The government has unveiled plans for a major £1.1bn investment into London Stansted Airport, which it says will create over 5,000 jobs.

At the International Investment Summit in London on Monday, Prime Minister Keir Starmer welcomed proposals to extend Stansted’s existing terminal building by a third.

Such an expansion will enable the north-east London hub to serve around 43m passengers per year and is expected to double its annual contribution to the UK to £2bn.

Planning permission was secured last October and construction will begin in 2025, with the project expected to take between two to three years to complete.

“We have been steadfast in our commitment to help British businesses grow and in turn boost the UK’s economy. This announcement is a clear signal that Britain is open for business,” Transport Secretary Louise Haigh said.

The investment consists of £600m for the terminal extension and a further £500m to improve the existing terminal and wider airport infrastructure.

That includes the delivery of a 14.3MW solar farm on Stansted’s estate, a key part of its bid to decarbonise.

It comes after the number of flights from Stansted, which is part of the wider Manchester Airports Group (MAG), boomed in 2024 amid resurgent demand for travel. The hub enjoyed its busiest ever summer season between June and August, with a record total of 8.8m passengers passing through.

“By investing more than £1bn in Stansted over the next five years, we will be able to connect people and businesses in London and the east of England to even more global destinations, while welcoming millions more visitors to the UK,” Ken O’Toole, chief executive of MAG, said.

“Aviation is an essential enabler of the success of the UK’s key high-value industries, and we look forward to helping the government achieve the highest sustained growth in the G7 through the sustainable growth of our airports.”

A number of airports across the UK are currently pursuing their own proposals to expand.

Heathrow is mooting whether to pursue its long-delayed plans for a third runway, while Gatwick has already submitted an application to bring its second runway into routine use, for around £2.2bn.

Stansted in particular plays a pivotal role in the UK’s tech ecosystem. The airport sits at the heart of the so-called Golden Triangle to the north of London, a region home to companies including Google, GSK and Microsoft, as well as both Oxford and Cambridge University.

Haigh added: “Transport is central to this Government’s core mission of growing the economy. This is about giving companies like Manchester Airports Group the confidence to invest, boosting regional and national economic growth, and supporting the aviation sector while also meeting our existing environmental obligations,”