If you have had the somewhat dubious pleasure of visiting your local supermarket recently, you will probably have noticed many people wandering around with a vague, incredulous look on their face as they try to comprehend why something that cost £0.75 last week now costs £1.35.
In ASDA, the price of ‘Everyday Coffee’ has gone up from £1.37 to £2.28, a rise of about 80% in just one week!
I recently carried out an analysis of my grocery bills over the last six months or so which I suppose, in the view of some people at least makes me a fairly sad individual.On the other hand, it does mean that I am perhaps more aware than some of just how much prices have increased over the last three or four months, particularly in supermarkets where most people expect to get a better deal than anywhere else.
Having looked at the figures, it transpires that in fact my grocery bill has gone up by more than 20% over the last 12 weeks, an unprecedented rise in the cost of items that are more or less essential to everyday living. Whilst I appreciate that not everyone may go into the minutiae of pricing policy, it must nevertheless be obvious to everybody that food prices in particular are going up and up.
With perfect timing and in exquisite detail, almost as if to emphasise the fact that these times require overall severity and that we are all supposed to suffer, the Governor of the Bank of England recently made a statement confirming that inflation would continue to rise probably into next year and the year after. Inflation, you will remember is the difference between what money was worth yesterday and what it is worth today. To put it another way, it is the measure by which money in your pocket devalues in its buying power over a period of time and by a specified percentage.
Then, almost as if not to be left out, the Department of Trade and Industry together with the Treasury announced that investment in the UK was declining. Recent figures have shown that in the first quarter of 2011, the economy grew by 0.5%; big deal. Unfortunately, this is not spectacularly good news at all it has done is to cancel out the -0.5% contraction of the economy in the previous quarter. In other words, over the last six months the UK economy has flat-lined.
Whilst this game of fiscal ping-pong has been going on, inflation meanwhile has been going up, and seemingly oblivious to the changes in economic production. You may have noticed, we have also had a rise in the VAT rate which, contrary to what the government said, has in fact put up the price of everything.
Petrol now costs more than champagne, gas and electricity prices are the highest anyone can ever remember, the water companies are already the most expensive in Europe are planning another increase this year and the Governor of the Bank of England goes on writing letters to the Chancellor, explaining why inflation is beyond a level that was initially expected.
For the average family or individual, none of the actual figures are important. What is important is the fact that a grocery bill that was once £30, £70, £100, or in some cases £200 per week has now gone up by 30%. Much of this is due to the rise in VAT, not least because the increase in VAT leads to higher transport costs which are then passed directly to the customer.
Much of it is due to the supermarkets adding their own increase in profit whilst hiding it behind the VAT rise.
If anybody ever needed any proof of this, you need only look at the quarterly figures reported by every supermarket chain. The figures always show an increase in profit overall, never a loss.
TheOpinionSite.org believes that the government is completely oblivious to what ordinary people are facing. All we ever hear from Downing Street and Whitehall is the need for austerity and the endlessly repeated statement that the cuts are inevitable and unavoidable.
The only person who seems to have been telling any measure of the truth at all is the Business Secretary, Vince Cable who rather bravely made the point in an interview that we are all in for a most unpleasant experience over the next 12 to 18 months.
I think what he actually meant was that the effect of the cuts had not been noticed yet. This is a small distinction but possibly an important one as if it is true that the cuts have not yet started in earnest, when they do, the situation is going to become much, much worse than any of us had anticipated.
In a recent report from the Institute of Fiscal Studies, it became very clear that despite the efforts of the previous government to take people out of poverty, in reality the rich were still getting richer and the poor were still losing out big time. This has been the law of economics ever since somebody invented money as the richer you are, the more money you are likely to attract into your life.
Successive governments over the years have tried to equalise the situation by taxing the rich and claiming that the extra money received by the government will somehow be distributed amongst the poor. This is of course economic nonsense as any redistribution would amount to about £0.15p per person; hardly an amount that can make any real difference.
The reality is that any government of the day, in this case the Coalition, needs to understand that increasing VAT to 20% may be convenient from the point of view of an administration but it is crippling to those on low or fixed incomes. The Chancellor of the Exchequer, George Osborne made a great show and a great deal of noise in proclaiming that the wealthiest people in the country would end up paying more in VAT than the poorest.
Whilst in simple cash terms this may be true, it is equally true that as a percentage of income received, the poor inevitably end up paying a much greater proportion of that income than those who are better off. If somebody who owns £100,000 a year end up paying an extra £20 a week in VAT, they probably aren’t given notice it very much. On the other hand, someone who is on Job Seekers Allowance of just over £60 a week is going to notice an increase of £5 per week in VAT very much more.
Supermarket prices in Britain are some of the highest in Europe, despite the fact that most foods do not attract VAT. It is equally true that supermarket profits in Britain are also some of the highest in Europe.
In plain English, shoppers in Britain are being ripped off right left and centre because they do not feel that there is an alternative to going into Tesco or Asda. Corner shops are even more expensive and therefore provide an unrealistic alternative to being sucked into the vortex of the supermarkets where prices seem to increase by 10% every week and for no apparent reason.
Britain has one of the lowest minimum wages in the EU and also some of the highest prices. Britain has the lowest benefits in the EU and no provision for those on low and fixed incomes to meet the increase in prices that seem to greet every visitor to a supermarket. The government doesn’t care, is not and has not ever been interested in poor people, fails miserably to provide jobs and refuses to increase the minimum wage or benefits to anything meaningful.
Whilst happy to spend £12 billion on overseas aid, the government refuses to increase the already painfully low level of benefit reluctantly given to people who simply cannot find a job but who are willing to work. Those citizens who are over 50 years old stand virtually no chance at all of finding any employment and those who just left school or picked up an often meaningless degree at university are no better off.
With a pitiful minimum wage, unpaid internships where people work for nothing, 2,500 of which are offered by the government every year, a pitiful lack of employment for those who are willing to work combined with rampant age discrimination, the next 12 or 18 months are going to be very difficult indeed for an ever increasing number of people.
Those in power, particularly those in the Cabinet, have no answer. They have no answer because there are not interested and to be frank, why should they be? After all, 18 out of the top 22 members of the Cabinet are millionaires?
Unemployment is set to rise and so is the number of people claiming Job Seekers Allowance; in fact in the last month that number has gone up by 12,500. There are virtually no full-time jobs available to anybody over 50 years old and the number of part-time jobs, being cheaper for employers, is increasing daily. There is no prospect of any of this changing soon and it is likely that by the end of this year the government will have failed miserably to provide the jobs that are necessary.
It is the responsibility of the unemployed to try hard to find employment but, whether the government likes it or not, those people that it is so keen to criticise cannot help themselves if the jobs are simply not available. There is no help at the Job Centre, most of the training courses that are mandatory are also useless and totally ineffective, the education system is deficient and the government don’t care.
TheOpinionSite.org believes that people are only too willing to help themselves given half a chance to do so. It is up to the government to provide change and to make the opportunities available. The last government failed to do so and it looks very much as if the current administration is unlikely to do any better.
The rich will continue to get richer and the poor will continue to suffer. It is the same now as it has been for the last 500 years in Britain and to be frank, there is no reason why either fiscally or mathematically things are likely to change any time soon.
A sad situation indeed for a country that claims to be a world leader yet whose philosophy is still essentially mediaeval in nature. Do not expect any changes any time soon for if you do, you are likely to be sadly and depressingly disappointed.