Labour Pushes for Phone Windfall to Be Spent on Housing
Shadow chancellor Ed Balls is expected to unveil a suggestion on Monday (1 October 2012) in regards to the use of the proceeds generated from the future sale of the new fourth-generation (4G) mobile broadband spectrum to the UK’s network operators. Balls will use his speech at the Labour’s annual conference in Manchester to call for the £3 billion windfall to be used for the construction of 100,000 affordable homes across the UK, rather than for reducing the country’s debt. In order to revive the housing sector and set the economy rolling, the shadow chancellor will also urge the government to use the funds from the licence auction to provide a two-year stamp duty holiday for all first-time buyers of properties worth up to £250,000.
!m(/uploads/story/492/thumbs/pic1_inline.png)The 4G auction is set to take place at the start of next year to give mobile carriers the opportunity to acquire the additional spectrum required to support the rollout of superfast 4G mobile broadband networks. According to BBC News, citing social enterprise charity the National Endowment for Science, Technology and the Arts (NESTA), the license auction could raise between £3 billion and £4 billion. Balls’s proposal is based on the lower estimated windfall of £3 billion, where £2.5 billion is set to go towards the house building programme with two-year stamp duty holiday estimated to cost £500 million.
The sale of the third-generation (3G) spectrum in 2003 led to a £22.5 billion windfall, which the previous Labour government used exclusively to reduce the national debt. The party’s recent call to plump for a house building programme instead of paying down the debt reflects the Labour conference theme that the country is gripped by an economic emergency and that all short-term government energy must be focused on raising demand and boosting confidence. With his plans Balls also targets the country’s construction sector which has shrunk significantly during the last few years.
“With 119,000 construction jobs lost in two years and a 68 per cent fall in the number of affordable homes being built, we need bold and urgent action now. The government is anticipating a windfall of up to £4 billion from the sale of the 4G mobile–phone spectrum. In the good times, Labour used every penny of the £22 billion from the sale of the 3G licences to pay off the national debt. But in difficult times, we urgently need to put something back into the economy,” Balls will tell the party’s conference, according to extracts from his speech released in advance by his office.
Balls’s idea was welcomed by the construction industry and housing charities, which have expressed their confidence that the investment would break down some of the barriers to home ownership. Yet Conservative party Chairman, Grant Shapps said: “Labour isn’t learning. At the Labour party conference it’s more of the same. They think you can solve anything with spending money.”
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