Inflation Is Beast Of Burden We Must Avoid At All Costs

‘We could all too easily find ourselves back in the 1970s’

- Ross Clark Political commentator

WHO could argue with the Prime Minister’s ambition of turning Britain into a “high wage” economy? It is like offering us free beer, or an all expenses fortnight in the sun.

Of course we all want higher wages. But they will count for nothing if they are accompanied by higher inflation. And that, unfortunately, looks as if it is where we are heading. In August the Consumer Prices Index (CPI) surged to 3.2 per cent, up from 0.2 per cent a year earlier. And that was before the energy crisis. We could all too easily find ourselves back in the 1970s, when British workers had several pay rises a year – but prices in the shops rose every week.

I certainly don’t begrudge lorry drivers a pay rise. If some are now earning £1,000 a week it is compensation for the years in which they were underpaid and undervalued. As we are now discovering, they are an unsung part of our vital national infrastructure. Without lorry drivers working long, hard hours supply chains would very rapidly break down.

BUT it is inevitable that higher wages for lorry drivers will add extra costs for supermarkets, resulting in higher prices. What we have to watch out for now is wage demands spilling over into other parts of the economy, just as happened in the 1970s.