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.

Why Gordon axed the 10p tax rate

The current fuss and hot air generated by Gordon Brown’s axing of the 10p tax rate is truly amazing.

The New-Labour rebellion over it for one. These are the same planks that were making like performing seals with much clapping and ‘hear hear’s when their master and then leader in waiting, Gordon Brown, actually did the dirty deed in his last budget as chancellor.

What is also amazing is that most of the pundits and commentators only get half the picture. Gordon Brown may lack bottle to do stuff in the light of day, but he has considerable animal cunning and likes complex double and triple bluffs concealing much of what he does in the hope no one will ever notice, let alone call him on it.

A number of them have noted that the changes coincidentally leave those on low incomes with no children much worse off. They have all the pieces but seem to fail to fit all the pieces of the jigsaw together.

It also shows how few pundits read this blog ;-) as I pointed what follows out at the time.

So - let's set the picture and go over it again. Cue wobbly fade…

Before Gordo’s last budget there was much rending of clothes and gnashing of teeth over ‘Child Poverty’. New Labour had foolishly promised (though why breaking some promises should bother them more than others is not clear) to halve child poverty in Britain by 2010 - and there was no way they were going to meet that target.

Now New-labour were presumably too stupid to realise this is effectively impossible when they set this target. But because of the way the formula is calculated ‘Child Poverty’ is defined by a moving set of goalposts. If you were to somehow magically increase the household incomes of all families, every single one, who fall within the definition at midnight on Sunday - and then re run the figures the poverty line would have increased and you would still have children living in ‘poverty’. You can do the sums for yourself if you care to.

So what has this to do with the abolition of the 10p tax band? Well there is one way of getting a temporary boost to the child poverty figures. It is a matter of percentages. If you take from the really poor who it would take a lot of cash to lift out of actual poverty and give that to those who are not so badly off just below the ‘poverty’ line and only need a little to lift them out, then you can keep the goal posts more-or-less where they are and improve the figures no end. It works especially well if you mostly just take from those poor who have no children.

One suspects it is far from a coincidence that Gordon Brown, knowing he would be judged on New Labour's rash promises on ‘Child Poverty’ decided to do the one thing that could easily improve his figures and might be made to look like a tax cut. Rather like a magician drawing your attention to his right hand whist his left does the real trick.

So it looks suspiciously like just another, albeit particularly dodgy, case of New Labour manipulating figures to pretend to be accomplishing something.

If it is true then it shows the his truly cynical nature, the true depths to which he is willing to sink and puts the lie to any claims he may make to actually care about the poor.

Average UK hospital waits rise under New Labour

Before New Labour came to power in 1997 waits for hospital treatment of more than 18 months were not rare, now no-one waits longer than six months. Hurrah! Yes? – No. Not necessarily.

Sounds good, at first sight though, dosn’t it? The sort of soundbite Gordon Brown would proudly boast of in PMQ, or at conference.

The thing is the average wait has risen from 41 days to 49 days. Only 8 days up you may think. But it is 8 days longer on average.

This is a symptom of New Labour thinking. Everyone must be brought to a level. It’s like education, rather than raise up those getting a worse service they bring down everybody to the lowest level. The lowest common denominator, as they used to say - when such terms were recognised and understood by more people. So practically speaking overall levels of delivery drop.

Just so with waiting lists. To drop that headline figure to 6 months it is true that the really long waits have been drastically cut – but so have the really short ones.

So why did there used to be really short waits?

The question is who prioritised those waits back then? Well Doctors did, based on medical need, the urgency of the case. Now they are prioritised in order to meet state targets. One size fits all. So if you really need a short wait…

As chairman of the British Medical Association's consultants committee, Jonathan Fielden, pointed out "Doctors have been stopped from using their clinical judgement and pushing people through the system when they need to be.”

So the question you need to ask yourself is: Are you actually getting a better service, or just taken for yet another ride…

Babies taken into care more than double since adoption targets set

The UK Government's obsession with targets seems to have allowed the law of unintended consequences lead to a sinister development.

Nu-Lab set targets to be achieved for adoptions in 2000. No doubt in the laudable hope of reducing the number of orphans in state care. Queue music and Pause for rosy picture of a young child opening Christmas presents round a tree with their loving new family.

What happened instead? Well problem teenagers are not all that an attractive prospect for adoption, especially after they have been in the hands of the authorities for a while. Cute Babies on the other hand…

It’s a bit like rescue animals. No so many are willing to take on an infirm old moggy who needs medical attention and pukes up on the carpet at random every now and then, but a cute kitten on the other hand, much easier to find a home for.

Now if you are crudely setting targets like the number of adoptions no bureaucratic mind is going to bother about the profile of the adoptions.

Once you start to measure one particular facet of something everything that is not measured no longer particularly counts and is often then, either ignored, or bent to improve what is measured.

Babies are easier to find homes for, the younger the better. They are what boost the figures and presumably helps performance related civil servant pay – so if you had more of them to shift, then the figures would look even better…

After targets were set in 2000 the figures for very young children being adopted really took off.

By a staggering coincidence, according to figures obtained the Telegraph the total number of children aged under a year taken into council care in England, before being adopted has also rose, by a similar ratio, from 970 in 1996 to 2,120 last year.

These decisions are made in secret closed courts. A mother whose child is taken from her actually commits an offence if she tells anyone outside a tiny, approved list of people. Under the current law, reporters and members of the public are not allowed to attend family court hearings, verify documentary evidence, review evidence or even obtain copies of judgments.

John Hemming, the Liberal Democrat MP for Birmingham Yardley, who wants more openness in family courts, said of the latest adoption figures: "We are seeing a massive growth in the forced removal of newborns from their natural parents. Babies are being taken into care merely to satisfy government adoption targets."

A solicitor, Sarah Harman, who has specialised in family law for nearly 30 years said: "Social services are the only department other than MI5 who undertake their work in complete secrecy. It's not the welfare of the child that is being protected, it is the welfare of social workers. This cannot be justified.

If this is true, as it appears, it is bureaucratic and faceless, but never-the-less actual evil. No individual will ever take responsibility for it, or is ever likely to face anything, other than reward for it.

The Government should address it immediately, seeing as they have inadvertently created the conditions that caused it - and do not appear to have properly monitored the actual outcomes of the changes they introduced.

Government 'barking up wrong tree' with speed cameras

Sometimes the UK Government are so full of sh ‘it’ it just makes you want to weep! (Though this response will be by no means limited to just the UK government)

Paul Smith, of the Safe Speed Road Safety Campaign in the UK, started an e-petition to scrap so-called ‘road safety cameras’ - speed cameras or stealth taxation machines, to the average motorist.

It attracted over 28,000 signatures.

Nu-Labs response? Well basically they are not interested. You can read it all for yourself here.

They spin it like this say (pause for low-key dramatic music) ,“The facts are stark. If a child pedestrian is hit at 30mph they stand an 80% chance of surviving. But if they are hit at 40mph they stand an 80% chance of dying. That is why the Government is committed to achieving appropriate vehicle speeds on the roads as part of its integrated road safety strategy. “

OhKaaay… So how come so many of these ‘tax boxes’ are tucked in places that are difficult to spot on multi carriage 'A' roads and Motorways, where the speed limit is not 30 and where no one would be crossing and there would be no ‘if you hit me at 40’ little girls, or anyone else walking. They look, to the objective observer, rather more as if they have been placed to net as much money as possible.

Another point they are anxious to make is that: ”Safety cameras provide a valuable and cost-effective method of preventing, detecting and enforcing speed and traffic light offences. Very cost effective indeed - more like a massively profitable money spinning scheme! They net the state more than one billion pounds a year. They need to make up the loss of income on tobacco sales from somewhere.

Note the way they gratuitously lump the entirely different traffic light cameras in there because most people don’t have a quarrel with them - so you would have to be a bad irresponsible person who should be ashamed of themselves to object to them and they are ‘safety cameras’ too.

They go on: "Their use is based on solid evidence. All reliable research from around the world clearly demonstrates that cameras reduce speeds and save lives."

Not according to the governments own figures they don’t . Statistics released by the Department for Transport covering 2006 have led to serious questions about just how effective speed cameras’ really are, especially when figures for deaths were separated from serious injury.

Figures released yesterday show a 20 per cent increase in the number of children killed on the UK’s roads. These figures are based on police stats, which have generally dropped. If you look at hospital data it suggests road accident figures may be worse.

Paul Smith is suggesting that the Government have not been sophisticated enough in how they measured and interpreted the data. He believes they have actually been measuring improvement in vehicle safety, believing it to be because of the speed cameras - and lets face it they have a billion reasons to want it to be true.

He said: "The underlying story of the new road casualty figures is that we have received part of the benefit of improved car technology,"

He pointed out we should be seeing a more dramatic casualty reduction, in a different pattern - if the Government’s policies were actually based on accurate theory and really working as advertised.

"Road safety policy appears to have made matters worse because the only gains are in car occupant deaths.

"The problem is pedestrian, child and motorcyclist deaths are up. If the Government's policy was really working all these figures should have been coming down."

All this is being driven by yet another one of the Government's interminable ‘targets’, that end up distorting everything around them. In this case a pledge to reduce the number killed and seriously injured on the roads to 60% of the 1994 to 98 average by 2010.

The poverty line

The children's Charity Barnardo’s is complaining that the UK Government will fail to halve child poverty in Britain by 2010, as promised - unless it spends an extra £3.8bn of taxpayers money over the £1bn already set aside for tax credits in the 2007 budget.

Apparently the charity's research indicates there are one million children who should have been lifted out of deprivation by the end of the decade who will still be in poverty. They warn that while the number of children living in poor families fell slowly but steadily in the late 1990s, progress has now stalled.

Terrible, you may think – Poverty, in Britain, in this day and age. Why is the State failing in this?

Basically because they have set themselves a much more difficult task that it seems.

A household is considered to be officially below the poverty line if they are living on less than 60% of the UK’s median (average) level of household income. These figures look at incomes in Great Britain, after housing costs have been paid. Curiously the EU apparently use the same measure...

So the Poverty line is actually a moving target then. For a start, every time interest rates go up a few more people slip below this poverty line.

Let's conduct a thought experiment - Imagine you were to take every single household, that is officially poor by this definition and were to supplement their income, so it that was £1 above the ‘poverty line’.

At the end of the exercise, when you re-did your sums, you would almost certainly find that you had only actually reduced poverty by a tiny amount and that the official poverty line had become slightly higher.

You would probably have to repeat the process quite a number of times before you had evened out household incomes enough for this measure to show a significant drop off.

Another problem with this measure of poverty is that by redistributing benefits, or services away from the very poorest (who are so far below the poverty line they are likely to stay poor anyway) to those just below the poverty line (who have the greatest chance of being moved over the line), politicians can reduce the poverty rate - Hurrah! - even while deepening the deprivation of the worst off - Oh!

So now you may have an inkling as to at least one possible reason why Chancellor Gordon Brown decided to reduce the basic rate of income tax from 22% to 20% but extended the new basic rate to cover the old 10% Starter rate, more than doubling taxation on the first £2000 of taxable income in the last budget - Busted!