Chancellor Philip Hammond will prioritise homes and transport over the country’s budget deficit, as part of new fiscal measures that aim to boost jobs and infrastructure.
Speaking to BBC Radio Four’s Today programme this morning, Mr Hammond, who was appointed by Mrs May to replace Mr Osborne as Chancellor, explained that the government is to borrow £2bn to support the “Accelerated Construction” scheme, which aims to get houses built on publicly-owned “brownfield” land, available for swift development.
It is hoped that the scheme will encourage new developers to build 15,000 of the 40,000 new homes that Mr Hammond and Communities Secretary Sajid Javid plan to have built by 2020.
The other 25,000 new homes will be generated by a £3bn Home Building Fund, which will provide loans to stimulate housing projects.
These first 40,000 homes will feed into a long term goal to build over 200,000 new houses.
Mr Hammond’s plans are a sharp departure from Mr Osborne’s aim to reduce the country’s budget deficit by 2020, but Hammond told the BBC that the Brexit vote had caused uncertainty and that the “pragmatic” response now was to support growth.
Mr Hammond’s interview with the BBC precedes his speech at the Tory Party conference later today, where he will say that Mr Osborne's deficit reduction policies "were the right ones for that time", adding: "But when times change, we must change with them."
Mr Hammond will say the government will still "restore fiscal discipline" but in a "pragmatic way that reflects the new circumstances we face".
He promises further details in November's Autumn Statement.