- Philip Hammond wants to tear up Britain’s “green belt” land to use for house building.
- The chancellor is being resisted in his plans by Theresa May, who thinks the countryside land should be protected.
- The Institute for Fiscal Studies has called for the chancellor to scrap his deficit reduction target.
LONDON — Philip Hammond wants to tear up Britain’s green belt land for house building in his budget next month, as he looks for cost-free measures to address Britain’s housing crisis.
The chancellor has been pushing for green belt reforms for months inside the Cabinet, the Times reports, which would be made in an effort to tackle low productivity levels and meet national demand for housing.
Theresa May has so far resisted Hammond’s calls for the radical housing and planning policy changes, with a senior cabinet ally of the prime minister telling The Times that it was not on the budget agenda.
Whether more greenbelt land, which is undeveloped and often agricultural land surrounding urban areas, should be used for housebuilding is a contentious issue within the Conservative Party.
Conservative MPs like Hammond believe more building must take place on the greenbelt in order to address the national housing dilemma. However, many Tory MPs represent constituencies where residents live near or next to greenbelt land and don’t want their surroundings to become sites for housebuilding.
Communities Secretary Sajid Javid has previously said that there is a “housing crisis” and that up to 300,000 new homes need to built this year. He told the BBC’s “Andrew Marr Show”: “I’m sure the budget will be covering housing.”
He said the government should consider whether it “can sensibly borrow more to invest in the infrastructure that leads to more housing, take advantage of some of the record low-interest rates that we have.”
It was reported in July that Hammond could make more than £1.5 million in a deal over a possible housing development on green-belt land he owns in Surrey.
Land Registry documents revealed that he had agreed an option with a housebuilder on the land next to his house, which could be worth more than £3 million if there was planning permission for houses. The chancellor would get half that amount.
Stamp out stamp duty
A report published on Monday called for Hammond to scrap stamp duty in order to make it easier for people to move house, and stop people living in homes that are too large for their needs.
The Adam Smith Institute said the tax, which raised £11.7 billion last year, is “the most damaging tax Britain has” and scrapping it should be top of his agenda for the budget. It suggests that the tax should be scrapped, and covered by raising council tax bills on the most expensive houses.
The report shows that it costs British people £12 billion a year, which may mean the economy is losing as much as £10 billion.
The chancellor has also been urged to stop the government’s deficit reduction target and borrow tens of billions in order to allow for public sector pay rises.
The Insitute for Fiscal Studies has published a report in which it says “it looks increasingly unlikely” that the deficit reduction target will be met by its target time of the mid-2020s, and it is “perhaps time to admit” that the policy is “no longer sensible.”
The think tank said any changes to public finance forecasts in order to tackle low productivity levels threaten to make the deficit reduction target impossible to reach even before extra spending.
IFS deputy director Carl Emmerson said: “Public sector workers, the NHS, the prison service, schools and working-age benefit recipients . . . would like more money. Given all the pressures and uncertainties, and the policy action that these might require, it is perhaps time to admit that a firm commitment to running a budget surplus from the mid-2020s onwards is no longer sensible.”
Labour’s shadow chancellor John McDonnell said: “Instead of dragging millions of ordinary people through the endless misery of spending cuts, the chancellor now needs to make a decisive break with past Tory failure and end austerity.”
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.