Labour’s shadow chancellor will call for 100,000 more affordable homes to be built to kick-start the economy and create hundreds of thousands of jobs as well as a two-year stamp duty holiday for all first time buyers purchasing properties up to £250,000 when he addresses the Labour conference on Monday.
He will say that the plan should be funded using the £3 billion to £4 billion expected to be raised from the forthcoming auction of the 4G mobile phone spectrum.
Using the lower estimate of £3bn would allow 100,000 affordable homes – a mix of shared ownership, affordable rent and social rent – to be built at a cost of £2.5bn and the two-year stamp duty holiday at a cost of around £500m.
He will tell the Labour Party Conference: “We’re just one of two G20 countries in recession – the longest double-dip recession since the Second World War. And because we are in recession, the deficit is now not going down, it’s going up – up by 22% so far this year.
“There is nothing credible about a plan that leads to a double-dip recession, thousands of businesses bust, a million young people out of work, billions wasted on a soaring benefits bill, and borrowing going up not down. Rising borrowing not to invest in the jobs of the future but to pay for the mounting costs of this government’s economic failure.
“Because this is the fundamental truth: if more people are on the dole, not paying taxes, you can’t get the deficit down. If businesses are going bust, not hiring new workers, you can’t get the deficit down. If the economy’s not growing, you can’t get the deficit down.
“And that is why we must act now to kick-start the recovery, tackle the causes of rising borrowing and start to make our economy stronger for the future.”
A year after setting out Labour’s five point plan for jobs and growth – before the economy went into a double-dip recession – he will say: “One year on, the need to kick-start the economy is even more urgent. So we must go further. With 119,000 construction jobs lost in two years and a 68% 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 £4bn from the sale of the 4G mobile phone spectrum. In the good times, Labour used every penny of the £22bn from the sale of the 3G licenses to pay off national debt. But in difficult times, we urgently need to put something back into the economy.
“So with this one-off windfall from the sale of the 4G spectrum, let’s cut through the dither and rhetoric and actually do something. Not more talk, but action right now.
“Let’s commit that money from the 4G sale and build over the next two years: 100,000 new homes – affordable homes to rent and to buy - creating hundreds of thousands of jobs and getting the construction industry moving again
“Add to that a stamp duty holiday for first time buyers, and we can deliver real help for people aspiring to get on the property ladder. A clear and costed plan to kick-start the economy and get people back to work. Building the homes that we need now and for the long-term. A vital step forward in renewing Britain’s long-term infrastructure. Building our way out of recession and re-building Britain for the future.”
He will also warn of the tough choices the next Labour government will have to make and confirm that Labour will hold a zero-based spending review in the first year of government: “After the global financial crash, it was always going to be difficult to get the deficit down. And even if we do get the economy growing again, even if we do reform our banking system for the future, we’re still going to face tough choices in the years ahead.
“But the longer this government staggers on with a failing economic plan, the worse it will get and the harder the job will be. Hard times will last longer than all of us hoped. And we cannot promise to put everything right straight away.
“Of course we’ll make different choices – we’ll do things in a fairer and more balanced way and put jobs and growth first.
“But, however difficult this may be, when we don’t know what we will inherit, we cannot make any commitments now that the next Labour government will be able to reverse particular tax rises or spending cuts. Because, unlike Nick Clegg, we will not make promises we cannot keep.
“And because we all know there can be no post-election spending spree, in our first year in government we will hold a zero-based spending review that will look at every pound spent by government. Carefully looking at what the government can and cannot afford, rooting out waste and boosting productivity, building on the work that Rachel Reeves and Jon Trickett are leading.”