Before the last election, Tony Blair signed a letter to The Times. It was rapturous. It spoke of his belief in the “rich personality and character” of the English countryside. The countryside, he asserted, was close to his heart. He pledged himself to pay “thoughtful and scrupulous attention to its charm”. The letter was a surprise from a politician whose rural recourse was normally to French vineyards and Tuscan olive groves. But it was an election year.

This week came the U-turn. A report commissioned by Gordon Brown as part of his Pre-Budget Report totally disregarded his boss’s Virgilian elegiac. The historic role of the countryside “to feed the nation” was at an end. To Mr Brown its new role is to house the nation. Period.

The countryside matters. It matters more than Treasury borrowing limits or overspending. It matters more than tinkering with the health service and scheming over European voting rights. Such things are made by men and by men can be unmade. The countryside is for ever — or for never. Fields and valleys, woods and hills once lost to building are gone.

The proposals set out by the Treasury pose a greater threat to rural Britain than any act of government since the Second World War. Written by an economist, Kate Barker, they treat the countryside as inert raw material for the building industry. They parrot almost word for word the views of the big private housebuilders and the House Builders Federation (HBF), whose lobbyists have long had Downing Street by the throat. Ms Barker was hired by the Chancellor to “launder” their case. She has done them proud.

I have learnt that in this game there is no virtue in pleading Keats or Ruskin, let alone the glories of English nature. These philistines live in London and holiday abroad. We do better to confront them on their own ground, the concrete acres of the mind colonised by dismal science.

Ms Barker’s central thesis is that Britain's lack of new housebuilding “constrains economic growth”. Her evidence is that Britons pay more for houses than other Europeans, in total £8 billions more. Young couples seeking home-ownership must pay on average £32,000 more than their European counterparts. This is a scandal, suggests the Euro-egalitarian Ms Barker.

The argument is absurd. House price inflation has been government policy for more than a quarter century of mortgage-interest subsidy. The billions spent on housing tax relief could have gone on “economic growth”, but the Treasury decided otherwise. It subsidised a lifestyle choice, that Britons could occupy domestic property at roughly half the density of other Europeans. It encouraged them to use houses as vehicles of personal saving. This inflation has been further reinforced by the Bank of England Monetary Policy Committee, of which Ms Barker is a member, holding interest rates at an all-time low. I repeat, high house prices are public policy.

Anyway, what is wrong? High prices indicate economic success. British growth has far outstripped Europe’s this past decade. Perhaps this is due to house prices. Perhaps it is due to the boom in inward investment attracted by Britain’s lifestyle, conserved countryside and towns, which Ms Barker wants to wreck.

She tells the Chancellor that Britain “needs” to build 2.5 million more houses to satisfy an excess of “demand” over supply. Demand is fixed by so-called new households forming at more than 200,000 a year, a figure meticulously broken down by region. This is daft. People cannot be matched to geographical units in this way. Britain is not a Soviet paradise, where migration, underoccupancy and second homes were banned. Everyone “wants” a better house. The demand for Belgravia mansions and Cotswold manors is infinite. Is she really an economist?

Demand for housing shifts in relation to price. Average English house prices are well above the European norm, but then prices in the North are well below the British norm. Whole neighbourhoods stand empty as a result of previous governments who likewise tried to “build for Britain”, ruining the leisure potential of once lovely counties such as Staffordshire and Durham.

But surely higher property prices should rectify the nation’s wasteful use of its housing stock. More important, there are now signs that high prices in the South East are achieving what decades of regional policy has denied. They are driving employment northwards.

As a report this week from Demos and the Royal Institute of Chartered Surveyors indicates, cities such as Newcastle, Manchester and Leeds are becoming economic magnets. Encouraging economic activity to relocate to the North is a far more efficient use of Britain’s social infrastructure than spreading new settlement across the South. For the Treasury now to reverse this regional drift by unleashing a tide of cheap housing in the “high-demand” South beggars belief. It is not “joined-up”, it is dumb.

Ms Barker bulldozes on. She has been asked to “tackle market failure” and must come up with “tough and credible measures, including intervention, where local authorities are not delivering housing numbers in high-demand areas”. The enemy, of course, is that old bugbear of the HBF, local planning.

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