Neville Chamberlain is the prime minister no other prime minister wants to be seen with. Don’t compare me to him. Anyone but Chamberlain. That is the little prayer that our leaders whisper to the gods of history. Munich. Hitler. Piece of paper. Peace for our time. Appeasement. The swallowing of Czechoslovakia. The invasion of Poland. The fall of Norway. Ousted. Some revisionists argue that he has been misunderstood, but nothing is going to change the role that he plays in the story that Britain tells about its past. The wing-collared, homburg-hatted and mustachioed man with the brolly is ever condemned to be the grey calamity who was mercifully followed by the vivid glories of Winston Churchill.

The interesting question for today is how such a failure became prime minister in the first place. The answer is that he was once a success. He rose to the top on the back of a great reputation as a Tory social reformer. One thing he was particularly good at was housing. Planning for housing. Improving housing. Promoting social housing. Stimulating housebuilding by the private sector. He made his national name in the 1920s as health minister, a position he used to revolutionise planning, expand provision for the poor and get more homes built. His preoccupation with bricks and mortar began as mayor of Birmingham and continued when he was chancellor. The number of houses built during his time at the Treasury rose dramatically. Many of them are the 1930s semi-detached homes that still put a roof over the head of hundreds of thousands of people, particularly around London and southern England.

I commend that successful Chamberlain to Theresa May and Philip Hammond. As they wrangle with each other and cabinet colleagues about what to do with next month’s budget, the prime minister and chancellor should emulate what the Tory with the brolly did about housing.

Everyone agrees that we have a crisis and I suppose this is some sort of progress for those of us who have been banging on about this subject for years. The lack of affordable housing holds back the economy. It makes a lot of people extremely miserable. It corrodes society by setting generations against each other and widening the gap between those who inherit wealth and those who don’t. Most brutally, it divides us between those who have somewhere to live and those who don’t. The problem is so acute that Sajid Javid, the communities secretary, gives interviews in which he makes unprompted references to the “housing crisis”. That is unusual. Ministers are usually loathe to associate the word “crisis” with their own portfolio; the man responsible for housing goes out of his way to say that the situation is critical.

Philip Hammond has an opportunity to do something big in the budget. He ought to take it, because his room for manoeuvre in other respects is totally cramped. A lot of his colleagues are clamouring for the head of the chancellor they disparage as “Eeyore”. If he fails to spend more in politically sensitive areas, he will be bludgeoned by one Tory faction. If he puts up taxes, he will be blasted by another. The many uncertainties around Brexit will render most of his economic projections so unreliable that you’d find better clues about the future in the entrails of a chicken.

The chancellor could do something for his country, his reputation and his standing with his party if he unveiled genuinely effective reforms to get more houses built. In so much as there is unity about anything within the Tory party, there is a lot of agreement that the budget needs to show that they are responding to their unpopularity among younger voters. A few crumbs on tuition fees won’t persuade millennials to swoon gratefully into the arms of the Conservatives. More affordable homes to buy and rent might at least induce younger voters to give a hearing to the Tories – or so they hope. The “broken generational contract” has become a common trope with the more thoughtful sort of Conservative. They have noted that housing costs are the single most important source of pessimism among younger people when asked why they think they have poorer prospects than their parents. It is also feeding the anger about inter-generational injustices.

Facebook Twitter Pinterest Philip Hammond will present his next budget on 22 November. Photograph: Chris J Ratcliffe/PA

A study by the Resolution Foundation found that a family headed by a 30-year-old today is half as likely to be a homeowner as their parents were at the same age. The biggest squeezer of living standards has been the ever rising proportion of income consumed by housing costs, especially for those who rent. One senior Tory puts it this starkly: “If we don’t do something about housing, we won’t just lose an election, we will lose a generation.” The political imperative to act is clear. The question is whether they have the political wit and the political will. Those hoping for boldness from Mr Hammond will be disappointed by what has so far leaked out about his budget thinking. One suggestion is that he will announce a discount on stamp duty for younger buyers. This is the sort of short-term stimulatory tickle that George Osborne liked. Good for rousing a Tory cheer on budget day; useless as a long-term remedy for the crisis.

While stamp duty relief might be welcome to those who are already in a position to buy, it will be of no help at all to the many more for whom it will make no difference. It will utterly fail to address the fundamental problem – the shortage of supply. So Mr Javid has been lobbying for more radical measures to fix what he calls “a broken market”. He has publicly suggested a £50bn housing investment fund to be financed from borrowing. That’s quite a conversion to state intervention and borrowing to invest from a man who used to be the driest Thatcherite in any room.

He and other Tories who urge boldness are up against four main obstacles. One is the belief creeping into some parts of government that the crisis might be softening because house prices are entering a period of stagnation and perhaps decline. If they are, this would not be a surprise. On the latest official figures, the average house price is now 7.6 times the average annual salary, more than double the figure for 20 years ago. In the priciest parts of London, the ratio is nudging 40.

A market correction is overdue. Even if it turns out to be a sharp one, an affordable home would remain way out of the reach of many, many people because demand is so far ahead of supply. We need about 260,000 new homes a year merely to keep up with household formation. Last year was one of the better recent ones and Britain still fell about 100,000 short. It is not like this is a sudden emergency. Building has been mostly declining since the 1960s. This decade has seen the lowest levels of peacetime construction since the early 1920s, when Chamberlain came in.

A second obstacle is nimbyism. One cabinet minister who represents a very leafy bit of England recently remarked to me that “even my people are beginning to say that we have to do something”. Tory members and voters have children and grandchildren. They have noticed how horribly expensive housing has become, especially in areas of England where there are high concentrations of Tory members and voters. Yet there is still a powerful strain of resistance to easing planning laws. I am told that Theresa May gets particularly jumpy about this. The prime minister grew up in rural Oxfordshire and twitches to the instinctive fears of shire Tories about being more permissive about housebuilding.

The third blockage concerns social housing. This was regarded with disdain during the Thatcher period when council houses were sold off to their tenants without the stock being replenished. Social housing was treated with neglect during the New Labour years. It is a sort of progress that you now hear Tories say that the crisis can’t be solved by just relying on the private sector. But the 25,000 units of social housing announced at the time of their party conference isn’t going to cut it when there are more than a million folk on waiting lists.

The most stubborn roadblock to radical action is the Treasury. Which is unfortunate because it owns the budget. It is not a new idea to empower local authorities to issue bonds to raise funds to invest in housing and infrastructure. The Lib Dems agitated for that during the coalition years. It is quite common in other countries. Chamberlain practised a version of it. Treasury traditionalists don’t like it because extra borrowing, even to create assets, adds to the national headline figure. Still less do they like permitting borrowing by local government because it is borrowing that the Treasury doesn’t completely control.

To be as bold on housing, as the challenge requires and many of his colleagues desire, Mr Hammond will have to get his prime minister on board. He will have to find his creative side, if he has one. And then he will have to overcome the institutional resistance of his own department.

Chamberlain did that. Be a Chamberlain, Mr Hammond. You too, Mrs May. Make like the man with the brolly. The gods of history might even flash you a smile.