Labour has pledged an extra £3bn to build 100,000 affordable homes from the sale of the 4G mobile phone spectrum.

Shadow chancellor Ed Balls has announced the homes would be built as an alternative to reducing debt, should Labour win the next election.

He said it was time to "cut through the dither and rhetoric and actually do something" and to "get out construction industry moving again."

The 4G sale is due to take place next year and the shadow chancellor’s decision to make this statement reflects a growing belief George Osborne is losing a grip on the country’s deficit problems.

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The Labour conference rhetoric is focussing on the idea that the country is gripped by an economic emergency.

Balls’s decision shows a desire to stimulate the economy, rather than contribute to cutting the deficit.

Labour’s estimations are that that the sale would raise £3bn, £2.5bn of which could then be spent on 100,000 affordable homes.

The remaining £500m would then be spent on a two-year stamp duty holiday for first-time buyers on properties worth up to £250,000.

Balls claims 119,000 construction jobs have been lost in two years, and says there has been a 68% fall in the number of affordable homes being built.

Tory MP Margot James said the money should be spent tackling the deficit.

She told the BBC’s Today programme: "We’ve already got plans to relax the planning laws, and free up government land and incentivise business, the developers, to build on the land that they’ve already got permission for."

"I would use some of that money to pay down the debt, rather than start thinking of ways of spending it, but that’s unfortunately Labour’s default position."

(IT/GK)