Grinning idiots: Rishi Sunak and Jeremy Hunt, who falsely claimed that cutting inflation is cutting tax and giving people more money to spend, are now falsely claiming that they have managed to cut inflation down to their target. They did nothing.
A friend of This Writer emailed me today to forward a communication he had received from the Conservative government – saying it has achieved its aim of halving inflation.
It hasn’t.
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Inflation was always going to come down – and some have pointed it out, although I’m not sure where the community note on ‘X’ has gone, that is mentioned in the following post:
🚨Breaking: the Conservatives' post claiming that Rishi Sunak halved inflation has received a community note explaining that he did not, in fact, do that. https://t.co/rSxc4RHcME
The example in the TUC’s post is informative because food inflation is still higher than 10 per cent. Gareth Davies, Exchequer Secretary to the Treasury, was called out on it by Susanna Reid on Good Morning Britain:
Left: Gareth Davies, "Headline inflation has gone down to 4.6%"
Right: Gareth Davies, "Food price inflation is 10.1%"
Susanna Reid calls him out, "Food bills are still going up by more than 10%.. Food bills are unaffordable.. People are still choosing between heating and… pic.twitter.com/rtx8yWpgnc
The Tories are trumpeting a change they have done nothing to achieve, that is not helping you at all. Don’t be fooled.
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This is going to be part one of a series because Rishi Sunak turned out to be very long-winded, for such a short guy.
I was hoping to be able to run a quick video summary of his speech at the Conservative Propaganda Carnival – I mean, Party Conference, but… well, watch the clip and you’ll see me explain.
And please bookmark this article, or the clip on YouTube, so you can come back to it and check what he has said against what he does.
Here’s the clip (a new version; the original turned out to have a technical fault):
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Grinning idiots: Rishi Sunak and Jeremy Hunt have both falsely claimed that cutting inflation is cutting tax and giving people more money to spend. THIS IS A LIE.
Both the UK’s prime minister and Chancellor of the Exchequer are economically illiterate and do not know that cutting inflation does not put any money back into the pockets of the poor.
Both Rishi Sunak and Jeremy Hunt have gone on the record, referring to inflation as a tax. It is not.
Either they are lying or they are too stupid to understand that they are wrong.
Cutting inflation does not reduce the amount of money people are having to pay for goods and services – those prices still rise, but just not as fast.
So when this happens…
Sunak on Kuenssberg says he has cut the cost of living/
Does anyone feel better off, or see fuel, mortgage or food costs drop?
I appreciate some commentators refer to inflation as a stealth tax. However Rishi is not alluding to this.
He’s claiming that reducing inflation is a tax cut. It is not. People are not better off with a reduction in inflation. Prices still rise just by not as much.
(The point is that inflation may act as a tax when it increases but the amount of money you are paying does not reduce when inflation does, as it would if a tax was cut.)
The chancellor: "If we halve inflation, thats not a 1p in the pound tax cut, thats 5 pence in the pound boost to their income"
This is economically illiterate. Reducing inflation doesn't boost incomes, it means prices are still rising, just slower. pic.twitter.com/tSw11qClDE
Of course the other branch of this is the claim that the Conservatives have actually done any work to reduce inflation. They haven’t.
Inflation was always going to come down from the historic highs it hit a year or so ago. Those were caused by situations in foreign countries that caused shortages of energy and food, raising their prices.
Those shortages have now largely been resolved, but the price rises have been cemented into our lives. The reason inflation has fallen is that it is a current figure, representing the amount prices have risen over a particular length of time. After a year, price rises drop off all the current inflation figures.
So: inflation is not a tax and its fall does not put more money in your pocket, and the Conservatives have done nothing to bring it down anyway. Rishi Sunak and Jeremy Hunt have lied through their teeth at you. This is not an auspicious start to the Tory Propaganda Carnival – I mean, Party Conference.
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Rishi Sunak: he likes money but he doesn’t understand it. By giving benefit money to the rich in tax cuts, he is cutting away the foundations of the UK’s economy. How will you be able to afford anything?
Once again, the Tories are threatening defenceless benefit claimants in their endless campaign to bribe donation money from rich benefactors.
More people looking for work relieves pressure on employers to increase wages, because jobseekers will undercut each other in their desperation – and I use that word advisedly – to get a regular wage packet.
Now Sunak is threatening more than six million Universal Credit claimants – most of whom are in work – with an effective cut in payments if he decides to make the annual benefit increase next April lower than the rate of inflation.
The apparent reason is to fund another tax cut for the very richest, in time for the next general election; he’s buying support where he wants it by harming those he doesn’t ever expect to help him.
Here’s the Mirror:
the Prime Minister refused to commit to inflation-proof benefit rises next year, arguing that payments had already gone up by a “huge amount”.
For clarity, it doesn’t matter how much payments have already increased. Inflation is always a measure of how fast prices are rising. If the inflation rate slows, prices are still rising, only more slowly. Increasing benefits at a rate lower than inflation means millions of working people and benefit claimants will not be able to afford basic necessities.
Chancellor Jeremy Hunt is thought to be considering a real-terms cut this autumn. Payments usually rise each April by the inflation figure of the previous September – expected to be 6.9%. But the Government is looking at a lower figure, leaving 6.1 million on UC worse off.
A rise 1% below inflation would result in a low-income working couple with two children losing £220. Asked if he could guarantee benefits continue to rise with inflation, Mr Sunak declined but insisted he would “make sure we look after the most vulnerable”.
That has to be a lie; Sunak has already attacked “the most vulnerable” with his plan to push long-term sick and disabled people off benefits.
Be in no doubt: this is an attack on you.
The fear is that, by buying support from the rich, Sunak will be able to rely on their influence to persuade – or coerce – you or people like you into supporting yet another godawful Tory election win.
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This is fine: the image above was originally about climate change but it may be applied equally well to Rishi Sunak’s attitude to the economy. Political policy in the UK for the past 40 years and more has been to impoverish you, together with all the poor people who voted for him and his ilk, thereby allowing it to happen.
All the Tory talk about getting inflation down seems to have confused some people who have failed to consider that high inflation may actually be Conservative government policy.
Look at the usually-excellent Simon Wren-Lewis’s latest Mainly Macropiece, in which he takes issue with left-wing opinions about his current diagnosis of the inflation problem.
He reckons the answer is for private sector wage rises to come down, probably by way of reducing economic demand which will lead to a reduction in the workforce – and, thereby, a recession. This opinion appears to be shared with the Bank of England, whose continual interest rate hikes seem to be an attempt to force the UK’s economy to go backwards.
The problem with that is simple: ordinary working- and even some middle-class people are struggling to make ends meet. Many simply can’t and are going into debt. His solution to the inflation problem will bake that inability to afford the cost of living into the UK economy.
With the Tory government lying to us that workers’ wages are the cause of high inflation and the Bank of England doing as described above, there seems to be only one logical conclusion to draw:
High inflation is a Conservative government policy. It is intended to drive the UK’s lower-paid citizens deep into poverty so you cannot afford the necessities of life.
Just roll that around your mind for a moment.
Think about the real causes of inflation: huge increases in the prices of energy and food, and huge increases in the salaries of FTSE100 executives.
The government could, in theory, neutralise these inflationary pressures through taxation – but the theory fails in practice: as Professor Wren-Lewis notes, the energy firms are multi-national corporations whose profits are received overseas, so there is nothing the government can do about them.
Looking back through history, we see that the reason overseas shareholders have been able to take control of our formerly-nationalised utility firms (energy isn’t the only subject area to have been treated this way, of course; water springs instantly to mind) is privatisation.
The answer should be re-nationalisation – but the Tory government (and also Keir Starmer’s STP – Substitute Tory Party) won’t countenance that; it is against their ideology. This indicates, again, that high inflation that drives you into poverty is a political choice. Rishi Sunak and Keir Starmer want you to starve.
In the private sector, we see that the salaries of FTSE100 executives have risen by an average of 16 per cent in the last year alone, despite the fact that there has been no real growth in production in the last 15 years since the Great Recession. The money for their pay rise has to come from somewhere and the logical source is the pay packets of employees; they are taking the rises that should go to you.
That’s if they haven’t increased the prices of their goods or services, of course. If they have then they are still taking the rises that should go to you, while also increasing prices so you can’t afford what your employer sells.
The answer – the way to stop this irresponsible upward drain of corporate funds into executive bank accounts – is to tax executive pay at a rate high enough to make this practice unviable. Again, both Rishi Sunak’s Tories and Keir Starmer’s Tories have refused to do this so – again – we must conclude that the executive wage inflation that puts us all into poverty is a political choice.
Professor Wren-Lewis rightly points out that, where employees have won wage increases intended to match inflation caused mainly by high energy prices, their employers have put prices up; this indicates that shifting the real-terms wage cut onto the profits of other firms won’t work and just generates more inflation.
Professor Wren-Lewis goes on to discuss the reason real wages in the UK have not grown in the last 15 years. As already mentioned above, besides the energy and food price hikes, it is the fact that productivity growth has been extremely weak. There have also been two large devaluations of the Pound.
The low productivity – and one of the depreciations – were caused by Brexit. This is another political policy of the Conservative government that is also supported by Keir Starmer’s STP and may therefore be seen as further proof that the party of government (and that of Opposition) intends to impoverish you as a matter of policy.
Brexit also makes causing a recession more attractive to the government and the party that wants to form a government. Neither of them want inflation to continue running rampant forever; it would eventually wipe out the gains they have made for their very rich friends, so they’ll want to bring it down.
The way to do that, according to Prof Wren-Lewis, is to reduce the demand for goods produced by most firms, as this will lead to a reduced demand for labour; firms then lay off workers, meaning more people are seeking employment, meaning in turn that jobseekers will be more likely to accept a job that pays lower wages.
Before Brexit, politicians could always rely on an influx of cheap labour from Europe. That isn’t available now, so they consider recession to be the only alternative. Remember: their future is safe.
Demand is already coming down because people simply can’t afford to buy as much as they used to, due to the real-terms wage cuts they have suffered. The Bank of England’s interest rate rises are hammering that change home.
We may therefore conclude that recession, job losses, further deprivation and misery are all policy points of the Conservative government, and of Keir Starmer’s STP.
Professor Wren-Lewis ends his piece by quoting Bertrand Russell: “Ask yourself only what are the facts, and what is the truth that the facts bear out. Never let yourself be diverted either by what you wish to believe, or by what you think would have beneficent social effects if it were believed.”
Sadly, he fails to follow his own (and Russell’s) advice.
The truth that the facts bear out is that privatisation, executive pay rises, Brexit, austerity (the other driver of the Pound’s depreciation) and interest rate rises are all intended to push the majority of UK citizens into poverty.
Other solutions besides reducing demand by causing a recession and mass unemployment are available – but the low-quality politicians with whom we have accepted that Parliament should be filled are not interested in them; their only concern is filling their own bank accounts.
Our concern must now be to put a stop to this.
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The real cause of inflation: prices have been rising to give chief executives of companies massive, inflation-busting pay rises.
It’s nice that the Tories aren’t even trying to present themselves as electable any more.
They have spent so much time and energy telling us that our wages have been driving inflation up that it is impossible for them to backtrack, now we can see that the real cause is the naked greed of company executives.
Bosses at some of the UK's largest companies have seen a huge jump in their salaries… while employees saw their pay packets outstripped by rising prices.#BBCBreakfastpic.twitter.com/vCJNHCfEzu
And they won’t take the logical steps to rectify the situation. Firstly, they need to legislate to stop the privatised utility firms (especially energy and water) engaging in brazen profiteering because they can always force the government to increase its subsidy to them.
Tories insist on supporting privatisation, meaning they refuse to allow privatised utilities to go back into public ownership and are forced to increase public funding for them whenever the millions and billions they hand to shareholders seem likely to drive them out of business.
Secondly, they need to do as Owen Jones suggests in the following clip:
Bosses getting 16% while workers have been getting real terms pay cuts. As @OwenJones84 says, "who is causing inflation in this country"?
Oh, and at the end the presenter asks, what can we do other than ask them to please to share it around? Owen has a suggestion. #GMBpic.twitter.com/TpaNMOoSNx
Doesn’t it seem strange that, with the UK straining under the biggest taxes we’ve had in 70 or 80 years, the government is refusing to take money from those who are most able to bear that load without suffering any serious harm to their way of life?
So it seems to This Writer that they are actually doing the decent thing (albeit unrepentantly), admitting that they’ve done wrong and – by sticking with the policy – giving up.
They’re as good as saying, “We know we’ve done wrong. We’re going to keep on doing wrong until you remove our ability to do so.”
I, for one, can’t wait to get on with it.
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Keir Starmer and Rachel Reeves: their economic and anti-inflation policies aren’t intended to help working people in the slightest, it seems.
Cast your eyes over the following word salad from Shadow Chancellor Rachel Reeves, and This Writer’s own reply to it:
What are you going to do? You've already said you won't increase wages. And you're not going to make anythng cheaper. And prices are still rising (lower inflation doesn't mean lower prices).
Growing the economy doesn't mean wages will rise – trickle-down economics is a lie.
I call it “word salad” because that’s what it is – a random mixture of words and phrases suggestive of advanced schizophrenia.
Nothing in Rachel Reeves’s post actually means anything. She doesn’t explain how building the UK economy will boost growth, deliver jobs or bring down bills because she either doesn’t know – or knows that it won’t.
Most people are already in work, remember – so delivering more jobs won’t actually help unless they are better-paying jobs, and we already know that Keir Starmer’s Labour is against higher pay rises for working people. Like the Tories, that party is claiming such developments will only speed inflation.
And how does she expect to bring down bills? The cost of everything is still rising at the moment, albeit at a slower speed. Economists say if goods and services became cheaper, that might trigger a recession. So it seems this is not possible.
Making bills cheaper in real terms – as a percentage of household income – is impossible because Reeves will do nothing to increase wages for the lowest-paid workers.
Angela Rayner said much the same when challenged by the BBC’s Sally Nugent:
"Can you tell us exactly what Labour will be doing to bring down inflation faster?"
She mentions getting waiting lists down so more people are work, and paying properly for public services – but these require more spending by the government. Does that mean Labour will tax the people more? Otherwise we’re into another inflationary spiral.
And which people will Labour tax, if it has to? The working poor or the super-rich? Given the number of Labour representatives who are receiving massive donations from the super-rich, I think we all know the answer to that.
Here’s a social media post from “The Labour Party”, highlighting a Sky News article:
Under the Tories, bills for the average household have soared by £350 a month.
Labour’s economic growth mission will increase wages, bring down bills and put money back in your pocket. https://t.co/uMUlt9IP5u
The article itself doesn’t mention anything Keir Starmer’s party would do until its penultimate paragraph, in which – amid the now-familiar nonsense mantra about boosting growth, boosting wages and bringing down bills, Shadow Economic Secretary Tulip Siddiq states:
“If Labour were in power today, we would introduce a proper windfall tax on the huge profits the oil and gas giants are making to help families with the cost of living.
So Starmer’s answer is indeed taxing somebody to keep extra government spending from boosting inflation.
Well, he’d better hope there’s an election soon because otherwise those energy firms will have given away all those profits as shareholder dividends and… Didn’t Starmer already promise not to tax wealth?
Here’s a thought:
Rather than make a big fuss while talking a lot of nonsense, why not have a look around the world at economies that actually work for their people and see what they’re doing right that the UK isn’t?
They could start with Denmark, perhaps:
Strangely Denmark has the Highest Minimum wage in the world but no problems with inflation.
The fact that Keir Starmer’s crowd is not doing that – is actually refusing to consider practical, proven alternatives, suggests that there is no intention to change the situation. not by one iota.
Starmer and his motley crew know you are being hammered by the high cost of living, every day.
We must conclude that it is Labour policy to continue grinding your face into the dirt.
Inflation has dropped to 6.8 per cent – but this is not an endorsement of Conservative government policy.
The Tories have spent months claiming that they cannot pay the money they deserve to public sector workers (including the junior doctors who were on strike over the weekend) because it would worse inflation – but today’s fall comes alongside an increase in average pay.
Looking at the small print, we see that none of this pay rise has gone to people who actually need it; instead it has further fattened the bloated bank accounts of high-paid company executives and other friends of the Conservative government.
So the lie that wages drove up inflation exposed as media announces largest increase in wages and sharpest drop in inflation. Proving the crisis we are still suffering is one of greed of those at the top of society inc the banks energy corps and others.
But that doesn’t matter; wages have increased and inflation still came down. The Tory lie has been exposed as – in the language of Peter Stefanovic – bollocks:
🚨UK News shows🚨
Government Ministers are doing the rounds today suggesting the new inflation figures prove the Prime Ministers decision to impose crappy real terms pay cuts on public sector workers was correct
The clip includes a few other interesting take-outs:
Workers in the UK are £11,000 a year worse-off.
2022 was the worst year for wage growth in almost half a century.
Average real wages in the UK will still be lower in 2026 than they were in 2008.
So it is impossible for public sector wages – or any other wages paid to employees – to have had anything to do with inflation figures.
In fact, according to the extremely non-socialist International Monetary Fund, the largest contributor to Europe’s inflation over the past two years was rising corporate profits cause by companies increasing their prices by more than the costs of imported energy. Look at your own energy bill over the past few years and compare the increases with the costs of energy and you will see the factual accuracy in this.
Increases in private sector wages may increase the price of goods – because companies would factor those rises into their prices.
There is evidence of this in the new figures: strip away the cuts in energy and food costs and core inflation is one per cent higher.
But that doesn’t happen in the public sector where, for example, healthcare is free at the point of use.
And the public sector labour force is only 17 per cent of the total workforce, meaning its pay increases have a lower effect than anything happening with the 83 per cent in the private sector.
Of course, prices are still increasing, meaning that people will blame that on increasing wages and demand another interest rate rise from the Bank of England to curb spending by the little people (you and me, as opposed to the big bosses who have actually received the pay boosts).
I struggle to grasp the point of such a move as it is more likely to cause a recession than stabilise the economy. The precipitous rise in interest rates set by the Bank has not affected inflation at all, and conventional wisdom suggests we will not see the result until 18 months after the first one was imposed. With inflation already coming down of its own accord – as was widely predicted by people like economist Richard Murphy – this could be disastrous.
So when the Tories come out with outrageous nonsense like this…
Great news that inflation has fallen from 7.9% to 6.8% 📉
Halving inflation is our number one priority – and through tough but responsible decisions – we’re on track
… I am glad to see responses that put it into the proper perspective, like this:
Spin ! The news ie inflation is slowing.. Spin Strip away energy & food costs & core inflation is 1% higher. Spin Wages are level with or exceeding inflation. Spin Unpacking the figures shows it only pertains in the higher salary bracket.
Sadly, the message is unlikely to get through to the general public, thanks to the biased priorities of our right-wing social media platforms. Look at the number of views the Tory propaganda has received, in comparison with those collected by Clare’s response.
Finally: at least someone out there can laugh about it. Read this:
Each year, one group of public sector workers achieves a pay settlement that sets the benchmark for union wage negotiators. This year it's the royal family, who got a 45% pay increase.
Sadly for the story, even though the Royals are technically working in the public sector, they are right at the top of it, so their pay rise comes in as equivalent to those of the fatcat company execs.
Still, I don’t see anyone talking about the inflationary effect of this massive increase, so it adds to the evidence that public sector pay does not affect inflation and the Tories have been feeding us bullsh*t since the public sector strikes started, if not before.
Try to remember this amid the barrage of inadequate and misleading reporting by the BBC and the rest of the Tory media.
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The Bank of England: why are you letting a gang of super-rich bankers tell you it’s the pittance you take home in pay that has caused inflation when that is so obviously a lie? What are you going to do about it?
It’s self-explanatory and if you believe the Tories, the right-wing media, the bankers and all the others who have been telling you that wage rises are pushing up inflation, you need to see it. Watch:
The ruling elite want us to believe that inflation is being caused by wage rises for working people.
Now you should be angry that so many people have been lying to you.
There’s something you can do about it. The same thing you’ve always been able to do.
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In an interview on LBC this week, Rishi Sunak tried to convince listeners that slowing the rate of inflation will mean people will have more money.
This is not true and never will be.
Inflation is the rate at which prices rise. If it slows down, prices are still rising.
Meanwhile, Sunak has made it perfectly clear that he opposes pay increases for those of us who need them.
So slowing the inflation rate means people will have less money.
And that’s why he’s Maximilien Robespierre‘s Fool of the Week:
If he honestly believes that tripe, he’s a fool.
If he doesn’t, and is trying to get us to believe it, he’s also a fool, because we don’t.
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