Lies, damned lies, and - Government Inflation Figures

Inflation has been much in the news recently. It will probably feature frequently enough it the months and years to come. It is of course an official government measure despite it’s (probably intending to) sounding like it could be done by Which. The Consumer Price Index (CPI), Apparently annual inflation – the Government’s target measure – was up from 2.5% in March to 3.0% in April.

Not all that much one might imagine. And what is inflation anyway? Inflation is rising prices and costs. Anything that puts up a cost, such as an increase in road tax, or the cost of electricity, or the cost of your mortgage. Effectively it means your money is worth slightly less. You can also get the reverse.

So an accurate measure of inflation really tells you something about what is going on in the economy. The only trouble is the government figures are effectively a lie.

In almost standard New-Labour operating rules the measure and the target have become all important. Reality seems to come a poor second. They are basically fiddling the figures, like they do with ‘A’ level passes and it seems, almost everything else.

The official measure of inflation depends on what particular prices and costs are being officially kept track of. If they aren’t being measured then they don’t contribute to official inflation figures. If you only kept track of the price of video recorders and Ladas for instance inflation would probably be pretty low, maybe falling.

The real inflation experienced by us all in our daily lives bears little resemblance to what the New-Labour amusingly attempt to claim are accurate figures. I expect they will have arguments marshalled to justify why they leave some things out and measure others, probably almost as good as those Gordon Brown used to deny the promised referendum on the Lisbon treaty.

As disposable incomes become squeezed, people are increasingly forced to limit their spending to essentials like food, energy, housing. These are the things going up the most steeply. As our spending shifts more towards “non-discretionary” items and services our experience of inflation also get worse. If you spend a larger portion of your income on energy bills, for example, you will then also experience a much higher rate of inflation.

The index is also biased towards relatively cheaper goods like clothing, CD players, etc. rather than more expensive services like transport and childcare.

Who cares how much a new flat screen TV costs when they can put the purchase off, you have to buy groceries and have the energy to cook them. You may not be able to avoid paying for child care if you want to work. You need petrol to get to work. The rate of inflation as experienced by many households in the UK is probably multiple times more than the official figure.

Probably the CPI's worst omission is that it doesn’t factor in domestic costs like council tax and mortgage interest. There will not be many people who’s council tax has not risen well over inflation over the past 10 years.

Oh – and if you try to save for a rainy day inflation slowly (or maybe not so slowly) eats into your savings.

At just 2% it will reduce the value of £5,000 put away to £4,712 after just 3 years and that's with inflation of 2%. Imagine what's happening to your savings if your personal inflation rate is running at 5%, or even 10%. If the return you are getting on your money is less than the inflation you experience you might as well spend it all now because it will have less buying power later.

Social Care for elderly in UK set to take a turn for the worst

Gordon brown apparently wants to make social care for the elderly in the UK ‘fairer’. If only that were indeed the case – actually really fairer.

The sad fact is that, based on easily duplicated empirical observation of New-Labour’s efforts to make things ‘fairer’ in other spheres of life, is that ‘fairer’ is New-Labour-speak for, crap and getting worse, but an enforced equally crap for all treatment. Preferably at the same time suppressing any proof that things could be better. It is unlikely to be any different in this case.

The fact is that because there is never any actual money invested behind these schemes, because they are instead funded directly out of taxes there is looking to be a rather large gap between what is available to fund care in the next 20 years and the numbers requiring it. Oh and Gordon helped make sure the country is brassic by selling off half our Gold reserves when the price was at a historic low. You have got to hand it to the man with the financial acumen…

You can easily understand why this has caught new-Labour and Gordon’s vaunted financial acumen flat footed, after all it was only predictable since they came to office. It’s not like the baby boomer generation is a state secret, or the fact that people get older as time goes by, any more than the names and addresses of every recipient of child benefit is – now…

Diana Death enquiry pushed to £6 Million and rising

It emerges that £6 million has been spent investigating the death of the Princess of Wales – and that is only so far. You can be absolutely sure the final figure will be considerably more than that .

Why? Largely because one sad grieving old man, being fed what people think he wants to hear by people who can collect money from him, plus some fully paid up members of the tinfoil hat squad, will never accept an outcome that does not fit in with their pre conceived conspiracy theories.

No matter how many enquiries, investigations, whatever, they will not be satisfied with the truth they will only be satisfied with what they want to hear, what they sadly imagine to be the truth.

Any reasonable person can not escape the fact that this junket has gone on long enough – far too long and spent far too much taxpayer’s money.

No body with a realistic understanding of the world can imagine anyone would plan an assassination like that. That is the stuff of convoluted best selling novels. There were simply too many random factors at play and too many witnesses.

Much of what happened that night was clearly chance resulting from decisions made on the fly by Dodi Fayed, his driver and the random actions of the paparazzi. No one in their right mind would rely on so many random factors coming together to plan for them.

One can empathise with Mr Fayed for thinking the way he does and he may have some excuse.

He employed the driver, his beloved son made many of the key decisions that lead to the accident. He will be desperate to believe it was anyone or anything, other than himself, or his son that may have been responsible for this sad accident.

His idea of the way Royal families behave may be influenced by how certain middle eastern royal families who actually govern their countries do react and judge their honour. It would be understandable if a grieving old man, a man who’s understanding of the way some things work in the UK may be less than clear, were to project what he is familiar with, his expectations, on another princess.

With the best will in the world it is difficult to equate the plain speaking Prince Philip with King Khalid.

If Mr Fayed wishes to continue to flog a dead horse indefinitely perhaps it would be better done at his own expense rather than the put upon British Taxpayer’s.