Labour pushes for spectrum cash to be spent on housing

With up to £4bn expected to be made from the 4G spectrum auction, The Labour Party calls on government to spend the money on building affordable housing

The Labour Party is to call on the government to spend the funds it raises from auctioning off 4G spectrum on building affordable housing.

The opposition will kick off its annual conference with the proposal later today, when shadow chancellor Ed Balls gives his opening speech to the party.

The spectrum auction is due to begin in December, following numerous delays as mobile operators have debated the process and threatened legal action against the government and Ofcom.

The purpose is to allocate 800MHz spectrum freed up from the digital television switchover and the 2.6GHz spectrum band for operators to use for 4G services.

It is not known exactly how much the government will make from the auction, but analysts have claimed the sell-off could make up to £4bn for the public sector.

The coalition has yet to say what it plans to do with the money, but Balls believes it should be used to build 100,000 affordable homes – which he also claims will create up to 600,000 jobs – and to give a two-year holiday from stamp duty. These two policies would cost £2.5bn and £500m to fund respectively, according to the cabinet member.

“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,” read an excerpt from his upcoming speech. “We need bold and urgent action.”

Although the auction has been set to start by the end of the year and complete by March 2013, further delays are hanging over Ofcom. 

Last month the regulator granted EE – the operator formed from the merger of T-Mobile and Orange – permission to repurpose its 1,800MHz spectrum to use it for 4G services before other operators had the available frequencies to do the same.

As a result, rival operators are up in arms and a lot of discussions are happening behind closed doors that could cause more issues and indeed more threats of legal action if the rules of the 4G auction don't fall in their favour.

Image: iStockphoto/Thinkstock

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