Richard Lack's Blog

Ageing Demoghraphic? - My Arse!

The Government would have us believe that the current pension crisis is down to our ageing demographic and that there aren't enough people of working age to support our 'ever ageing population' To say this is to shove your head so far up your own arse as to be completely blind to reality.

When I hear about the crisis affecting 12m workers I wonder why there are only 12m workers in a nation of 60m. What the heck are the other 48m doing?

For the better part they are either a: 'studying' or b: 'claiming'

There are plenty of people of working age among our ranks, but the Government insists on it's policy of encouraging 50% of school leavers to attend higher education, roping off a few million from paying into the system for several years. We now even pay 16 year old schoolkids to carry on attending classes. Classes for what exactly? It seems most graduates don't even have a basic mastery of spelling and grammar on entering employment. If I get one more e-mail from a graduate which fails to differentiate between 'their' and 'there', I'll force them to read an essay to the rest of the company.

Couple the rise of worthless and time-consuming education with the huge growth in benefits claimants over the last 50 years and you have a simple answer to your question. Increasingly our would-be workers are laying not just economically idle, but are chomping away at YOUR pension; well whatever's left after the thieving Chancellor takes a big bite out of your pension to fund Social Equality and lesbian donkey sanctuaries.

Think about it people. If all our young are studying there's nobody to pay for our old. If they are claiming benefits then the few of us remaining in work have to support both Waynetta and Aunty Ethel. Of course Waynetta isn't an unemployment claimant these days. She's a 'victim of long-term incapacity', and she doesn't 'claim' anything - she has 'entitlements'

The pensions time bomb isn't so much about our baby boomers. It's about our couch potatoes.

Having worked hard all your life you have to ask yourself why you should struggle on for another 5 years to fund a course in media studies or an addiction to Tennants Super and Tricia?

Blame the Government for high Petrol prices

In 2003 The UK government took 57.6p in tax on every litre of unleaded (74.2% of the pump price), while companies like Esso and Shell operate on a paper thin margin of just 6%. That's gross margin - not net. To work out how much is in it for them you have to deduct the cost of paying the petrol station, getting the fuel to the UK, additives and credit card charges etc. Let me put it like this - if they ran their business at break even the cost of fuel would still be 78p/l. No wonder they've branched out into selling dead flowers.

This document does a good job of explaining that the UK has the lowest supply price vs. the highest taxes in Europe.

In real terms a barrel of oil (158 litres) cost nearly $60 at the time of the Gulf War and $80 in the 1970's oil crisis. While $40 seems like a lot in absolute terms - the truth is that oil's been insulated very well from inflation over the past few decades meaning that it gets cheaper every year. This has been mercifully reflected in the price at the pump. While 82.9p/litre sounds a lot - petrol is cheaper than ever when adjusted for inflation

This coupled with a general increase in fuel economy has helped to bring down the relative costs of motoring. What the Treasury does using the Fuel Tax Escalator every year is to sneak back the difference between inflation and the inflation proof cost of oil, adding a bit on top for good measure. That formula works well for the Treasury as it causes only negligible pain for the consumer since few of us know how much tax comes out of a litre of petrol. What the taxpayer should be asking is - why isn't petrol getting cheaper? This graph shows very nicely what has happened with world oil prices since 1947. You'll see that there's a lot of volatility but no long term general upward trend as you would expect for other consumables over the same period.

I can illustrate this easily by saying that oil cost $14 a barrel in 1952. If it rose according to the Retail Price Index it would be 22 times more expensive today - a whopping $308 a barrel. If you think that's insane then look at the cost of bread or beer or butter.

One other thing to bear in mind is that Western economies are now far less reliant on oil. The US for example uses only half as much oil per unit of GDP as it did 30 years ago. The share of oil commodity imports in OECD countries shrunk from 13% in the 60's to just 4% in the 90's. This is chiefly due to a move towards service based economies and the effect of efficiency focussed taxation.

I'm not convinced that the global bully petrol companies are acting as any kind of an -opoly. The fact that their prices are broadly the same doesn't evidence the existence of a cartel at all. This isn't price fixing; it's healthy discounting according to local market forces. Filling stations are crucially aware that they need to stay competitive to within 3 or four miles. There are plenty of oil companies besides the big three and nothing to suggest that this industry is any more top-heavy than say supermarkets.

There are 2 main reasons why petrol prices are going up:
1: The Chancellor increases tax and that has to be passed on by law
2: Commodity traders factor in a risk premium for the war and terrorism and increase the price of oil. The oil co's need to pass these increases on to stop them going out of business and maintain profits.

Frankly if you believe that the government has a responsibility to tax people out of their cars with a rate of 400% on vehicle fuel then you have to agree that it has a corresponding responsibility to ignore calls for lower taxes from frustrated motorists like myself.

An alternative argument states that the British motorist contributes £45Bn a year to the Exchequer and receives only £2Bn back in road improvements and extensions. With no viable alternative being found in the joke that is public transport - our average driver is caught between and a rock and a very hard place to get to.

Council tax rises: An open letter

I'm totally hacked off at the extortionate rise in council taxes when all I see in goverment is waste and bureaucracy. For any of you that share my concern here's a letter to my local paper, in response to our councillors assertion that pensioners should be exempt from the rise:





Letters

The Kent and Sussex Courier

Longfield Road

Tunbridge Wells

TN2 3HL



Sir,



Messrs Worrall and Bruce-Lockhart miss the point entirely in defending the borough council’s 134,000 pensioners against a council tax increase running at 4 ½ times UK inflation.



I am saddened at the thought of our elderly stumping up this ridiculous sum. Nevertheless, it’s no more true to say that pensioners are all impoverished than it is to say that twenty-somethings are all rolling in it. To make such assumptions smacks in the extreme of discrimination. Our borough has more than its fair share of wealthy pensioners who sit on a seven figure store of value thanks to another kind of inflation - in house prices. While there are undoubtedly many old folk doing their best to stretch a meagre state pension, there are others who benefit from generous final salary schemes. What then of the young doctor who bears the burden of an onerous student loan, or the 20 year old legal secretary who took a pay cut this year and who annually parts with £2,500 for a season ticket not worth twopence? What will you allow for those of us with young families, or we newly-weds who must scrimp and save and eat baked beans for a house deposit? The twin evils Hardship and Poverty visit us throughout our lifetimes.



Yes pensioners should be safeguarded from the effects of profligate government spending, and so must the rest of us. Messrs Worrall and Bruce Lockhart often and all too easily pass the buck, crowing loudly about central government’s misappropriation of funds to other regions. But it is plain to see that huge economies can and must be made in local government. On presenting hard working people with a rise 4.5 times that of inflation we would like clarification that you have explored every available cost saving measure, including, but not limited to:



· Downsizing the considerable army of council staff and officials

· Stopping ploughing millions into perfectly serviceable parks

· Resisting the urge to spend another £100,000,000 on speed bumps, bus lanes or cycle paths



It is clear that our borough is at crisis point and cannot afford these things. So Messrs Worrall and Bruce-Lockhart, you’ll just have to be patient like the rest of us! Come to think of it - you might have to wait for your council tax this year. You see we’ve had the funds misappropriated towards resources elsewhere.



Yours faithfully,



Richard Lack