Deputy prime minister Nick Clegg has revealed the government is planning a ‘massive’ state-funded housing and infrastructure drive
The Liberal Democrat leader signalled the government was taking a fresh approach on growth and looking to boost capital into the economy.
Under the plans, reported in Financial Times (FT), the government would use its balance sheet to underwrite housing and infrastructure projects.
In an interview with the FT, he said: ‘From the top of government, a few weeks ago we decided this was the route we’re going to take. That’s the instruction we’ve issued to the Treasury.’
He also admitted ‘lurid’ language used to spell out the ‘emergency we were facing’ may have had a ‘dampening effect on mood, which is very important in an economy.’
His remarks came as the International Monetary Fund called on the UK to cut interest rates and commence quantitive easing to increase demand in the economy.
The new focus comes six months after the government signed a memorandum of understanding with UK pension funds to bring £20 billion of new investment into UK infrastructure.