Sunday, 21 October 2012

On the cost of living and how it would be easy to do something about it...


That starts - as these things do - with a quotation from The Sun:

Here’s the thing: cost of living is going to be THE political battleground for the next year as inflation continues to outstrip average wage rises. Next January alone, the Chancellor has to contend with a 3p rise in fuel duty, new hikes in energy bills, rail fares soaring and the withdrawal of child benefit for the well off, and ALL at the same time. In poll after poll, fuel duty comes up as the most hated tax of all in the Treasury’s vast array. 

Now I know all those clever sorts don't think inflation is a problem. But they are wrong - completely wrong. In terms of politics, the price of things - filling the car up, heating the house, turning the lights on, feeding the kids - is the thing that is bothering people. It isn't just those frequenting food banks but right across society where people are looking at stuff and thinking: "when did that get so expensive?"

The other evening, the BBC led its evening bulletins with food prices. Their focus was on the bad harvests following our rather damp summer accompanied with the usual nonsense about 'climate change'. But what matters here is that they saw the issue of price as not just important but the most important thing in the news that day.

And David Cameron earlier this week started a debate about energy companies and their rising bills. OK it was all handled in a somewhat cack-handed manner but the issue of energy prices (and energy supply) matters because we all buy it.

In the end political calculations have to place more emphasis on the cost of living especially when - as with train fares, gas bills and petrol prices - the choices and decisions of government directly impact on those costs. The problem is that both main political parties seem set on tinkering - gimmicks rather than substantial policies - instead of getting to the real point.

And worse still our politicians seem to want to have their cake and eat it. Low food prices AND something called "food security" (in economics textbooks it's call agricultural protectionism). Can't be done.

Loads of action on 'climate change' AND reductions in fuel poverty. Sorry guys, can't be done.

And achieving 'modal shift' in transport (better described as taxing us out of our cars) AND a thriving small business sector. Again, it can't be done.

Yet politicians, pundits and a whole host of clever academics try to tell us that you can protect farmers, rescue the "high street", provide food and energy "security" and save the planet without making the stuff we buy every day more expensive. This is a lie. And it will stay a lie even when it's wrapped up in sweet smelling weasel words.

If we want to do something about these prices how about:

  • Ending all import controls and tariffs
  • Cutting fuel duty to the same level as it is in, say, the USA
  • Scrapping "green" imposts and special energy tariffs for renewables
  • Promoting available sources of lower cost energy such as shale gas and nuclear power

Of course if we did this there'd be cries of pain from the vested interests who make millions from these regulatory costs and they'll enlist the greens and the unions - all the usual supporters of protectionism - to make the case against freeing the poor consumer from those who benefit from that consumer paying over the odds.

And these will be the same set of folk now shouting about fuel poverty, food banks and the price of petrol.

Perhaps we should just tell them to shut up and go away. Maybe, you never know, opt for free trade, free enterprise and free choice just for once!


1 comment:

Barman said...

How many of those things are we allowed to do while remaining in the EU?