Stephen Crabb pledges £100bn infrastructure fund to invest in schools and housing

'Spending government money on infrastructure has never been more affordable,' Crabb said

Crabb, 43, is the youngest contenders of five candidates currently in the race to succeed to David Cameron (Getty Images)

Stephen Crabb, a candidate in the Conservative leadership race, has pledged to create a £100 billion Growing Britain Fund for infrastructure projects including social housing and school buildings if he becomes the next Prime Minister.

Crabb, the current secretary for work and pensions, said that funding would come from issuing new government bonds after bond yields fell to a record low and brought down borrowing costs following Britain’s vote to leave the EU.

“The cost of borrowing is incredibly low. Spending government money on infrastructure has therefore never been more affordable,” Crabb said.

Crabb announced plans for the fund alongside Business Secretary Sajid Javid, who is to be appointed chancellor if Crabb wins the conservative leadership contest.

The pair has promised to issue £20 billion of long-dated gilts each year for the next five years to finance infrastructure projects such as flood defences.

Money would also be invested in social housing, school building, new prisons, energy efficiency. It could also benefit bigger projects such as the Crossrail two, a proposed rail route in South East England.

Javid insisted the new fund will create hundreds of thousands of jobs.

“Our Growing Britain Fund will get Britain building, create jobs and economic growth. It is right that we focus on our exit negotiations, but we must also think about the steps we should take to take advantage of the opportunities that Brexit can bring,” he said.

“My team has a plan and is ready to take the strategic decisions needed to provide confidence in the UK now and in the years to come,” he said.

Crabb, 43, is the youngest contenders of five candidates - Theresa May, Michael Gove, Andrea Leadsom and Liam Fox - currently in the race to succeed to David Cameron after he decided to step down as Prime Minister in the wake of UK’s vote to leave the EU.

Theresa May is the favourite among Tory voters with 60 per cent saying they would choose her to be the next Prime Minister, according to an ICM poll for the Sun on Sunday.

Michael Gove came second with 10 per cent, while Andrea Leadsom was in third on six per cent.

In an interview with the Evening Standard, Crabb said his policies would include a strong social and economic programme for disadvantaged communities to tackle underlying poverty.

“We’ve got to show the Conservative Party is a party of the ladder, helping people to make progress in their lives.”

The five candidates will take part in a series of ballots beginning on Tuesday.