This is part of a series of articles in the run-up to tomorrow’s Budget.
Today, Britain confronts the most profound set of challenges it has faced in generations. While much of government, its officials and political debates are absorbed in an all-encompassing battle over the question of how we leave the EU, many people are encountering falling living standards, growing indebtedness and increasing inequality.
If this is the final Budget before we fully know the terms upon which we will leave the EU, then it is a last chance to address the urgent challenges Britain faces before we plunge into Brexit.
For most people, notwithstanding continued growth forecasts, Britain’s economy does not feel like a success story. Beyond the wealthier neighbourhoods of London and the commuter villages and towns of England’s southeast, economics feels like something that is done to people and not for or, less still, with them. This, along with the fundamentals of an economy that has delivered such deep inequality and stagnation for most, and that continues to contribute to and not alleviate the climate crisis, must change.
British governments have faced great wealth disparity and profound investment challenges before. In 1909, chancellor David Lloyd George proposed a “People’s Budget” “to remove the national degradation of slums and widespread poverty and destitution in a land glittering with wealth”.
His Budget proposed significant income tax rises for high earners and a land value tax to redistribute unearned wealth. We now need a People’s Budget for the 21st century, which recognises that our land is once again “glittering with wealth” (at least until it is stashed offshore or invested in London property) and aims for radical redistribution.
The Budget of 2017 is no less significant than Lloyd George’s of 1909. And the measures it should pursue should be no less momentous. In seeking to tackle economic malaise and post-Brexit threat, Philip Hammond would do well to draw on his predecessor’s ambition.
The New Economics Foundation proposes that the single biggest thing the chancellor could do to demonstrate that he is serious about driving change is to create a People’s Land Bank, shaped by the real needs of those people and communities at the sharp end of the housing crisis.
Instead of selling off public land – where only one in five homes built are affordable – public bodies would transfer this land to kick-start a People’s Land Bank. The bank could immediately support the building of 320,000 genuinely affordable homes.
The bank would then be expanded by giving councils new powers to buy land at its “use value”, for communities to use. All land in the bank would be leased out to communities to build the homes they need at prices that are affordable for their local area. And it would be supported through other measures to tackle the housing crisis, including an annual £10bn community housing fund.
This, in combination with a wider set of policies to deliver more affordable and environmentally sound housing, would be the foundation stone of a People’s Budget for the 21st century.
The People’s Land Bank is a policy big and ambitious enough to begin the work of confronting the economic malaise we face. By taking that malaise seriously, and by empowering people and communities to take control of their future, it would signal a viable way forward at a difficult time for this country.
Andrew Pendleton is director of policy and advocacy at the New Economics Foundation. Read NEF’s pre-Budget briefing.