Financial News

  • 2 October 2012, 11:55

Labour Conference: Balls Wants Stamp Duty Cut

Shadow chancellor Ed Balls has called for an expected 4bn windfall from the sale of 4G licences to be used to boost the housing market.

Mr Balls wants the money from the sale next year to be poured into reviving the economy, rather than paying down the deficit.

In a further bid to kickstart the property sector, he also urged the Government to give a temporary stamp duty holiday to first-time buyers.

"In the good times, Labour used every penny of the 22bn from the sale of the 3G licences to pay off national debt. But in difficult times, we urgently need to put something back into the economy," he said.

"So with this one-off windfall from the sale of the 4G spectrum, let's cut through this Government's dither and rhetoric and actually do something. Not more talk, but action right now.

"Let's use 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 ofthousands of jobs and getting our construction industry moving again.

"Add to that a stamp duty holiday for first-time buyers buying homes up to 250,000 and we can deliver real help for people aspiring to get on the property ladder."

Speaking at Labour's party conference in Manchester, Mr Balls revealed that the man behind delivering the London Olympics will help draw up Labour's plans to "rebuild Britain".

Sir John Armitt, the chairman of the Olympic Delivery Authority, will devise plans for an independent commission set up to assess long-term projects such as superfast broadband and airport capacity.

Mr Balls also used his speech to reinforce his message - fiercely opposed by the unions - that Labour cannot commit itself now to reversing the coalition's spending cuts.

"Hard times will last longer than all of us hoped. And we cannot promise to put everything right straight away," he said.

"That is why, 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."

The shadow chancellor's pledges risk being overshadowed by a bruising clash with the unions, who are poised to vote overwhelmingly for a motion opposing public sector pay freezes.

One union leader has said Mr Balls "would give an aspirin a headache", while another said imposing a pay freeze would lose Labour the next election.

Mr Kenny says he has drawn up a dossier of "Balls Ups" he claims were made when Mr Balls was in government, which he plans to read out at a conference fringe meeting.

Len McCluskey, general secretary of Unite, claims Labour would lose the next election if it did not connect with workers, saying that the public sector pay freeze was also starting to have an impact on workers in private firms.

Mr McCluskey was given a standing ovation when he spoke earlier on Monday.

He took a swipe at the party leadership by saying there should be no "false choice" of jobs or wages - constrasting with Mr Balls and Ed Miliband who insist jobs take priority.

"I say to Ed, a public spending squeeze while the City continues to let rip is simply not acceptable. Asking the poorest for further sacrifices for a crisis they did not cause is the road to political ruin and defeat at the next election," he said.

"It is time for Labour to once and for all turn its back on the neo-liberalism of the past. Reject the siren voices from those whose policies and philosophy have been discredited, and embrace the radical alternative the country wants, which is the only way - the only way Labour will return to power."

Elsewhere, business chiefs were dubious about Mr Balls' plans for the 4G windfall.

Graeme Leach, chief economist at the Institute of Directors, said: "The windfall from the 4G auction is a rare bit of good news for the public finances, and any money it raises must be used wisely.

"Ideally, it should be put into the essential process of deficit reduction - or if it's going to be spent, then spend it on the infrastructure which will support economic growth.

"It would be much better for our long term economic prospects to use this to invest in our transport system and digital infrastructure, rather than housebuilding."

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