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Osborne must 'junk austerity talk'

Chancellor George Osborne must "junk talk of austerity" and press ahead with major infrastructure projects to revive the economy, Boris Johnson has said.

The London Mayor insisted confidence was crucial to the recovery and said hundreds of thousands of homes should be built around the capital.

Speaking at a lunch for business leaders in Davos, Mr Johnson urged his audience to do their bit by investing surplus cash.

Outlining a "manifesto" of steps needed for growth, he said: "This morning's news demonstrates why the Chancellor is pursuing measures now that will boost confidence, further stimulate demand and bring growth, through investment in housing, transport and infrastructure.

"We need to build the hundreds of thousands of homes that the city will need, because a concerted programme of house-building will drive the rest of the economy, with one in four SMEs (small and medium enterprises) in construction and I believe the growth boost would mean we could make that investment without damaging the UK's triple A rating."

Mr Johnson added: "We need to invest in the rail and road infrastructure that will get the workforce of London and the South East to their jobs on time and that is critical to our competitiveness."

The mayor reiterated his opposition to a third runway at Heathrow, insisting there was "extraordinary potential" in expanding Stansted or building a new "Boris Island" airport in the Thames Estuary.

He also repeated demands for politicians to stop "bashing" the City, called for a "sensible visa policy", and said the UK should be offering "low and stable rates of tax".

"Lastly we need to remember confidence, we need to junk talk of austerity and recognise that the single biggest inhibitor of demand is lack of confidence and that if only some of the people in this room would invest some of the cash in their balance sheets we would see that confidence rewarded in a virtuous circle," he went on.

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