Conservatives need to nail inflation fudge

At long last, it looks like Gordon Brown’s record as Chancellor is being seen for what it was as a con trick. He inherited a booming economy with 5 years of economic growth, low inflation and throughout his tenure had a £20+ billion windfall of mobile phone 3G licences, global economic growth and low interest rates, cheap far eastern imports keeping down inflation and the internet revelation which has created new markets and growth. Labour ask us to believe that they had something to do with all this. Suddenly the global conditions change and it has nothing to do with them. This is the lie.
 
As the Conservatives have been arguing, we should be entering these potential bad times with low competitive tax rates and a surplus to fund them. Instead we are borrowing billions to fund pet Labour projects and the hundreds of thousands of civil servants that they’ve taken on. We have over regulated businesses because these civil servants are having to justify their existence which is causing us to slip down the world competiveness league.
 
Anyone this is just some background to what I wanted to write about and that’s the menace of inflation. A recent poll suggested that something like 90% of people don’t believe the Governments inflation figure. I find it astonishing that the rest do believe it. We have fuel up 20%, food up 10%, Energy up 20%, Council tax up 5% and so on. How on earth can they splutter out that inflation is 2.2% with a straight face. A poll suggested that 8.1% is a more accurate reflection of their personal inflation and that sounds much nearer the mark to me as well.
 
I think a portion of Labour’s weakness is the unrealistic figures they are portraying. This is where the Conservatives must pounce. As part of cleaning up politics, we must present realistic economic figures. After all, part of our current economic difficulties may well be due to the Monetary Policy Committee setting interest rates to deal with an incorrect inflation target. In short, we need to commit to restoring the Retail Price Index as the measure of inflation. Whilst that at about 4% may be an underestimate, it is certainly more accurate and trusted than the Consumer Price Index and will give the MPC a proper target to aim for.
 
We also need to look at the committee itself. Half of it is made up of Chancellor appointees. Does this make them truly independent you have to ask. Also where is the accountability? A letter to the Chancellor is hardly earth shattering is it. Perhaps there should be representation from Parliament (maybe the Treasury Select committee).
 
Changing the measure is imperative though. We need a measure that the public and business can have faith in, and it would prove the Conservatives are serious about sorting out the economic problems that Gordon Brown’s wasteful years have left us with.

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