Osborne sparks angry response with plans to allow building in Green Belt

George Osborne with Andrew Marr yesterday. The BBC show returned for a new series – complete with new scooter for the opening credits (PA)

George Osborne provoked a backlash from environmental groups yesterday by promising to allow more building in the Green Belt as part of a new "go-for-growth" strategy.

As MPs return to Westminster today after their summer break, the Chancellor unveiled measures aimed at jump-starting the economy but at the same time stuck to his deficit-reduction strategy. David Cameron, Nick Clegg and Mr Osborne will make a series of announcements over the next two weeks in what will be seen as yet another relaunch by the Government. The centrepiece will be a plan to guarantee up to £10bn of new housebuilding by housing associations and private developers, and there could be more help for first-time buyers.

The Coalition's most controversial move will be to reignite a row with green campaigners by making a second attempt to streamline planning rules. Mr Osborne said he wanted local authorities to do more "land swaps" under which they can allow building in the Green Belt around towns and cities if an equivalent area of land elsewhere is safeguarded. He added that new roads should be built more quickly than the time it took to fight a world war. The scope and length of appeals against planning decisions is likely to be curbed. But green groups that won concessions over the Government's previous attempt to rewrite planning laws said it had another fight on its hands.

An Infrastructure Bill will be fast-tracked through Parliament by next month, allowing the Treasury to guarantee £40bn of construction projects held up by lack of finance, including the £600m Mersey Gateway bridge.

Mr Osborne announced a Small Business Bank to bring together what he called an "alphabet soup" of government schemes to help small firms. But the move stops short of Liberal Democrat calls for the Treasury to turn the taxpayer-owned Royal Bank of Scotland into a state investment bank to lend direct to companies.

Labour dismissed the Chancellor's package as a rehash of previous announcements and said he was sticking to a failing economic plan.

The Chancellor told the BBC: "I think we can speed up planning. It is absolutely ludicrous that it takes years to get planning decisions. This country cannot afford to wait years for development."