Problem of inflation

This is all quite true, and the attempt to calm the Oil market is commendable, although how he expects to do this, I'm really not sure.

Hoewver, surely the cutting of Fuel Duty by say 20p, will give a massive boost to the economy and also reduce inflation through the reduction of transport costs.

Or am I missing something?

So, if you won't to get "a head", get a "hat !"

The current inflation is not caused by consumer demand, so raising interest rates will merely punish the victims of the current downturn.

Nick says: "This is classic Gordon Brown, wrestling behind the scenes with something he genuinely believes is a major long-term problem."

Wrong! It is classic displacement activity: Brown isproviding the impression of doing something or heading in some meaningful whilst avoiding tackling necessary and productive tasks.

If he wants to tackle a potential long-term problem, then how about he gives us a referendum on the Lisbon Treaty so that we don't go down the road of 'ever closer union' and lose our sovereignty for the foreseeable future?

As for inflation: we all know from our personal experience that it is higher that the official 'low' 3.3% figure.

Furthermore, as more than 70% of the price of fuel is tax and duty (and VAT on top), the reason petrol prices are so high is totally a political decision. Oil could rise to $200 a barrel and it could still be cheaper than it is today if Brown didn't use it as a cash cow (under the convenient pretext of so-called green taxes).

3 Agreed

Anyway, I think 3 - 4% is a lot better than I remember in January 1976 whenit was 23.7% under Denis Healey I believe.

And now we are in the middle of what we told a few years ago wouldn't happen again, something called "Boom and Bust."

Can't blame the Conservatives for either occurrence.

Regarding hair loss, I do hope the battering Nick has taken on the Divisive Davis blog hasn't contributed to further loss

Its a pity Gordon considers the problems the British people have right now to be beneath his great intellect.

If its long term problems/solutions that he believes that he is so good at, then how did we end up here after 11 years under his direction?

Now how big an unexpected windfall are the treasury getting from their %age of the high fuel (and other) prices?

Of course if any of his plans have an expected delivery date past two years, then he isn't going to be around to either complete them, or take the blame for them failing (like everything else he touches).

Classic Gordon Brown wrestling behind the scenes?

He wrestled with Northern Rock for six months and it went bust.

He wrestled with nne reviews of the NHS and left the staff booing at the health minister.

He wrestled with three energy reviews but still hasn't commissioned a single power station and there are no sites at all for his 30 gigawatt wind power promise.

He wrestled with calling an election and bottled it.

He wrestled with Britishness and came up with an idea no-one liked; a British day and hanging out the Union flag everywhere like we were some banana republic.

The one thing he could do he won't do - cut the fuel duty...he's left us to wrestle with that one.

I'd say the return of inflation to "world politics" would be more accurate but nevertheless a good blog. Can't wait for the amateur economists' views and no doubt their wisdom will eclipse that of the BoE MPC. In fact I see its already started at 3#, Hey Purpledog, why not give Mervyn King a call to see if he has a vacancy.

1# Sounds like the sort of suggestion that can be made when in opposition.

Lets cut all taxes AND spend more on services such as better support for armed services at the same time.

4 ScepticMax

Am I right in believing that we pay VAT on the tax as well as the actual cost of the fuel.

If that is the case that is TRIPLE TAXATION. First on income, second on fuel FUEL TAX) and third VAT.

A total con.

Many women find bald men incredibly sexy Nick, you lucky bugger.

Brown is already heading off on the wrong path if he believes oil has a long term future. It hasn't.

It will either become too expensive to use - demand destruction - or too expensive to produce.. Either way it's future is limited.

Everyone is aware that speculators have caused the problems with record oil prices. But it has taken immense political pressure before the PM decides to take action.

Too late.

Inflation is well above 3.3%, and is only kept low because goods such as TVs etc are low in price, but this is because retailers are desperate to sell.

It is a dangerous situation when people cannot afford to eat, heat their homes and travel to work.

The tabloids need to get away with lurid headlines about everyone boozed up, smoking and buying plasma TVs. The reality is that most people are not in that situation.

But it is politics that drives action from this Government. Perhaps if they were proactive they would not need to chase votes. Why can't politicians undertstand this?

The only major long-term problem is Gordon himself.

He should have seen all this coming. After all, he was Chancellor for 10 years. What was he doing?.......apart from putting all his afforts into trying to prize Tony out of No. 10.

This is now geeting serious. People have started to lose their jobs and more homes are being repossessed by the month.

If Gordon really wants to help us, why doesn't he start by reducing the amount of duty we all pay through the nose to our Treasury for our fuel?

No? No change there then.

5# check out some inflation history of 1980 as well, feel free to come back with results (21.9%) after being below 10% at the time of the 1979 election which I believe was the return of the Conservatives.

Just a bit of ballance to your comment.

But surely that's history, Why not quote the average inflation rate over the last 12 years of Labour Government, surely that would be slightly more relevent.

8 robinJD

"He wrestled with Britishness and came up with an idea no-one liked; a British day and hanging out the Union flag everywhere like we were some banana republic."


Even then they got it wrong by saying it should be a holiday we all ready have, August Bank Holiday I think, which isn't even celebrated right across the UK.

Perhaps they though having an extra holiday would cause inflation in the Bank Holidays index.

Total incompetence.

13 Neil Small

"It is a dangerous situation when people cannot afford to eat, heat their homes and travel to work."

Add to this that even when you try to do something that doesn't cost much you are increasingly stopped from doing it by ludicrous Health and Safety legislation.

They have to go.

Surely Jedda is no more the capital of Saudi Arabia than New York is capital of the USA! What happened to Riyadh???

"Classic Gordon Brown"

Do you mean by that "rearranging the deckchairs on the Titanic", or simply "Fiddling while Rome burns"?

The suggestion that Gordon Brown can influence Saudi production of oil is lamentable.

Can Flash Gordon really get the King to do something that a real oil baron (who's just been in town) and is the President of the US cannot?

If the public finances were not in such dire straits Gordon could have helped the uk motorist by abolishing VAT on fuel, which has already had the ridiculous fuel duty already applied.

But, of course, classic Gordon Brown actually means tax and spend well beyond our nations means doesn't it?

"Classic Gordon Brown"
Is that supposed to be a complement to him or an insult? It must be an insult, because comparing going to Jeddah to beg for help from desert despots vs. giving the economy some respite through fuel duty reduction to at least a European average... the latter would be a much better `classic' activity.

Political anoraks always go on about no bald man has been PM - Winston didn't have much though. What a load of tosh! Who cares? Bush is a clown.

On oil I am the hyper type who is told 2020 is roughly when the carbon shortfall kicks in.

Discoveries are not that massive.

Oil company share prices are static so there seems to be confidence there.

Long term futures don't seem to be indicating disaster or we would have heard by now. There is short run speculation of course.

But to me the above don't add up. Either we are going to run out of oil or we are not.

Either way I would have thought Brown whilst taking necessary action to counter speculation skews should be accelerating the rush to renewables. Tax breaks for electric cars - and spend more on wind farms or the like?

Carrots are more popular than sticks as we head into a recession-ish period.

As the Captain on the Titatanic said "Get those deck chairs re-arranged!".

As Gordon well knows, the cost of fuel is mainly tax. He could cut the price of fuel to under 50 p per litre.

As we pay higher and higher prices, his government obtain more and more revenue. Thanks to the fuel duty escalator, fuel duty goes up faster than the price of fuel.

If Gordon really cared about this issue, he should have been wrestling with it 11 years ago.

When he inherited from the Tories an economy in good shape, Gordon could have continued cutting costs and reducing borrowing.

Unfortunately he has been spending our money like a sailor on shore leave these past eleven years.

The result is that he cannot cut the fuel duty, even if he wanted to. Every penny is already committed to the huge spending and the PSBR is creeping up and up. Hence he is thrashing about, blaming everyone and anyone he can, in an effort to make us forget the important fact.

It's his fault.

# 19 chrisbowie

It says so much that we think of Gordon and both mention the Titanic! National mood I suppose.

"This is classic Gordon Brown, wrestling behind the scenes with something he genuinely believes is a major long-term problem. It will be fascinating to see what progress he can make in the weeks to come."


The idea that this is somehow "behind the scenes" is laughable. And let's not forget that idea of how to deal with long term problems is what got us where we are today.


Seeing a "real change" in his rhetoric is irrelevant because it is still just rhetoric. Hell say whatever he thinks will make us leave him alone to do what he wants.

I fear that GB and AD are unable to reduce fuel duty by any significant amount because the coffers are empty.
Any such reduction must be by borrowing more a la the 'solution' to the 10p tax fiasco.

15 eatonrifle

I think you are incorrect. In 1979 the Conservatives inherited awful inflation. It took several years to get it down.

Can I suggest you look at the statistics i


1975 average 24.2%, highest August 1975 26.9%

Then when records began properly, figures for December of each year

Records
1976 14.8 (23.7% in January)
1977 12.8
1978 8.0
1979 16.8
1980 14.0
1981 11.9
1982 6.6
1983 4.8
1984 6.3
1985 5.1
1986 3.4

As you can see inflation fell significantly during the Conservatives.

Sorry!!!

17. At 11:44 am on 17 Jun 2008, mikepko wrote:

Add to this that even when you try to do something that doesn't cost much you are increasingly stopped from doing it by ludicrous Health and Safety legislation.

They have to go.


And now we have the Performing Rights Society trying to get one man businesses to pay for a licence if they listen to the radio. And that includes taxi drivers!

For large scale public performances, fair enough, but in a car?

And the latest news that the Cabinet will not receive any pay rises? Minor political posturing. Will the rest of the MPs do the same? This will not benefit any normal person.

But you cannot blame the politicians for everything. Try having a closer look at the civil servants who are running many things. That is where a clearout is needed.

Little things like this are gradually stopping people from enjoying life.

On the BBC WEBSITE


"MINISTERS GIVE UP 2008 PAY RISE

Downing Street has announced that all Cabinet ministers will give up their pay rise for this financial year.

The government has also rejected a £650 a year above inflation rise for MPs for the next three years as recommended by Sir John Baker's review of MPs' pay. "


That should bring down inflation!!!

This oil price hike is caused predominantly by financial institutions speculating on oil in order to repare the gaping holes in their balance sheets caused by their profligate and corrupt credit trading.

To suggest that the speculation is "adding" to the problem, rather than causing it, is naive.

The writing of Jim Williw offers some excellent independent insight, if perhaps a little brutal

www.goldenjackass.com/main5.html

Eaton, you should do some real research, inflation peaked above 25% in 1975, under Labour.

However, even I can admit that it was not ALL labour's fault. There was an international oil crisis, the Nixon scrapping of the gold standard and the effect that had on the value of currency and other factors added to the union militancy that created the stagflation of the 1970's.Not ALL labour's fault, but Labour did NOT handle the situation it was in at all well though. Just like today.

As I said in my earlier post, the inflationary pressures are not caused by consumer demand. There are not hordes of people demanding more goods and willing to pay more to get them. It is not caused by businesses booming and paying their staff 25%+ pay rises. It is caused by the oil prices and the cost of grain, wheat, corn, rice rising in international markets, it is caused by Chinese products becoming more expensive as THEIR inflation and factory gate prices are rising, and it is caused by the value of currency being undermined by national debt.

Raising interest rates would exacerbate the problem, NOT fix it.

27 Neil Small

I am a one man business working from home. My radio is on playing music.

QUESTION Should I be worried about a visit from snoopers?

ANSWER Very likely.

That's how the government got unemployment down. More snoopers, and minor civil servants.

26#

June 1980 21.9%, presumeably thats why you chose December. Either way I did say that's history.

And the figures for the last 12 years please?

Dare you to quote them year by year? well?

#15 take your own advice;

The indicies used to measure inflation have been consistently butchered by this bunch for their own ends: i.e. to meet their own rules, which then then break anyway and have to find other ways to stitch up the numbers.

Gordon Brown is passing water in a zephyr, so to speak.

The Torygraph's Real Cost of Living Index, which includes mortgages and Council Tax is currently 9.6%.

Now that is a number you can believe in.

Unlike the Governments fairy tale CPi/RPI indexes.

If ministers are having to give up on a pay rise this year, I'm sure they'll find a way of gettIng some of it back through their expenses!

Given that even the lowest estimate of current inflation is now 3.3%, and it's widely agreed that it will only increase in the near future, will we now see NHS staff renege on their pay deal as they stipulated they might?

It seems to me that NHS and other public sector staff are now expected to accept a pay cut in order to reduce inflation, whilst businesses are increasing prices so that they don't lose out.

Good to see the government using their own taxpayers as a bulwark against the failures of the market.

32 eatonrifles

Agreed re June 1980. But you really can't say inflation was bad in in 1979 and a few months into the Conservatives it was worse because they were in government. Look at the trend. That is important.

These things take time

Regarding the last few years, Labour inherited a low inflation economy, gave control of interest rates to the BoE, and thus can't take all of the credit.

Sorry. You are clutching at straws me thinks!!!

30# A ballanced and interesting reply, credit where its due, although i stand by the figure of 21.9% for the 1980 peak.

I think the type of inflation we're dealing with today is called something like "cost push inflation" in economic jargon. I guess that monetry policy fixes through interest rate increases dampens existing demand and brings down prices and wages to a point where demand picks up. Very complex things economies particularly when world factores are mostly driving things.

There is a well known qoute from (I think Eisenhour) who said "Will some one give me a one handed "economist" meanig he was tired of hearing his advisors say "on the one hand we could do this BUT on the other hand we could do the opposite"

All very interesting, but shouldn't the real question be why the govenor of the Bank of England needs to send a letter?

Let's move on. Surely it should be an email in this day and age...

Fuel tax

Fuel prices are a world wide problem. Cutting tax will just mean that price will go up and turn what is now tax into profit.

The Conservatives solution seams to be to use this kind of green taxes. To encourage good behaviour, but use this revenue to give tax cuts elsewhere.

Slight problem is that if people use less fuel as the tax is intended to do. That tax cutting revenue will disappear. What happens then?

Also this idea is a good description of Stealth Taxes as it cuts income tax and raises it in other areas.

So this conservative party will be better at running the economy how?

38#

Would simply be quoting matters of fact rather than opinion to say what the last 10 years inlation was. You don't seem to want to. You're giving the BoE the credit for low inflation over the last 12 years but when it goes up now it becomes the Governments fault.

What a surprise!

Just how does Gordon Brown plan to influence the oil market?

I think his "Summit" with the Saudis is an attempt to establish himself on the international stage; something he has failed to do to date.

I can't see them listening too much either as it's fairly obvious he won't be around for too much longer - even if David Davis is doing his best to make him look good!

He might find it useful to establish himself at home first - perhaps a few pence off fuel duty for a start...

Nick,

I do not expect inflation to be significantly reduced following on from any visits GB does or does not make.

Nor do I expect the UK economy to be able to weather international financial crises as they arise. It is depressing to realise that Brown has so badly mismanaged the economy in the good times, that he cannot now do anything to assist the hardworking taxpayers when times are harder.

In their turn, the only response the BoE are able to make, because of GB's 3% rule, is to increase interest rates. Just what the economy needs (NOT).

Do you think he will accept any responsibility for this situation in the course of his travels and meetings? Not likely.

In my humble opinion, the sooner he goes for good, the better. I would even consider chipping in to cover the VAT on his fuel tax costs if that would help him make up his mind. However, I don't suppose I can expect a quick response to this offer.

In my opinion Brown and Labour are finished now because the economy has gone sour and will not recover in time to help them at the next General Election.

The key thing is what happens next.

When I talk to people, most folk realise that 'Britain' is over and it certainly will be when the Scots have their independence referendum in 2010, post the General Election; when 'Dave' and his shower are in power at Westminster.

Older people I speak to have a clearer affinity with Britain , hardly surprising as some of them fought for this country - and they seem to blame Labour for the country unravelling, via the devolution process.

Younger people don't seem that bothered either way.

Nevertheless, it is going to happen, so I do smile when I see politicians like Brown and Milliband warbling on about 'Britain' this or that.

I guess the future political recasting of this country in just over two years into an independent England, Scotland and Wales is just too much of a quantum leap for them to even think about.

Why is brown spending so much time on foreign policy?

Because that is what PM's do when they have failed on the home front.

What he says, and what he says he thinks while abroad is all a bit irrelevant - it isn't in his power to deliver.

At home - where he does have power to deliver - he fails to deliver because he has absolutely no self-confidence so will not make a decision.

'Behind the scenes' == 'Wait and see'

People often remark on the UK's ability to punch above its weight in international affairs, but I hadn't realised just how influential we were. It is obvious from a number of posts here that the responsibility for the fuel protests in France, Spain, and many other places lies with our own Prime Minister. Quite amazing really.

"Why is brown spending so much time on foreign policy?

Because that is what PM's do when they have failed on the home front."

The tradition action for leaders of countries when they are unpopular is well known.

After all actions speak louder than words - fortunately we don't have the military capacity to wage war ourselves but I assume that bases will be made available.

Inflation at the moment is increasing due to:

1) Increasing transport costs (AKA price of diesel/ oil) having to be passed on.

2) Inflation in China.

3) The pounds depreciation against the Euro and other non-dollar currencies.

4) Increase in basic food costs - see the increase in wheat and rice.

Now the only one the Government can directly affect is increasing transport costs.

It should also be noted, of course, that any reduction in oil price will be temporary.

When the President made a gag about your baldness Nick, you should have said "well, nothing grows on a busy street". That would have shut him up!

re 10: yes; you're correct; we do pay vat on the excise duty (ie the tax is taxed). VAT is payable on the retail-price, and the retail price includes excise duty.
So, they add excise duty to the real price, then charge vat on price-plus-excise-cost.
This means that when they increase excise duty they also increase vat implicitly, so we lose twice when they increase the excise amounts. Same logic applies to booze and cigarettes, and anything else that has excise duty applied to it.

Also, consider the fact that things like tv licences, car tax, and council tax are all paid out of your post-taxed income, so you effectively pay tax on your tax there too.

Also consider the fact that Brown's been doing massive private/company pension raids since 1997, so you're getting taxed on your post-taxed investment/pensions earnings even more than you used to.

When you go through the maths of all the different aspects that are taxed, it's often the case that most people on low to middle incomes have a real tax burden of around 70% to 80%, and a lot of people have a real tax burden above 100% and therefore need to get into debt just to stay alive.

Brown's advice there is to claim tax credit, but a lot of people can't do that for practical reasons (eg the self-employed) or they're simply not entitled to it. Single people on low incomes are the worst effected, often having a real tax burden of above 100%.

Brown's determined to make taxes regressive in nature (ie so that they hit the poorest hardest) because he doesn't understand the basic maths behind why progressive taxes (eg income tax) are fairer.

Inflation is going to continue to rise in the near future owing to the huge increases in oil prices coupled to the dramtic rise in corn price that is being driven as I understand it by increasing use of corn for manufature of high fructose corn syrup (now used as a sugar replacement in many manufactured foods and beverages) and also as corn is now being used for biofuel applications. More expensive corn = more expensive animal feeds amongst others...

Food prices have dramatically increased recently and this will continue. Supermarkets the country over sit on the price of "known value items" like bread and milk and keep these costs artificially low. Stuff like cooking oil recently doubled in price which no doubt will drive more increases in costs in the fast food industry.

What does Gordon Brown do in response to this - he announces we need more nuclear power to combat the oil price rise. A policy that will at best have an effect next decade.

Can someone somewhere please bring the issue of HEMP to the front pages so that at the very least our Govt can have a proper debate about this wonderful plant.

Hemp contains almost no THC (the active bit in cannabis) so this plant can be legalised without affecting the drug laws of this country.

Hemp is the single fastest growing cash crop in the world - it has a multitude of industrial applications from producing biofuel, to paper , to fabric, to plastics, to animal feed. Hemp paper is better quality than paper from wood for example and uses less chemicals to process (= cheaper paper)

Why is this plant being ignored? Hemp could help break our complete dependance on oil - it could drive the British economy onto great things again and would within a year or so bring down the costs of rising food which would call a halt in some ways to the rising inflation figures.

Industrialised Hemp production will bring benefits to our economy much sooner than increased nuclear energy will and may alleviate some of the need for nuclear energy in the meantime.

It seems noone in the mainstream media anywhere is even mentioning HEMP. Why not?

'Classic Gordon Brown' in three easy steps:

1 - Spend six months looking at a problem from every possible angle (AKA dithering).

2 - Make a decision that turns out to be a) wrong or b) right but too late.

3- Launch an enquiry.

Dear Nick,
Brown Brown Brown, bush bush bush, blair blair and more of the same These men have created a world event called Terrorism, the new cold war, Terrorists should target the politicains instead of the people BECAUSE the politicians are targeting the Public with their insincerity, arrogance and ignorance of the voters.
" THEY ARE WORKING TO THEIR OWN AGENDA, to which the general public are excluded"!!!!
As far as they are concerned the voters can go to hell.
All this security is not to protect the public but the exact opposite, it is to protect them FROM the public, with LAWS that impede the Freedom of the public and suppressing them is their end game, so they can do exactly what they want. A POLICE STATE. the end result, The THIRD REICH IS BACK.

Demand > Supply = Price Rise.

It's called capitalism, I think. Now we are finding out about the real price inelasticity of demand for oil.

The reality is that Gordon Brown is fiddling while oil burns, and he knows it. It's about being seen to do something when there is nothing you can really do.

He is powerless over the world price of oil and can't afford to cut taxes here. However I suspect he WILL cancel the fuel duty rise, due in October having been delayed in the Budget. The increasing VAT take means he can just afford this.

The Government in general and GB in particular must be seriously worried about the impact of the tanker drivers' strikes. They have reminded people, especially here in Devon, how impotent politicians really are and how much we all rely on our cars.

Neil Young said it all: "I'm a vampire babe... I need my high octane"

#49

An alternative way to approach the baldness debate is to point out that production is high on fertile ground.

Perhaps it is safer for all concerned if journalists stick to facts rather than taking sideswipes at the leaders of other nations.

In the meantime, has the price of petrol fallen since GB announced his visit to Jeddah?

All the best, really.

Gordon can't cut fuel duty - he has wizzed all our taxes up the wall and has no room to manoeuvre.

......... 'Caretaker-PM-Bean' has no alternative than to ineffectually 'wrestle'.

You have to wonder if Gordon wishes he'd managed a few things differently:

1. Selling off our gold reserves at rock bottom

2. Building and then frittering a vast 'war chest' of cash for seemingly no return

3. Forced us to rely on cars - by failing to invest on public transport

4. Spending his last few million on trying to buy Crewe and Nantwich

Does anyone actually believe any of the numbers provided by the government anymore?

The inflation number is clearly totally bogus.

The education statistics have been fiddled so much the universities are now owning up to it.

No-one can give an accurate number for the cost of Northern Rock.

Nobody can give you an accurate estimate of the cost of PFI off balance sheet financing sitting on the government accounts.

The cost of the olympic games changes every week.

There has been a blank denial of any damage to the pension system everyone I know has had their estimated benefits slashed.

Unemployment is recorded at one million but three million are excluded because of invalidity benefits.

The numbers of troops in Iraq was supposed to be cut but now they're going back up.

Classic Gordon Brown? He can't even add up.

"Spending his last few million on trying to buy Crewe and Nantwich" (#56).

More like £2.7 billion - and it was our money, not his!

Yes, one suspects that hindsight will see this as bad a decision as a politiican can make...

42 eatonrifle

Sorry, had much better things to do, ie. out for coffee with my high fee-earning management consultant wife. Just put that in to irritate you.

Ok, well my 26.9% inflation in August 1975 under a Labour government is worse than your 21.9% in June 1980 under a Conservative government.

Anyway, lets have a look at 1993 to 2007. All of my figures are based on the Underlying Annual Price Index (RPIX) fro December (12 months to the end of the years)

1993 2.7 Conservative
1994 2.5
1995 3.0
1996 3.1
1997 2.7 Labour
1998 2.6
1999 2.2
2000 2.0
2001 1.9
2002 2.7
2003 2.6
2004 2.5
2005 2.0
2006 3.8
2007 3.1

So as you can see, Labour inherited a low inflation economy in 1997 and since then the BoE has set the rates, not Brown.

Compare that to 1979 when the Conservatives inherited a very high inflation rate that took years to work out of the system.

What really caused the problems in the UK was the 1970s when prices were going up by between 15 and 25% per year. Today's combined oil, food, heating increase pales into insignificance to a few years of those rises.

Add the fact that Labour have regularly changed the way the index is put together to massage the figures to make them look good. Ask any economist.

The good thing for all of us is that the inflation rate is currently low compared to the late 1970s when Labour were in power, and I believe had to as the International Monetary Fund for help as they had screwed up the economy. Does "Winter of Discontent" ring any bells? I remember it VERY well.

So on the statistical basis, even taking into account the last few years your argument does not stand up.

QED

"This is classic Gordon Brown, wrestling behind the scenes with something he genuinely believes is a major long-term problem."

If this is classic Gordon Brown we can expect the same results of his wrestling behind the scenes in the treasury.

Selling of gold at historic low
Quiet destruction of millions of people's pensions.
Regulations that allowed banks to get into the situation they are now in.
The slow strangulation of the armed forces through too many wars and not enough funding through the treasury.

and then in the PMs chair...
The 10p tax scandal
The Northern Rock fiasco.

If this is 'classic Gordon Brown' then I can quite confidently predict that oil will go a lot higher than anyone expects and the shell strike next week will have a much greater impact than the last one.

57 RobinJD

Correct about the massaged figures.

On holiday a couple of years ago we met a statistician employed by a large regional health trust. Over a couple of bottles of wine he opened up and told us how much he was being paid to ensure the figures given to the government met their targets.

Asked how he did it, he simply said, "they tell me what they want the figures to show and me being a statistician the rest is easy."

I asked how near the truth the figures and he laughed.

My wife then said"why don't you tell the press," to which his answer was "you must be joking. You know how much I earn. I couldn't earn that sort of money anywhere else. "

Just one health authority. Multiply by Heaven knows how many times and I think we can all see the problem when reality doesn't match the statistics!!!!

10. mikepko wrote: Am I right in believing that we pay VAT on the tax as well as the actual cost of the fuel.

Correct the government currently adds fuel duty of
54 pence per litre for unleaded petrol
57 pence per litre for diesel
It then adds 17.5% on top of both the retailers price and the fuel duty

53p from the retailer + 57p fuel duty, add 17.5% Vat and you get £1.30 per litre. Tax on a tax.

Given the costs that have to come out of the 53p. (Retailing, transport, storage, refining etc) which dont change even if the cost of the raw material does. Just what can a reduction in the price of the actual oil achieve 60% of the cost of diesel is taxation.

So lets do a little role play here. You are the King of Saudi Arabia, GB kneels at your side and explains that he has a little problem. "Fuel is costing too much in my country" he pleads.

Your reply here.............................................

.....................................................................

Actually you might not need that much room

BBC WEBSITE - POLITICS NEWS


PM hits back over civil liberties

Gordon Brown has defended the use of CCTV, ID cards and the DNA database - saying they protect civil liberties.

Now the debate is on, OPEN FIRE!!!!

#59

"Today's combined oil, food, heating increase pales into insignificance to a few years of those rises."

this may well be true but surely the powers that be need to take action now to head off such dramatic future price hikes.

We are at - or very close to "Peak Oil" where the worlds demand for oil greatly outstrips supply with not enough reserves to cope with said demand.

The way the oil prce is going we have to break our economy out of the oil dependance otherwise in another few years time when the Oil issue *really* starts to bite it'll make the Winter of Discontent seem like a teddy bears picnic.

mikepro (#59)

Many of us certainly remember the Winter of Discontent, but I'm not sure the parallel is that apt.

However, I'd guess that Jim Callaghan wishes he'd called an election earlier, when he had the chance, and not delayed (remind you of anything?) On such threads does history hang.

"Now is the winter of our discontent made glorious summer by this son of Govan"

Doesn't have the same ring to it, does it?

I am not an economist, although the fact that I budget the household expenses proves I'm not completely hopeless. To my unsophisticated, simplistic ideas, it seems that inflation is actually only hitting the middle and working classes. The really wealthy, i.e. public company directors and bank CEOs, will receive even larger bonuses, golden handshakes and plain good oldfashioned handouts. Politicians and local council bigwigs will wallow in the public purse even deeper, whilst the incompetents who run trains, public transport and all the utilities will guzzle away. For them it will be business as usual, snouts in troughs.

#61

why do you not surprise me?

because the Brown doctrine is centralisation and targets.

Eastern Europe made this mistake and ended up with thousands of corrupt officials lying about targets they had met.

Ken Livingstone ran the GLA in the same manner - he regarded it as failure to not spend the money. What a farcical waste of tax payers money.

This is the NewLabour conceit; every time they talk about 'hard working families' it's those same hard working families' taxes they are wasting on useless enquiries.

Ed Balls was caught saying 'so what' about this issue - another NewLabour conceit; they don't even care that you know.

Tis government has to be shamed out of office.

#63 Mikepko

On a similar vein, did you see this one;

https://news.bbc.co.uk/2/hi/uk_news/politics/7458211.stm

I just love the Shadow Justice Secretary's comment right at the end....

"Public safety must come first, and any suggestion that human rights laws could be an impediment to sensible and necessary safeguards must be challenged decisively."

Those darn Human Rights, always getting in the way!

Our Nick scrubs up well says my wife.
There you have it Nick!

Nick

I've just noticed that Caroline spelman is to face an enquiry into the "nanny" affair, and that such an enquiry is exceptional. Well, I thought, there must obviously be more to this than I imagined. Then later I read that it was Caroline Spelman HERSELF who asked for the enquiry. This must be one of the most disingenuous pieces of journalism I've come across in quite some time. I hope whoever it is is proud of their achievement, since it got prominence but at a cost of showing up the uglier side of BBC journalism.

Then, at the next blink of an eye, up comes another report, that Hazel Blears has lost official files.

Now, it all adds up. Neat distraction from the real story.

66 Angela the Mighty

I budget and am careful too, even though we are comfortable. Both my wife (vicar's daughter) and I were brought up to be careful with money due to the lack of it when we were young.

Luckily we have a small mortgage started in 1988 but with a reasonable down payment.

Other than that no debt.


Run two cars, one old banger, but know that 45-55mph and 2000rpm are the most efficient for diesels. It amazing how much fuel you can save by driving carefully,

Cook everything from fresh from ingredients from local suppliers - farmers market, farm shops, etc. Only use Tesco for things we can't get locally and booze. This saves lots of money compared to ready meals, etc, and puts money into the local economy. Bake my own bread, really cheap this way. Use all of the vouchers we can to save money.

Talking of economy, use Economy 7 for all clothes washing, water heating and lots of cooking, casseroles, etc, that can be cooked overnight. No dishwasher or tumbler drier which use masses of electricity.

Also turn everything off at night except the fridge-freezer. A rated.

We have a very old, over 20 years, oil boiler that we need to replace this year for a much more efficient one that will reduce both our bills and carbon footprint.

Also looking for a small woodburner for our living room so that we can use much less oil and have a warm downstairs in the morning. Lots of "free" wood where we live, washed op on the river estuary, etc.

Why do all this? First so we van put away a bit more for our retirement which would have been better if Brown hadn't raided it.

But second, it makes real sense not to waste hard earned money.

This is a lesson the the government should learn. Find hard working solutions rather than throwing money at problems.

70 Terry

Thanks for pointing out about Hazel. It begins


"Restricted files lost by minister

A personal computer holding sensitive documents relating to defence and extremism has been stolen from Hazel Blears' constituency office in Salford.

The theft may mean the communities secretary has broken rules on the handling of restricted government information, the BBC has learned. ..."

Regarding Caroline Spelman, even as a Conservative I don't really like her. For me, she is in the same category but not quite as bad as Dawn Primorolo - condescending, school prefect, talks down to everyone, both above and below her.

Mikepko, who do you think you are kidding?

Why is it convenient for you to miss the years 1987 - 1992?

We had the biggest economic disaster in them years, all thanks to Tory Govts. and all that when there were no oil and food inflation the likes we have at the moment.

Some of my friends nearly committed suicide in them days cause THEY LOST EVERYTHING, including their families.

Hypocrisy or what?

73 onlywayup

Had you asked me I would have done, but I was answering etonrifle's question, not one that has just arrived on the blog. He wanted to compare 1979 and 1997.

By your post it seems that I was correct.

I was self-employed from 1987 - 1992, and still am, and never out of work although things have been tight from time to time.

It looks like we may be getting a repeat of that period sadly for which the Conservatives will not be to blame.

73 onlyway up

Ok, here we go.

Underlying Inflation on the same basis as before (December of the year)

1987 4.0
1988 5.1
1989 6.1
1990 9.0
1991 5.8
1992 3.1

Nowhere near as bad as 1975 (Labour) and 1980 (I'm being very generous here as the Conservatives had just come to power, Conservatives0.

And quickly back to a low figure. For labour it was year after year at over 10%.

How is Hazel Blears getting on with the price of petrol ?

The subject is strictly speaking inflation. Now with so many discussing how they economise and keep household expenses down, I will refer to inflation in a medical sense. My blood pressure has become inflated and I am very angry. I must weigh my words, lest Faceless Moderator banishes me once again to those dark hallways and corridors where naughty schoolchildren lurk.
My anger is directed at Hazel Blears, that puppet-like lady (Judy in Punch and Judy?)who it seems has broken regulations and allowed sensitive material to vanish from her office. Now, the delicate question is this - was it through incompetence or something more sinister?

I know. I hijacked the thread because I actually found the piece pretty annoying and had to let it out. No matter who it related to. The way the piece was written was not good, in any way shape or form. I started to feel the same way about the theft of Hazel Blears' laptop (lost is not the same as theft), until I saw that it may have contained information on it which should not have left Government offices.

77/78

In addition to the information not being authorised to be in her office, we might wonder if any of the party workers in her office had access to the information. I take it was password(s) protected, but who had the passwords(s).

I'm sure she will just smile her smarmy smile and say its not as important as Caroline Spelman paying her nanny 10 years ago.

Distinct lack of Old Labour posters this afternoon, don't you think?

PS

All this excitement with Spelman, Blears, inflation, etc and not a word from Nick.

Any bets on what his next blog will be?

My money is on

"UPROAR IN THE COMMONS AS BROWN SUGAR WITHDRAWN AS ECONOMY MEASURE

Continues....

MPs today protested that brown sugar has been withdrawn from all Houses of Parliament tea rooms and restaurants as an economy measure.

Alastair Darling, who being a frugal Scot only drinks tea with white sugar, commented,

"We owe it to the Country to set an example. This is among our best policies to reduce inflation."

Later this afternoon, a Liberal MP had his drinks subsidy removed because he used HIS OWN brown sugar to sweeten his coffee. A government spokesman said

"there is a precedent for this as we currently refuse to treat NHS patients who pay for their own drugs."

28 mikepko. ministers give up 2008 pay rise.
What year was it that the tories gave up their pay rise, trying to remember.

82

I see that David Davis' website is now up and running.

www.daviddavisforfreedom.com

Just had a look and it looks pretty comprehensive.

Interesting times ahead!

Mikepko @63.

Brown is used the lame excuse of 'public opinion' to push through the '42 Days'.

Strange he doesn't take that same 'public opinion' into account when he denied us the right to a referendum on the Lisbon Treaty.

Goose... gander....

Heck, this lame duck will soon be cooked.

If the best that the cabinet can do at this time of doom and despondency is give up their pay rise we are doomed, all doomed.

Perhaps they will vote themselves a great big rise in expenses to make up for it!!!

News - Quote - Oil prices set a new record on 13 consecutive days over the past two weeks. They have now multiplied six fold since 2002, compared with the fourfold increase of the 1973 and 1974 "oil shock" that ended the world's long post-war boom - unquote

Remember the petrol rationing in all of Europe in them days Mikepko?

Is that why you hide the truth as to why there was high inflation in those years? Is that why it is convenient to hide the fact that in between the figures for the Tory years you omit to mention the shocks that we had 13, 14, and even 15% inflation with 15% interest rates? Did you not have friends that lost everything in them days? We had people working full time on a £1.45 an hour in them days. Is that why the Tories were against the minimum wage, because they were/are the defenders of the poor?

What about the 3.6 million unemployed that Labour inherited? The old age pensioners being found frozen to death because of the misery! The National Health of a third world country! The shambles of the railway network, not forgetting the privatisation. The billions the Tories racked from the North Sea Oil pumping at full capacity, and which accounted for over 10% of Lawson budgets. Have you forgotten that as well Mikepko?

Amnesia or what?

Read the following and learn:- quote
BBC economics editor – Evan Davis says:
The painful parliaments are those where we have to reassess our whole view of the strength of the economy.
For example, the problem in 1992 derived not from a slowing economy. It derived from the fact that by 1992 we realised the late 1980s boom had been a temporary aberration, and not the permanent turnaround we had thought.
Once we sat down it became clear that the rise in government borrowing was not a blip caused by a recession; it was STRUCTURAL.
The economy was simply not as strong as we had been thinking for several years and consequently it would never generate as much tax as we needed.
So taxes had to be raised - or spending cut back. – unquote
We got both, tax hikes and massive cuts on an unprecedented scale.
Good night Nick.

grandantidote @81 wrote:
"ministers give up 2008 pay rise."

By what measure - or target achievements - do ministers believe they deserve even consideration of a pay rise?

They are, literally, the architects of virtually all the miseries we currently suffer - and will continue to suffer for the foreseeable future until this miserable lot is booted out of office.

# 47 jimbrant, so Gordon Brown is responsible for the fuel shortage in France and Spain. I was'nt aware that he's responsible for any fuel shortage anywhere but then according to the incredible manic Tories on this blog he's probably responsible for the earth quakes in China and Japan as well as the monsoons sweeping the east, get rid of GB and the World will suddenly recover then we can all bath in the sunlight with Dave Gideon and perhaps if he's lucky Saint David. life will be so wonderful then. Then suddenly we will all wake to what dangerous Dave the policy free defender of the faith and the Eton boys club are going to do,God help us.

According to the BBC: "He [Brown] said terrorists wanted to destroy British "freedoms" and that must not be allowed."

Of course not, he wants to be the one to destroy them.

# mikpko, Here we go again mike I met a man that told me that this was happening and then I met this lady who told me something else, you really are a Tory are'nt you tall tales and no substance. remember the story you told us about pater well perhaps he should have done a little more.

85

Guess you don't like me then.

All you asked me to do was look at the inflation figures for 1987 -1992. Done.

Had you asked me about the economic situation in that period I could have said the same as Evan Davis, or pretty much.

The thing is once a government mucks things up there is no way back. 1979, 1997 (should have been 1992 but Kinnock was unelectable) and now 2008.

The news for Brown gets worse and worse daily, Labour is seen as dead in the water by the majority, and only "dyed in the wool" Labour supporters, of which there are fewer and fewer if the Crewe election is anything to go on, believe that Labopur can win the next election.

I admire your tenacity. Good luck, you need it.

# 86 sceptic max typical Tory reply all rhetoric and no answer,try again,
Write a hundred times, "I must answer the question"rhetoric will not do sceptic, Sorry.

I'm at a loss, one minute global warming is a problem and the way to sort it out is to reduce the use of fossil fuels so lets have green taxes, next oil prices go up and Gordon Brown jets off to Jeddah to ask the Saudis to increase production.

He might be better if he stayed at home and read "Squandered" by David Craig "How Gordon Brown is wasting one trillion pounds of our money" then started ensuring that we the hard pressed taxpayer started getting value for money from our taxes.

He could ask why we have more admirals than ships in the Royal Navy and why it would have been cheaper to buy new Chinook Mk2's rather than spend more modifying the Mk3 back to Mk2 spec. But then this NuLabour lot have never been into getting value for the taxpayer, they seem more interested in punishing the hard working families for having it (unless of course you are an MP and you can isolate yourself from the consequences of you own tax policy).

87 grandantidote: "so Gordon Brown is responsible for the fuel shortage in France and Spain. I was'nt aware that he's responsible for any fuel shortage anywhere"

No, neither am I. Irony, old chap, irony.

Sorry GA,

Which of my posts are you referring to. It must be the statistician (have I spelled that correctly?).

Absolutely true, and most posters know it.

In addition, as I think I have already posted, ask my wife about the person she had to hire at about £25 - 30k per annum just to supply housing data to the government. Once she got into the work they moved the goalposts and wanted the first few months recalculated so that all of the figures looked better. And when the new figures weren't in-line with requirements the goal posts moved again, with all the work that entailed.

And the result, the employee plus my wife were submerged under figures that meant absolutely nothing other than the government "proving" that they were doing a good jbb when everyone knew it wasn't true. And the rest of my wife's work suffered causing stress and time off work because of it.

Just post your real email address and I'll get her to email directly with the truth about Labour statistics.

93 jimbrant

"Irony"

Isn't that something that was iron (like Brown's iron fist) but is now just rusting and falling apart?

Interesting how people feel a drop in duty will ease prices at the pump. As most of the suppliers claim they lose at the pump under the current system, they will simply raise their prices to to compensate for any drop in duty.

This is not a defence of fuel duty, it is clearly too high, just a reflection on the nature of capitalism. The suppliers know what we are willing to pay (albeit under duress), and therefore have little incentive not to increase the prce of their product as duty is lowered...

Of course doing something sensible like linking the price before duty a supplier is allowed to charge to the price of crude would be illegal under free market rules. Without this I would rather the Government got my money than Shell, however badly they spend it!!

96

I would prefer tp only pay VAT on the cost of the fuel and not the government tax.

Taxing tax is rather stealthy wouldn/,t you agree. I'm sure that with today's computer technology (obviously not those computeres developed for the government like th Health system) that would be possible.

Then the government would get the proceeds on the rise due to oil prices.

85 and 90#

Onlywayup. Nice one. To quote from Dad's Army "they don't like it up em".

By the way Mikepko "QED"

or don't tell me Evan Davis is anothe one of the BBC's Labour leaning journos

96# the method of fuel taxation hasn't been introduced under Labour its been the same for Donkeys years in terms of VAT on Fuel Duty (another oversight).

You seem pretty knowledgable with figures Mike, care to tell us the price/litre if the fuel escalator had been kept on?

#59 mikepko. Well Mike their all out today I musnt be to derogatry or they'll pull my post we've got one of them back on the postings.
You wrote " sorry, had much better things to do, ie, out with my high fee earning management consultant wife" Well that really does'nt surprise me someone has to be high fee earning for you to have the time type 16 posts on this blog today.
I see in 71 you give us a day to day window into the life of mikepko, with out wanting to be rude it sounds pretty boring stuff. Especially as you have your own business and you say your wife is a high earning management consultant. Being as you live so frugaly what on earth possessed you to go out for coffee you could have saved a few pounds by making a cup at home.
You say you remember the winter of discontent well I do as well and it was bad and it took Neil Kinnock to sort out the miscreants responsible, I also remember the eighties and nineties when interest rates were rocketing and thousands of people were made homeless ,businesses were going to the wall at a rate of knots, thousands were out of work and appearing on TV on a daily basis telling how they had applied for forty or sixty jobs with no success, highly qualified people applying for work road sweeping and on the bins, I remember yougsters hanging around on streetcorners, no work so they would steal cars go joy riding then set fire to them out of sheer boredom I remember Lamont telling us that unemployment was a price woth paying, and I remember 25% Vat.
I dont remember seeing anything to even compare with those events in the last eleven years, I have heard so called experts on TV over the last eleven years telling us how Gordon Brown has got it wrong and how Tony Blair was confronting another disaster but none of it came to fruition, they came out as the ones who were right.
Please dont give me any guff about the war ,thats a question of what we each think and I also remember that the conservatives were more Gung Ho! about going to war than labour. people in this country now are better off than they have been since I can remember and I'm knocking on a bit, look around better homes better cars better dressed better schools hospitals more nurses doctors and policemen minimum wage free Tv free bus passes and winter fuel allowance, I could go on but you dont want to hear it or you will deny it with some glib remark. the only problems we have in this country is the same as every other country and thats the massive increase in fuel and also in food prices neither has anything to do with the government.one rather ridiculous remarked about eat or heat absolute rubbish we are constantly being told that we eat to much and were all to fat, crazy.