Oct. 1 (Bloomberg) -- Britain’s opposition Labour Party called on Prime Minister David Cameron to spend as much as 4 billion pounds ($6.5 billion) from the sale of the fourth-generation mobile-phone spectrum to fund housing.
The party’s top Treasury spokesman, Ed Balls, said today the government should build more than 100,000 affordable homes for those on low incomes to help stimulate the U.K. economy, stuck in its first double-dip recession since the 1970s. The money should also be used to pay for a two-year exemption from property-purchase tax for first-time buyers, he said.
“We badly need something to kick-start the recovery,” Balls said in an interview with Bloomberg Television today following his speech to the annual Labour Party Conference in Manchester, northern England. “We should get growth moving and get the deficit down. Our growth has desperately undershot. Now is the time to act.”
Midway through Britain’s five-year electoral cycle, Labour is refraining from promising a looser fiscal policy as it seeks to rebuild its reputation for economic competence. The call from Balls mirrors efforts from the Conservative-Liberal Democrat coalition to seek ways to spur growth without borrowing more money.
In his speech, Balls called for tougher action on banks, reiterating the need for a public inquiry into banking culture following the Libor-fixing scandal. He pledged “radical reform” to split retail and investment banks and said Labour would push for the global adoption of a financial-transactions tax.
Labour leader Ed Miliband said yesterday that if he becomes premier he’ll force through laws to break banks up unless they change their behavior.
Labour has opened a double-digit lead over the Conservatives in some opinion polls, enough to give it an overall majority in 2015 if replicated in that year’s election. A poll by Opinium in yesterday’s Observer newspaper put support for Labour at 39 percent, compared with 29 percent for the Tories and 10 percent for the Liberal Democrats. The polling company questioned 1,969 voters on Sept. 25-28 and didn’t specify a margin of error.
Balls said that Labour’s approach if it wins in May 2015 would be to “do things in a fairer and more balanced way” than the coalition, softening previous rhetoric that called for Osborne to ease off the pace of fiscal consolidation aimed at closing the structural deficit by 2017.
“We cannot make any commitments now that the next Labour government will be able to reverse particular tax rises or spending cuts,” Balls said. “We will not make promises we cannot keep.”
For now, the fiscally neutral house-building plan would create more than 150,000 construction jobs and as many as 600,000 in the supply chain, Labour said, citing research by the National Housing Federation.
The program would cost about 2.5 billion pounds, while funding the two-year stamp-duty holiday would cost about 500 million pounds, Labour said.
Ofcom, the telecommunications regulator, is preparing to start auctioning the necessary spectrum for Vodafone Group Plc and other British phone operators to roll out faster mobile networks from the middle of 2013.
Bidding for frequencies will start early next year and is planned to be completed by March. Mobile broadband based on 4G networks will be extended to at least 98 percent of villages, towns and cities across the U.K.
The auction, delayed several times following threatened legal challenges from the operators, will sell airwaves equivalent to three-quarters of the spectrum currently being used.
“That auction hasn’t happened and therefore we have not put a figure on it,” Cameron’s spokesman, Steve Field, told reporters in London today. “I don’t think it is for me to get involved in a debate that is happening at the Labour Party conference. Clearly the government has been taking action to bring down the cost of home ownership and get people onto the housing ladder.”
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