Inflation and wages.

My personal opinion of the problem and what is holding this country back is the high cost of fuel especially diesel every thing is affected by the high price of diesel every thing needs to be transported that we buy and make, 3/4 of the cost of diesel is tax and then they stick vat on top all that cost is past on to us when we want buy or sell something,no wage increases can be afforded by the company's as they don't make enough money as the high cost of fuel increases the cost of raw materials bought in,in my own busyness the cost of materials has increased dramatically but the money that I get from the customers has stayed the same for years infact to move things I am selling things for less then I did a few years ago.

If the government doesn't put tax on fuel, how would you like to pay it instead?

If the government doesn't put tax on fuel, how would you like to pay it instead?

We all have to pay tax I know that, but I think transport or some sort of tax relief for busyness involved in delivering goods should apply, something like red diesel system would help a lot of company's,it would be open to fiddling but there must some help for transport company's some were along the line.

If the government took the tax off road fuel, would you be happy to see it replaced with a direct tax on those goods/items (including people) which are transported by road? - That would probably be more complex (and more expensive to levy.)

I've no doubt that the transport industry (be it companies which move freight around or companies which move people around) would be pleased to see a reduction in the taxes which affect them. Then again, I'm fairly sure that all industries/commercial enterprises would like to see a tax reduction.

UK fuel taxes affect everybody in the UK and everybody in the UK benefits from those taxes. For some - particularly the poorer - fuel taxes take a bigger portion of their income than for others, but then again, some people pay more (in real terms and as a proportion of their income) than do others - and they often benefit less than others.

I think if the general worker's wage went up with inflation we would not be in the economic situation we are facing today.

Nope.

Then we'd have wage inflation as well as price inflation, just like we had in the 1970s (a decade not noted for exemplary economic performance in the UK).

This is what's known as a Wage Price Spiral.

Inflation reached 25% at one point (link). Wage demands ranged from 22% and 46% (PDF link). Which of course meant that prices had to rise to pay for these wage settlements. And so it went on.

Inflation only really started to come down when the then Labour government imposed a pay cap of 10%. It was when this was reduced to 5% that the unions held a series of strikes over the winter of 1978-79 (the "Winter of Discontent") which ultimately cost Labour the general election.

High inflation with low economic growth is called stagflation, something the 1970s were noted for.

Cutting back on the money printing and currency debasement, not to mention raising interest rates would help fight inflation.

Unfortunately the UK has become such a "money junkie" that it can't live within its means any more, it always needs to shoot up another "fix" of phoney money (QE).

Raising interest rates would help fight inflation (just ask Paul Volcker), however, our "economy" is now so weak and fragile that even a return to the historic average interest rate of 5% is considered more than it can bear.

We need to stop creating inflation, not to stoke it still further with rising wages. If inflation was under control, we wouldn't need huge pay rises.

Unfortunately, the Bank of England has publicly admitted that it has deliberately chosen the path of inflation, despite its 2% CPI target:

Bank of England admits it 'chose' to let inflation soar to crippling levels

 

The Bank of England could have prevented the crippling rise in living costs but ‘chose not to’ despite the squeeze on household finances, a top official admitted last night.

 

Deputy Governor Paul Tucker said inflation was allowed to soar as part of a desperate effort to prevent another recession.

LINK

In trying to prevent a recession, they're dragging things out and making them worse.

With incompetent shysters like this in charge, we haven't a hope.