Wat,
They didn't use CPI in the 1970s - they used RPI and inflation is 4.6% according to the RPI.
Margaret Thatcher's government initially had to raise taxes - one of the factors that led to the famous letter by 364 economists. There's a difference between having to raise taxes in the short term to balance the books, and cutting (or restricting the growth of - for this was all that Margaret Thatcher actually did) spending and thus reducing taxes in the medium to long term.
I'm not the biggest fan of Cameron, but I think you're not being entirely fair.
Wat
It's all well and good you sophisticated economists telling me that inflation has "soared" to 3 or 4 % on the CPI or the RPI or even perhaps the RIP
What I notice is that:
petrol costs are up 20% or more
electricity and gas are up over 10%
food is up by, on average, 11%
My mother in law tells me that a loaf of bread is 50% more than it was a year ago
The Times today says the average family is spending £1100 a year more on the weekly shop, so God only knows what Mrs Tyler's weekly Fortnum's trip
This 3 or 4% is bollocks, isn't it?
John
Wat,
Do we really need to tell you the glaring error in this? ...3.8% is not disastrous by 70s standards...
Didn't Brown fiddle this figure, effectively halving it compared to previous CPI comparable calculations? The figure is nearer 8% than 4% and rising still.
HJ
OK let's be fair to Cameron.
Cameron's spending/tax plans still commit the Conservatives to a continuation of Labour spending for the first 4 years of a Conservative administration. He didn't resile from this in his Today interview this morning. In other words, the possible new increase in tax he was talking about is on top of the increases to fund the (Labour/Conservative) increases in spending. The fatuous policy of "sharing" of growth in GDP between the government and the taxpayer implies (arithmetically and assuming a 50/50 sharing) an increase in the proportion GDP taken by the government.
On the BBC1 10:00 News Osborne confirmed that tax increases might be necessary to "maintain stability": he didn't mention that he is already committed to "maintaining stability" by taxing and spending a la Brown. There is no commitment to reducing tax: there is no commitment to reducing spending. David Cameron's Conservatives are Labour with better tailors, better grammar and more attractive wives: their fiscal policies are identical.
Just heard on BBC TV that maybe our flexible labour market will help us now: migrants from EU countries will go home (indeed some Poles have already done that, but there is a different cause: a better economy at home), UK workers will have their overtime cut, some part-timers will give up work. So unemployment figures will not rise all that much, but the total spending power is going to be down - isn't that a recession?
Another reason to abandon the Cameroonites - there answer will never involve cutting the public sector, let alone cutting public sector growth; the most you can hope for is big business corporatism which will temporarily fix the situation, then leave us in squalor when they go somewhere where theres more money to be made, such as China.
The man schemes and schemes bleating what we want to hear but having very little real substance - had the Torys promised tax cuts in a manifesto would they really keep to it now?
Inflation 3.8 % ? Wat I am surprised you believe that when it excludes luxuries like council tax, housing etc but includes essentials like DVDs.
Bollocks is exactly the right word, Dr Crippen. Last November my monthly payments for gas and electricity were £79 and £55 respectively. Now it’s £150 for gas and £70 for electricity. Just thrown my blood-pressure monitor out of the window, its readings too are showing the effects of inflation.
Doc,
Nothing sums up inflation monitoring by the government like the DailyMash:
http://www.thedailymash.co.uk/ne...et-20080318804/
I think the picture is a lot scarier than many people make out - you could probably double inflation if monitored properly.
As a Telegraph reader commented, if Cameron does not wish to abolish the NHS and privatise schools he has little option but to raise taxes. Regrettably the burden will fall on middle and lower income taxpayers, not on those earning six-figure salaries such as MPs (if we include their expenses) and other members of the TPA's public sector rich list.
Umbongo,
I don't think Cameron has committed himself to Labour spending plans for four years.
When he talked about 'sharing" the proceeds of growth, he didn't refer to a 50:50 split. He didn't say what the split would be. Margaret Thatcher never actually cut public spending, she only restricted its growth. What Cameron is saying isn't necessarily different.
The deficit is ballooning - very difficult to cut taxes in these circumstances (unfortunately).
Cutting taxes is precisely what we need. Nathan Lewis in his book
http://www.nibiruresearch.com/
demonstrates that practically all of the economic miracles of the last century were achieved by slashing taxes and introducing a sound money policy. Even Putin has recognised that. The real Stalinists are over here.
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