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28.
Firstly, the impact of recent immigration has been very
great. For instance the average annual increase in population,
including natural increase, between 1971 and 178 was 1.8%, but it
more than doubled to 3.8% between 1979 and '81. The growth in the
labour force has been even more dramatic, being 3.4% a year between
'71 and 78 but 7.4% between '79 and '81. Immigrant labour was one
direct cause of this increased growth. It also provided an indirect
cause in that by restraining wage increases, additional persons went
to work so as to maintain the rising level of family income to which
they had been accustomed. The impact of these unforeseen numbers
will be felt in many ways for many years to come.
29.
Secondly, sharp rises in the cost of accommodation and land,
fuelled by the easy availability of credit have caused considerable
distress. In the knowledge that large supplies of accommodation and
land were coming forward that should arrest or reverse the upward
trend, your Government, after some hesitation, decided not to intervene
in the commercial sector. As expected the upward trend has been
arrested this year partly because of additional supply stimulated by
high prices and partly because the high cost of borrowing depressed
demand. A closer balance between supply and demand has now been
achieved. But, because it takes time for supply in the property market
to catch up with increases in demand, I fear that the experience we
have been through may be repeated in the future. At the end of each
of these cycles, it is true we benefit from a substantial increase in
the stock of accommodation but, with the effect of ordinary market
forces or forces distorted by speculation, at a substantial social cost.
/I will.
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