Liberal Democrat Shadow Chancellor, Susan Kramer, has reacted to news from the Office for National Statistics that food prices saw the biggest increase for three years in the year to March:
The Brexit squeeze of a falling pound and rising import costs is hitting families across Britain, with higher prices in the shops denting incomes and leaving us all poorer.
This is deeply worrying news for our economy, which has been propped up by consumer spending.
The Government must urgently act to reverse this growing squeeze on living standards.
The best way to protect British consumers and businesses would be to change course on Brexit and fight to stay in the Single Market.
If Theresa May chooses to plough ahead with a hard Brexit, our declining living standards will be on her watch and her head. You can’t have a hard Brexit and a strong economy.
Food and drink prices rose by 1.2% and overall consumer inflation remained at 2.3% over the three year period. Meanwhile wage growth is expected to slow, leaving people worse off in real terms.
The figures come as British retailers suffer a third consecutive month of falling sales, with takings down 1% compared to March last year.
* Paul Walter is a Liberal Democrat activist and member of the Liberal Democrat Voice team. He blogs at Liberal Burblings.
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15 Comments
You can’t have a hard Brexit and a strong economy.
Depends on what you mean by a “strong economy”. Brexit seems to be doing what we expected, so the question may not be how do we reverse it, but how might we gain from it. I suggest Brexit provides an ideal opportunity to downsize and move to a more sustainable economy and society ie. roll out the green agenda!
Inflation at these levels – and they are low levels – isn’t going to make much difference to anyone. They are pretty much the same level as America and many EU countries. If we could guarantee inflation staying at – or near – these rates I don’t think many people would complain.
Much of it is caused by the doubling of oil prices from January 2016 until today. We are still waiting for Armageddon, the end of Civilization, etc? Now that Article 50 is in what`s the next date?
Inflation has been much higher than this whilst in both the Common Market and the EU. Inflation in the last few years has been historically low, some would argue too low despite the devaluation of the pound through things like QE. Inflation goes up and down all the time. It was up to 10% in 1992-1993. In the early 80s it was well over 10% and was as high 25% for brief periods from 1971 to 1976.
Inflation is not great for consumers, but it really isn’t that high at the moment
Glenn and Malc,
” isn’t going to make much difference to anyone. ”
How wrong can you be. When your poised at the edge of a cliff shuffling a few millimetres can have you falling along way. I think you both fail to realise how precarious many of your fellow citizens lives are. The number stood at the edge of the cliff is frankly shocking and a small drop in purchasing power can soon have many plummeting to financial ruin. So to clarify while a small change may not be noticed by you, you can’t claim it won’t have an affect on those already struggling.
Would like to see nice to see the brave Brexiteers all out in denial mode. I suspect we will see much more of this, as the black knight said “‘Tis but a flesh wound”; should be the motto of the brave Brexiteers.
Frankie.
Inflation was much higher on joining the Common Market in 1971, much higher on the referendum in the first referendum, much higher throughout the 1980s and much higher on joining the EU 1993. It was higher three years ago. My point being that inflation goes up or down all the time and at the moment it is actually fairly low. Although it would probably be better for consumers if it was a little lower, given pay freezes. We could actually do things like reduce VAT or fuel duties and various puritan taxes to alleviate some of the rises, thus restoring consumer confidence.
Malc/William/Glenn. Having lost my job because sterling plunged in value after June 23, forgive me for not sharing your rosy view that no one’s suffered yet.
‘We could actually do things like reduce VAT or fuel duties and various puritan taxes ‘
Which public services would you cut to offset the drop in revenue?
CassieB.
I’m very sorry to here that and I hope things pick up for you soon.
My view is that if you cut VAT and puritan taxes, the extra sales would generate more revenue. For instance pubs would not being closing at the rate they are if prices at the bar were able to compete with supermarkets, lower fuel duties would help haulage companies and would lower prices by lowering overheads. It would do what advocates of low income tax claim it does but doesn’t in reality. It would reach more people. I base this on what happens when shops have sales and on the growth of low cost supermarkets. I think direct Tax on high earnings works better than indirect taxation because thousands of people buying lots of things generates more consumerism than one wealthy person spending a bit more on higher end goods. I think puritan taxes are just busy body attempts to control public morals in displays of political piety and I think VAT is part of an attempt to shift the burden of tax away from the wealthy. This is why the Tories tend to push VAT up and cut income tax.
Cassie B
I am also very sorry that you lost your job. Good luck in finding a new one.
It is scant relief I know, but great constitutional change does inevitably involve business changes.
Our argument is that Brexit will bring very significant economic benefits and I hope that you may one day be a beneficiary. By and large our economy is going extremely well and some exporters can hardly deal with increasing demand.
Not what you want to hear!
“Brexit will bring very significant economic benefits” to whom? Lobbyists and trade negotiators will make a killing. A few developers in London perhaps. The rest of us are stuffed. People that do real jobs are losing out and will lose out. The government is totally shambolic – it took almost a year just to get the article 50 letter out.
Pubs are closing because rents and rates are too high and the owners can make more money by redeveloping them for housing or as local supermarkets. The measures suggested have been tried before. The problem is that wages have been suppressed by an oversupply of labour. People have become bored and disillusioned by the familiarity of the policies offered by the governing class and want a change of direction even if it is risky. They are also sickened by the hypocrisy of the leftist elite who for example want everyone else’s children to go to comprehensive schools while they send their own to the remaining grammar schools or more likely fee paying schools which was illustrated by Nick Robinson’s interview with the rather naïve Angela Rayner this morning. Since the Liberal Democrats seem to be offering similar policies it is not surprising that their poll ratings are improving at a snail’s pace. The policies might be realistic but like France under King Louis Philippe the public are bored. They want something exciting. It is time for a change and the Conservatives have realised it.
“You can’t have a hard Brexit and a strong economy.”
I’d say there is more scope for what we can and can’t have than you might imagine. The GDP of the UK is $38,800 pa per capita. or £31,000 each. If it were all shared out equally. But of course it isn’t. Even if Brexit were to cause a 10% hit to this figure ( a very much worse case scenario) there’s still plenty of scope for us all to live well on say a GDP of £28,000 pa. per capita.
There’s really no reason to think that there will be any real reduction. But maybe there won’t be quite the same growth? The rest of the EU isn’t really growing anyway and the growth in the UK has been ultra sluggish since the 2008 GFC.
The Lib Dems need to think about what they’ll say at the next election when we’ll all know what the exit terms will be. How many votes are there to be gained by saying that those terms have been far to hard, that Brexit was a disaster and that we’re all doomed?
@ CassieB,
I’m sorry to hear that you lost your job and I know people lose jobs all the time through no fault of their own. I can understand workers might lose jobs if the pound rises and their company becomes less competitive against overseas rivals but I can’t see how a fall in the pounds value can be detrimental to job prospects.
Multinational Companies are always looking to relocate their operations from high cost areas to lower cost areas. The fall in the pound’s value does have some downsides. When we go abroad on holiday or when we wish to purchase imports. But there are upsides too.
Susan Kramer has called for whistleblowers to be paid: Times Business News page 50 (£).