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Ed Balls: £6bn should be spent on housebuilding

Labour leader candidate Ed Balls has said that £6 billion of public finances should be used to build 100,000 homes and boost the construction industry.

At his first campaign appearance later today Mr Balls is due to say that government borrowing is lower than forecast, creating a £12 billion windfall in cash.

Mr Balls argues that half of this should be used to build new homes and create 750,000 construction jobs, rather than to pay down the deficit more quickly.

Recent Treasury figures showed that Britain borrowed £155bn in 2009-10, which is £12bn less than was forecast by former chancellor Alistair Darling in March.

On the LabourList website Balls said: “The public finances are around £12bn healthier than forecast at the time of the budget. The coalition government wants to use the extra money to pay down the deficit faster.

“I think that at a time when the economy is still so fragile and other countries are already tipping back into recession, we should instead use that money to boost construction jobs and build new homes. By using half of that £12bn, a £6bn investment this year and next, we could build 100,000 extra affordable homes which it’s been estimated would create up to 750,000 new jobs, directly in the construction industry and indirectly in the supply chain including thousands of apprenticeships for young people.”

However, Balls is facing tough competition from other Labour leader candidates including David and Ed Miliband, and told the Financial Times in an interview published today that he may not get the job saying “I don’t know if there will be enough time for me in this contest.”