In a speech on the economy ahead of the Government unveiling its spending plans later this month he demanded a targeted programme to build 400,000 much-needed new homes and create 600,000 new construction jobs.

Balls said he supported calls from the International Monetary Fund last month for the government to drive the economy with an infrastructure spending boost.

But Balls wants to see a short-term rise in borrowing for extra capital spending targeted at house building.

“With thousands of construction workers out of work and interest rates at record lows, there is a growing consensus that investing now in improving our infrastructure, particularly housing, would give an immediate boost to the economy, encourage more private sector investment, and give us a long-term return as we strengthen our economy for the future.

“If the entire infrastructure boost recommended by the IMF was spent on housing over the next two years, we calculate that it would allow the building of around 400,000 affordable homes across the country, and support over 600,000 new jobs in construction, including 10,000 apprenticeships.”

He said this would also support small businesses, help people aspiring to buy their own home, reduce waiting lists, and easing upward pressure on rents and housing benefit bills.

“So to the Treasury and the Chief Secretary I say this: there is no point in vague promises about more capital spending in 2017 or 2020.

“We need action now. To secure the recovery and get tax revenues coming in, we need that capital spending boost brought forward – and invested this year and next year.”