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Housing minister Caroline Flint confirmed that public money could be used to buy up cheap land during the housing slump at a Labour conference dominated by the market turmoil.

The announcement was made at a fringe meeting shortly before Gordon Brown鈥檚 Tuesday speech. In it the prime minister said turbulence in the financial markets was the biggest change to hit the country 鈥渟ince the industrial revolution鈥�.

Brown said he and chancellor Alistair Darling would work with the US government and banking chiefs to improve transparency in the financial system.

He also offered a 鈥渘ew settlement鈥� for those suffering the effects of the crisis, and promised that public spending on schools, the Sure Start initiative for young children, transport and hospitals would continue despite the 鈥渢ough choices鈥� posed by the credit crunch and the downturn in the British economy.

One immediate casualty was the Olympic Delivery Authority, which said private funding for the 拢1.2bn athletes鈥� village had been pushed further out of reach.

In a fringe session on Monday, Flint, said the communities department was working up plans to use public money to buy land to help builders respond quickly once the downturn is over. 

The idea, which was reported by 好色先生TV in July, is designed to take advantage of the slump in residential land values in the downturn. According to estate agent Savills, land prices have fallen by up to 40% in some areas. 

We are worried about land being hoarded and not developed

Caroline Flint

Flint said: 鈥淭he issue of land is one I intend to explore more this autumn. We are worried about land being hoarded and not developed, but we are also seeing whether we should look at [government] land purchases to be ready for the point at which the market picks up again.鈥� 

In her main speech on Tuesday, Flint said she wouldn鈥檛 鈥済ive up鈥� on the government target of 3 million new homes by 2020.

But Imtiaz Farookhi, the chief executive of the NHBC, said it was unlikely that the housebuilding sector would be able to expand development quickly once the financial system is untangled and credit becomes available again. If the target is to be met, the industry will have to build about 240,000 homes a year by 2016. 

Farookhi said: 鈥淲e produced about 190,000 last year, but this year it is optimistic to think we will reach 120,000. When the downturn ends, the industry鈥檚 ability to grow at more than 5-7% a year will be very limited.鈥�

At the fringe, lobbyists for the nuclear industry argued that salaries in the industry should be increased to attract science and engineering graduates who would otherwise be lured to the City.

Lord O鈥橬eill, the chairman of the Nuclear Industry Association, told a fringe event that the financial markets鈥� implosion could be used to attract graduates to the sector, which was 鈥渙ne of the better paid opportunities in the industry鈥�.

Bill Hamilton, of the Nuclear Decommissioning Authority, said the body would launch a strategy next month to address labour shortage in the sector.