Balls tells Osborne to 'shoot my fox' on 4G stamp duty plan

Ed Balls

The shadow chancellor set out his £3bn house-building plan, then offered the policy to the government to enact

LAST UPDATED AT 14:00 ON Mon 1 Oct 2012

SHADOW chancellor Ed Balls has told the Labour conference his plan to stimulate the moribund construction industry by spending the windfall expected from the auction of the 4G mobile phone spectrum on a two-year stamp duty holiday and the building of 100,000 affordable homes.

Balls, whose speech was well-received by the party faithful in Manchester, then went on Sky News to offer up his policy as a gift to his opposite number. "I want George Osborne to shoot my fox, I want him to steal my thunder. George Osborne can take this plan and do it in a week’s time, or a month’s time. That would be fabulous.”

Balls earlier told delegates: "Let’s cut through the dither and rhetoric and actually do something. Not more talk, but action right now." Around £500 million of the windfall, which is likely to be £3 billion, will go on the two-year tax exemption for first-time buyers of homes worth less than £250,000.

The "politically bold" plan threatens to open Labour up to Conservative claims that they haven't learnt the lessons of their previous time in office, and are still minded to spend money that the country can ill afford rather than using it to alleviate the nation's economic woes.

"Balls is all over the place. This is a feeble attempt to regain lost economic credibility with vague promises of a spending review after the election, then an unfunded stamp-duty cut, and now more spending," a Treasury source told the Daily Mail. "It is total incoherence.’

Conservative party chairman Grant Shapps claimed that the proposal showed that the opposition had yet to absorb the new fiscal realities facing the country, telling Metro: "Labour isn’t learning. At the Labour party conference it’s more of the same. They think you can solve anything with spending money."

The Daily Telegraph was lukewarm about the idea, noting in a leading article: "Mr Balls proposes a stamp duty holiday of two years for first-time buyers of homes costing up to £250,000. Alistair Darling tried this in 2010, and while the policy is certainly popular, it is hardly a remedy for our economic problems."

The proposal received a much warmer welcome from John Cridland, the director-general of the CBI, who said: "What stood out of Ed Balls' speech for me was the emphasis on new housing. The CBI welcomes more action on housing investment, which would give a much-needed boost to growth."

But Matthew Turner, director of buying agents, Astute Property Search, welcomed the plans, saying that "there's no doubt that a two-year stamp duty holiday for first-time buyers would boost the property and broader construction markets".

However he cautioned that "the problem is that this is a promise based on a premise - that Balls ever gets back into power."

The move was welcomed by construction industry groups and housing charities, who said "it would break down the barriers to home ownership".

While Chancellor George Osborne has yet to indicate where any money from the 4G auction, which is likely to take place on his watch next year, will be spent, historical precedence for such unexpected bonuses has been to use them to pay down the national debt, as Gordon Brown did in 2001 with the £22bn proceeds of the 3G auction.

However, most of the proceeds of North Sea oil and gas, which came on stream during the 1970s, were spent on tax cuts in the early 1980s. · 

Disqus - noscript

Unbelievable - this man yet again spending future money the country doesnt have...whilst simultaneously halting FTB's in their tracks in anticipation of an SD holiday.

At least Balls' mentor made a good decision when using the £22bn from the 3G auction in 2000 to pay down national debt (c.8% of total debt at the time) - shame the £4bn for 4G will be a mere 0.4% of current national debt,

For further concise, balanced comment and analysis on the week's news, try The Week magazine. Subscribe today and get 6 issues completely free.