SIR – In 1997 Gordon Brown removed the government from the process of setting interest-rate levels, and gave the task to the Bank of England.

The result is that the governor of the Bank cannot be sacked for ineptitude (Letters, June 22), so he is constructively unaccountable for failure in his main task. The Government gets the blame for inflation just the same.

Just as the Bank under Andrew Bailey has acted too late and too slowly in increasing interest rates, it is a racing certainty that it will be equally tardy when it is time to reduce them again. This, too, will be seen as the Government’s fault.

The Government must take back control from the Bank and abolish the structures in place there that keep incompetents in post.

J P Redman
London NW11

SIR – Among the Tory disasters enumerated by Allister Heath is what he calls “the mortgage interest time bomb”. That is exactly what it is – a dangerous distortion due to timing.

The Bank of England has been raising interest rates but most mortgage holders – who are on fixed-rate deals, which do not react immediately to changes – still cannot properly judge their effects.

This means that variable-interest mortgage holders will be crippled by rates that might prove catastrophic for fixed raters when they get their new bills, and the economy hits the wall.

A recession will then be inevitable.

Rodney Atkinson
Stocksfield, Northumberland

SIR – Cheap borrowing is not the only reason that British houses are unaffordable and mortgage holders are facing serious difficulties servicing their debts. Tax policies are also in need of reform in two key areas.

First, houses are often referred to as “investments” but, in contrast with most other investments, gains made on the sale of a primary residence are not subject to capital gains tax. The result is that home owners in their sixties have hugely valuable properties. Many downsize, retire early and join the ranks of the economically inactive. Meanwhile, young couples who are saddled with student loans have little chance of being able to raise a deposit for their first home.

Secondly, home ownership is frequently used to shield £350,000 per couple from inheritance tax. This results in many older people remaining in properties that are bigger than they need – one more reason why the Government should scrap the tax.

Paul Archer
Derby

SIR – Anyone with a modicum of financial awareness knew that quantitative easing plus zero interest rates was hazardous for our economy, but few could have predicted that those responsible for unwinding its effects would be quite so inept.

Mike Knight
Ascot, Berkshire

SIR – In 1997 Gordon Brown removed the government from the process of setting interest-rate levels, and gave the task to the Bank of England.

The result is that the governor of the Bank cannot be sacked for ineptitude (Letters, June 22), so he is constructively unaccountable for failure in his main task. The Government gets the blame for inflation just the same.

Just as the Bank under Andrew Bailey has acted too late and too slowly in increasing interest rates, it is a racing certainty that it will be equally tardy when it is time to reduce them again. This, too, will be seen as the Government’s fault.

The Government must take back control from the Bank and abolish the structures in place there that keep incompetents in post.

J P Redman
London NW11

SIR – Among the Tory disasters enumerated by Allister Heath is what he calls “the mortgage interest time bomb”. That is exactly what it is – a dangerous distortion due to timing.

The Bank of England has been raising interest rates but most mortgage holders – who are on fixed-rate deals, which do not react immediately to changes – still cannot properly judge their effects.

This means that variable-interest mortgage holders will be crippled by rates that might prove catastrophic for fixed raters when they get their new bills, and the economy hits the wall.

A recession will then be inevitable.

Rodney Atkinson
Stocksfield, Northumberland

SIR – Cheap borrowing is not the only reason that British houses are unaffordable and mortgage holders are facing serious difficulties servicing their debts. Tax policies are also in need of reform in two key areas.

First, houses are often referred to as “investments” but, in contrast with most other investments, gains made on the sale of a primary residence are not subject to capital gains tax. The result is that home owners in their sixties have hugely valuable properties. Many downsize, retire early and join the ranks of the economically inactive. Meanwhile, young couples who are saddled with student loans have little chance of being able to raise a deposit for their first home.

Secondly, home ownership is frequently used to shield £350,000 per couple from inheritance tax. This results in many older people remaining in properties that are bigger than they need – one more reason why the Government should scrap the tax.

Paul Archer
Derby

SIR – Anyone with a modicum of financial awareness knew that quantitative easing plus zero interest rates was hazardous for our economy, but few could have predicted that those responsible for unwinding its effects would be quite so inept.

Mike Knight
Ascot, Berkshire