The latest idea from the coalition to save a bit of money and reduce the gargantuan deficit it to index link pensions to CPI (inflation which does not include house prices and council tax) rather than RPI (inflation which does include house prices and council tax.) This seems like a good idea at the moment as house prices have been increasing over the last year or so making RPI higher (5.1%) and CPI lower (3.4%).
In fact, many previous governments have historically vacillated between using CPI and RPI, and also wage inflation, as the means of indexing benefits and pensions. The best option for the government is of course to use whichever measure is lowest for indexing. Perhaps this is why headline inflation is deemed to be whichever measure is most expedient for the budget.
A previous minister, at a time when all three measures were running quite high at about 5% actually suggested using a new measure called 'core inflation' for indexing. Core inflation was far lower and apparently included only various 'core items', but it didn't include food, petrol, housing or energy costs - things which people actually buy. In fact nobody knew what core inflation did include apart from T-shirts from Primark and DVD players, which was why it was consistently so low, and therefore great for indexing.
The danger of changing the method of indexing is that CPI and RPI swap over quite frequently. When house prices are rising, RPI is higher and CPI is lower, so CPI is preferred for indexing. Vise versa for when house prices are falling: RPI is lower and thus preferred for indexing.
At this particular moment in time, house prices may just about to start falling again and sharply too, which in extremis could bring RPI into negative, deflationary territory. By altering the method of indexing pensions to CPI now, the government will save money in the short term, but will pay very soon if RPI falls sharply lower, perhaps losing as much money from the nation's coffers as in Gordon Brown's disastrous sale of gold at the bottom of the market. If this does happen though, there will be an immediate solution available of switching indexing back to RPI, although this will appear to be immensely cynical.
In the age of 'fairness', whatever that is, perhaps it would be truly fair to index benefits and pensions to the mean average of RPI and CPI, which will ensure some savings to the nation over indexing to the highest measure of inflation, and puts in place a single 'fair' system of indexing which everyone knows about, and cannot be changed on a whim by the goverment of the day.
Friday, July 9, 2010
Football and Entitlement
It's nice to look forward to the World Cup final on Sunday without especially supporting either of the participating teams. Most people in Europe quite like both the Dutch and the Spanish, so can just sit back and enjoy the match and hopefully some entertaining football from two teams who deserve to be finalists.
Seeing the progression of these two deserved teams, throws the progress and attitude of the England football team into sharp contrast. In almost every tournament of this level, England turns up with players and fans expecting to win, almost with the sense that they are entitled to win. And every time the team under-performs, or perhaps does perform to its level of ability - a level of semi-capable mediocrity which very much reflects much of the country from which the team hails.
It is easy to attempt to disown the team as not truly representing England, or being a bunch of over-paid out-of-touch megastars. The reality is that - yes, the members of the 'team' are for the most part a collection of selfish, greedy, sociopathic narcissists; but in saying so we hold up a mirror to ourselves. For this description quite fairly reflects the spirit which permeates through far too much of the English country and culture at this point in history.
The sense of entitlement is evident in England from the dole queue to the football star: the sense that one deserves something for nothing, and has no need to earn or work for a wage, or a prize, or anything else. At the dole queue, one expects money for not working; on the football pitch, one expects to automatically win a tournament without particularly doing anything special at all, even though there are far better players and teams from other countries there to act as agents of wrath on those carrying such a sloppy philosophy.
It is time to cast off the moronic concept of entitlement that has been built up over the last decade or so, and realise that if one desires success, one has to earn it and fight for it. In business, the Chinese know this. In football, the Dutch and Spanish know this. So let us watch the final on Sunday and take inspiration, and let it infuse our own minds and spirit with vigour and courage once again.
Seeing the progression of these two deserved teams, throws the progress and attitude of the England football team into sharp contrast. In almost every tournament of this level, England turns up with players and fans expecting to win, almost with the sense that they are entitled to win. And every time the team under-performs, or perhaps does perform to its level of ability - a level of semi-capable mediocrity which very much reflects much of the country from which the team hails.
It is easy to attempt to disown the team as not truly representing England, or being a bunch of over-paid out-of-touch megastars. The reality is that - yes, the members of the 'team' are for the most part a collection of selfish, greedy, sociopathic narcissists; but in saying so we hold up a mirror to ourselves. For this description quite fairly reflects the spirit which permeates through far too much of the English country and culture at this point in history.
The sense of entitlement is evident in England from the dole queue to the football star: the sense that one deserves something for nothing, and has no need to earn or work for a wage, or a prize, or anything else. At the dole queue, one expects money for not working; on the football pitch, one expects to automatically win a tournament without particularly doing anything special at all, even though there are far better players and teams from other countries there to act as agents of wrath on those carrying such a sloppy philosophy.
It is time to cast off the moronic concept of entitlement that has been built up over the last decade or so, and realise that if one desires success, one has to earn it and fight for it. In business, the Chinese know this. In football, the Dutch and Spanish know this. So let us watch the final on Sunday and take inspiration, and let it infuse our own minds and spirit with vigour and courage once again.
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