George Osborne announced in his Autumn Statement a series of transport improvements in the West Midlands as he attempted to back industry and pump money into the private sector.

Alongside a range of gloomy economic forecasts, the Chancellor set out proposals to support businesses by providing work for developers and the construction industry in the short term and improving the infrastructure used by industry, particularly the transport network, in the longer term.

Mr Osborne is depending on the private sector to create jobs to replace the 701,000 public sector posts set to be lost by 2017.

The Office for Budget Responsibility, an independent watchdog within the Treasury, predicts that 1.7 million private sector jobs will be created in the same period, giving a net total of one million new jobs.

Up to £20 billion is to be invested in UK infrastructure by pension funds, following negotiations with the Government.

And the Treasury is directly investing more than £1 billion on road projects, including a new managed motorway scheme on the M6 between Birmingham and Manchester, allowing motorists to use the hard shoulder.

Business leaders have been pushing for improvements to the M6 for years, but proposals suffered a series of delays as various schemes were considered and then rejected.

The £1 billion will also pay for improvements to the M1-M6 junction, east of Rugby, and the Tollbar End roundabout south of Coventry, the junction of the A45 and A46.

Other infrastructure measures included replacing the bridge on the A45 over the West Coast Main Line, close to Birmingham Airport, and rebuilding Evesham’s Abbey Bridge and viaduct.

Mr Osborne highlighted Government support for a scheme to divert the A45 Coventry Road near Birmingham Airport, allowing a planned runway extension to go ahead, although this was a reference to a £15.7 million grant announced in April rather than new money.

Responding to the package of announcements, Solihull MP Lorely Burt (Lib Dem Solihull) said: “This is very welcome news. With investment in High Speed Rail and now an extended runway at our airport, the West Midlands has strengthened its reputation as a fantastic place to do business.”

Ministers are also considering allowing future city mayors to borrow money against future receipts from the Community Infrastructure Levy, which is a fee paid by developers to local authorities to help pay for infrastructure such as road schemes, flood defences, schools, hospitals, Mr Osborne said. In practice, this will allow the infrastructure to be built more quickly.

Other measures included a major tax break for businesses in the Black Country, with the announcement that firms in the Black Country Enterprise Zone will be able to claim Capital Allowances of 100 per cent. The allowance allows businesses to offset the cost of tools and equipment against profits, reducing their taxable profits.

However, concerns were raised by Birmingham MP Richard Burden (Lab Northfield), who asked the Chancellor: “How will he ensure that this will lead to an increase in investment rather than displacement investment?”

An extra £1 billion was pumped into the Regional Growth Fund, which provides grants to firms.

A range of West Midlands businesses such as Jaguar Land Rover have received a share of the £1.4 billion previously allocated.

A new national loan guarantee scheme will make it easier, the Government argues, for smaller firms to obtain bank loans. The Government will guarantee loans, up to a total of £20 billion.

Mr Osborne also announced another £600 million to fund 100 new “free schools”, and £600 million for local authorities to provide new school places.

He also confirmed plans to help first time home buyers obtain mortgages.