Britain's new Labour government is considering a proposal from Keir Starmer's time in office that would exclude borrowing for building projects from fiscal rules. According to documents revealed by Sky News last week, Labour was planning to allow public corporations to borrow on their own account for infrastructure projects under the former prime minister. That borrowing would be exempt from "arbitrary accounting blocks in our fiscal rules," the documents stated.

The move signals a potential shift in how the government finances major infrastructure investments, bypassing traditional fiscal constraints that limit public sector borrowing. By enabling public corporations to raise funds independently for construction and development, the policy aims to accelerate building projects across the UK without directly impacting the government's headline debt metrics.

This approach reflects Labour's broader strategy to stimulate economic growth through capital investment while maintaining apparent compliance with fiscal discipline. The proposal, originating from Starmer's administration, underscores the party's focus on housing and infrastructure as priority areas. However, critics may question the transparency and long-term fiscal implications of moving borrowing off the government's balance sheet.