A £50 billion fund to kick-start the UK economy could be used “in principle” to build a third runway at Heathrow, according to chief secretary to the Treasury Danny Alexander.
His disclosure that the funding could be used for a third runway at Heathrow came as he laid out the details of the Infrastructure (Financial Assistance) Bill in the Commons.
Alexander admitted the government was not imposing a time limit on the fund, which will create 140,000 jobs in the construction industry, leaving the door open for it to be allocated to the third runway at the London hub, the Evening Standard reported
He told MPs the money would not be added to the country’s borrowing figures, adding that companies benefiting from loans will pay a commercial interest rate to offset the risk to the taxpayer.
In a Commons exchange with Alexander, Hayes and Harlington MP John McDonnell said: “Although it may not be listed in the national programme …and it will not be brought forward for the next 12 months, there is no sunset clause to this Bill so this legislation could be used to that effect [Heathrow third runway].”
Alexander replied: “As you said there are no such proposals on the table at the moment but in principle should a major infrastructure scheme in the transport sector come forward, and it is then unable to attract the necessary finance because of conditions in the funding market, then of course in principle that could be eligible.
“But that would be a decision for the government of the day.”
Alexander explained that £10 billion of the funding would be set aside to build 70,000 new homes. The money would also be used to back improvements to waterways, waste schemes and other major building works.
He added: “The actions enabled by this Bill will provide enormous benefits across the UK. This is not just about a near-term boost; the projects that go ahead as a result of the action we are taking will provide major long-term benefits to individuals, firms, households and the whole UK economy.
“The steps we plan to take will help more companies in a wide range of sectors to flourish, not just in the southeast of England but across the whole of the UK, and will help more people access a wider range of opportunities.”