Funds from the sale of 4G mobile spectrum should be used to build affordable homes and provide help for first-time house buyers, the Labour Party will state today.

Shadow chancellor Ed Balls will say at the party's conference that the £3-4 billion expected to come out of the auction should be used to build 100,000 new low-cost homes and provide a two-year stamp duty holiday for all first-time buyers of properties worth up to £250,000.

“In the good times, Labour used every penny of the £22 billion 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 will say.

“So with this one-off windfall from the sale of the 4G spectrum, let's cut through the dither and rhetoric and actually do something.”

With 119,000 construction jobs lost in two years and a 68% fall in the number of affordable homes being built, Balls will call for “bold and urgent action,” claiming that the new strategy would create “hundreds of thousands of jobs” and get the construction industry back on track.

“Add to that a stamp duty holiday for first-time buyers, and we can deliver real help for people aspiring to get on the property ladder,” he will say.

Balls will insist that the plan is “clear and costed”, pre-empting critics who have previously accused him of promoting a strategy that would plunge Britain further into debt.

Earlier this year, Labour's shadow minister for media Helen Goodman slammed the government's handling of the 4G spectrum auction, claiming that repeated delays are costing the taxpayer hundreds of millions of pounds in lost revenue each year.

According to Goodman, the Labour Party had the auction ready to go in 2010, but the Coalition government decided it was not able to support Ofcom's sale of 4G spectrum in the 800MHz and 2.6GHz bands at that time.

“At a time of deep cuts to the public sector the government is in effect losing almost £1 million of revenue a day,” she said.

The 4G auction was originally supposed to take place in 2008, but a legal challenge by T-Mobile and O2, demanding clarification of any refarming of the 2G bandwidth for 3G use, delayed the process.

The auction has since been repeatedly set back, as Ofcom tries to devise a strategy for distributing spectrum without giving any network operator an unfair advantage.

The auction is currently scheduled to take place in the fourth quarter of 2012.