As a child, I was just about old enough to remember the era of high inflation in the late 1970s and how painful it was to get inflation out of the system in the early 1980s. In the forty years since, we’ve become accustomed to low inflation. Sadly, global events have created global inflation, including a huge rise in wholesale gas prices. Putin’s invasion of Ukraine following on from the Covid-19 pandemic has caused a strain on the cost of living for the world and the impact on global food supply may have truly devastating consequences for poorer nations.
For western countries, the squeeze on household finances and the subsequent damage that can do to our economies is concerning. Some Economists predict that current high inflation will be a one-year blip for 2022 with much lower levels returning next year, with well-run economies like our own being resilient and not too badly damaged, with a return to long-term sustainable growth. While no government anywhere can sensibly just stop high inflation in the current global circumstances, it is important to avoid any rash populist policies that would make inflation become engrained in our economy. We need to learn the lessons of the 1970s and not repeat them as some would do, creating even more pain for longer.
Keeping our economy going to get us through this high-inflation year and ensuring the least well-off are supported, while investing for our long-term economic security is the right approach. This is what our own and many other national governments are doing.
While we all feel a squeeze on disposable incomes, the least well-off who are the most impacted are also being the most assisted. Just two examples from many policies to help, include that from this July, 30 million of us will be up to £330 a year better off thanks to the major raising of the threshold that National Insurance becomes payable at. There is also a £1,000 effective tax cut for nearly two million of the lowest income families through the cut to the Universal Credit taper and increases to work allowances.
Councillor Duncan Crow, Leader of Crawley Borough Council Conservative Group
25th May 2022
