\", ready to launch construction within 12 months, fiscally credible and \"good value\" for taxpayers, .

The 50bn pound scheme covers plans to underwrite the work to build up to 10bn pounds of new homes, including guaranteeing the debt of housing associations and private sector developers.

Osborne further said the government would also seek to accelerate planning decisions and encourage certain developments on Green Belt land.

He said : \"I think we can speed up planning. It is absolutely ludicrous that it takes years to get planning decisions in this country,\".

He added : \"This country, in the current economic environment, cannot afford to wait years for development\".

The Chancellor has passed the remarks at a time when Prime Minister, David Cameron, said he wanted to \"cut through the dithering\".

Cameron said that the UK has to remember the fundamental truth at the heart of this debate and that is one cannot borrow his way out of a debt crisis.

He said : \"Countries across Europe have found there’s a tipping point where piling on more debt isn’t just counter-productive, it is lethal – because you slam the brakes on growth.\"

He added : \"We are pulling Britain out of that trap. When I became Prime Minister our market interest rates were the same as Spain’s. Ours are now less than 2pc; theirs more than 6pc. Why? Because we threw a lifeline around the British economy and pulled it back from the cliff edge.\"

The UK economy is presently going through recession, with the latest figures showing it dropped 0.5% during the second quarter.

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