The IPPR Commission on Economic Justice has recently released a discussion paper, The Invisible Land, examining the hidden force driving the UK’s unequal economy and broken housing market.
The discussion paper concludes:
The reform of the dysfunctional land market is essential if the UK is to be a more equal, more productive and stable economy. It is also vital to creating a better-functioning housing market that delivers the affordable and quality homes the country needs.
Land is an essential factor in all economic activity but, if it is not properly managed and regulated, it can play a destabilising role in the housing market and the wider economy. The UK’s dysfunctional land market and soaring land values have helped drive growing wealth inequality, create the conditions for a broken housing market, and are a root cause of an unproductive and unstable economy. Reform of the land market must therefore be focused on reducing the financial speculation that occurs in land and sharing the benefits of increases in land values for the benefit of the public good.
This conclusion is based on five key propositions.
- The broken land market has a key role in driving wealth inequality in the UK.
- The broken land market is the driving force behind our broken housing market.
- The broken land market has played a key role in the financialisation of the UK economy and is a cause of the UK’s poor productivity.
- The broken land market and high house prices are feeding macroeconomic instability.
- The UK’s systems for regulating and taxing land do not seek to target or fail to adequately capture the ‘economic rents’ that arise from land.
The IPPR Commission on Economic Justice was launched in November 2016 by a London-based progressive policy think tank, the Institute for Public Policy Research, to rethink economic policy for post-Brexit Britain. The commission brings together leading figures from across society – from business and trade unions, civil society organisations and academia – to examine the challenges facing the UK economy and make recommendations for reform.
The invisible land: the hidden force driving the UK’s unequal economy and broken housing market
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