Somehow, hov‘ever, I don't think it's going to happen. But
if I'm wrong and the Chancellor really is determined to remove distortions he could do a good deal worse than start with housing. First the Government further dis- courages the provision of homes to let by tighten- ing rent control, then it artificially stimulates the movement of resources into building for owner- occupation by promising subsidised mortgages. Next, it complains that the balance between the provision of homes to rent and to buy is too heavily weighted in favour of the latter, and that further state interference is needed to get the balance right. The last straw is when the Chancel- lor now tries to browbeat the building societies into keeping their mortgage rates at an un- economic level.
This really is a piece of sheer impertinence. The reason the societies are having to raise their rates is that, on top of the Government's existing dear money policy. Mr Callaghan has jacked up interest rates in the rival National Savings move- ment and now plans to increase the societies' in- come tax liability as well as making them suffer the new SET. Of course, the building societies could easily co-operate with the Chancellor on mortgage rates and simply cut back on their lending. Then. I don't doubt, we would have Mr Crossman coming forward with yet another cockeyed state scheme to meet the shortfall in what is laughably known as the 'free' market.
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