Scotsman Letters: Inflation is more than just a monetary phenomenon
Individuals and households on low and fixed incomes are paying a high price for the “orthodoxy” of the Bank of England and the Treasury, where too much money chasing too few goods is seen as the primary inflationary evil. Hence the policy mantra: “tighten and keep tightening the money supply regardless”. Or so it seems as the real economy takes a remorseless and unforgiving hammering.
Inflation is more than a monetary phenomenon. Open economies rely on international supply chains and run the danger of importing inflation. The war in Ukraine led to a massive and unexpected spike in world energy prices which affected just about everything. Moreover, 80 per cent of global trade is containerised, and the cost of a container has more than tripled in the aftermath of Covid.
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Hide AdWhile external shocks are outwith government control, domestic factors are also at play. People’s willingness to strike to protect their standard of living is understandable. However, the “cost-plus” pricing behaviour of big business has received less media attention. Energy supply is the obvious example where the “Big Six” have a combined market share of nearly 80 per cent, according to Ofgem, the industry regulator.
However, economic power is also concentrated in banking, telecoms, petrol retailing, car manufacture, airlines, pharmaceuticals, food retailing etc. Crisis-weary consumers resign themselves to more price increases as big business makes excess profits. Economists regard such profits as a significant market inefficiency.
Policy must focus on independent monitoring and appraisal of these profits and their basis in cost-plus pricing. Full business transparency is required, with legal backing. Any excessive profits should be eliminated by levy and the revenues generated directed towards the support of economically vulnerable individuals and communities.
Ewen Peters, Newton Mearns
Student funding
I washeartened to hear the comments of Sir Peter Matheson, principal of Edinburgh and also to read Brian Wilson’s article ‘Free university tuition stops many Scots getting a better education’ (Opinion, May 13) raising the possibility of university entrance once more being means-tested.
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Hide AdMore specifically, it is gravely concerning that, despite a long tradition of excellence, Scottish university education is being grossly underfunded by the SNP/Green Scottish Government. It is far from satisfactory that the fees of students from overseas students and from other parts of the UK are being used to a large extent as a cash cow to pay for universal “free” tuition for Scottish students and that as a result there is a rigid cap on the number of Scottish university entrants.
While widening university access to students from deprived backgrounds is desirable, this should certainly not be done at the expense of denying entrance to hardworking Scots from less deprived homes and who have higher grades in their exams. It was outrageous that last year only students from deprived backgrounds with lowered entrance qualifications were admitted to Edinburgh University’s law faculty (“a mistake” admitted by Edinburgh University’s principal).
It is desperately sad that the only way many talented Scots attending state schools and who have high exam grades can currently have university education is to leave Scotland and somehow or other (in many cases not “happily as Brian Wilson suggests) manage to pay for education in another part of the UK where tuition is not free. Such students are unlikely to return to Scotland.
It would seem that an urgent reappraisal of student funding including the reintroduction of means-testing is needed. However, this will not happen, possibly because First Minister Humza Yousaf himself is more than comfortable for intelligent Scots to leave Scotland so that a mediocrity will vote for independence.
Sally Gordon-Walker, Edinburgh
Weapons fears
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Hide AdEveryone in our wonderful Commonwealth of Nations was in awe of Nelson Mandela for many reasons. For example, South Africa was the first country in the world to give up nuclear weapons.
Therefore, it was with great alarm and distress that I learned of an allegation that South Africa, of all the places in the world, is being used as a staging-post,by the Chinese Communist Party to export arms to Vladimir Putin's troops and to help to conduct his illegal war in Ukraine.
There are many reasons why we in Britain have cause to question our own dysfunctional relationship with the US State Department.
Whatever grievances, all the peoples of the world may have with the activities of the US State Department, South African people allowing their country to be used as a staging-post for the export of arms to Putin's kleptocracy, is not a rational way to address them.
Nigel Boddy, Darlington
Juryless trials
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Hide AdWould the European Union admit an independent Scotland if it allowed a charge that carried a maximum sentence of life imprisonment to be tried by a single, salaried employee of the same state that brought the prosecution?
To the Victims, Witnesses and Justice Reform (Scotland) Bill, the UK Government and its official opposition do not even have the purely constitutional objection that they have to the Gender Recognition Reform (Scotland) Bill. They would join in the automatic declaration that juryless trials had been a success in Scotland, and they would then extend them throughout the UK.
Therefore it is necessary to appeal over their heads, and to authorities that in any case the Scottish National Party professed to respect, namely to practitioners in other Roman law jurisdictions and to an EU that consisted almost entirely of such.
David Lindsay, Lanchester, Co Durham
Irish powerplay
With the UK economy growing by a derisory 0.1 per cent between January and March and still very much the ‘sick man’ of Europe, it is intriguing to note the fate that has befallen Ireland.
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Hide AdThat country has recently announced that it is seeking to invest its bumper windfall receipts into a sovereign wealth fund which could be used to shore up public finances in the future, instead of using it for day-to-day spending.
On the back of rocketing corporate tax receipts, the Irish government generated a surplus of over £7 billion last year, despite spending on energy support packages and other measures. The government expects this to swell further, with budget surpluses totalling over £57bn over the next four years, which could be used to tackle long-term pressures such as increasing pension demands.
While, without the full levers of independence, the ability to save such levels of funding is a dream for us in Scotland, some one-off monies such as the £700m recently generated from the ScotWind offshore wind leasing round sale could be put aside.
Following independence there is, of course, the potential to use oil and gas revenues to set up a sovereign wealth fund, mirroring Norway whose oil fund now stands at over £1.1tn.
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Hide AdThe Irish example of a small and agile economy in the European Union, which has over the years broadened its focus away from a stagnating UK economy, may dare I say it prove an example to those of us north of the Border if we are brave enough to take it.
Alex Orr, Edinburgh
Wind problems
On Thursday, May 11 a BBC presenter gave what I might describe as an electrified description of wind (just) overtaking gas as the UK's main grid feed over the past year, even giving the difference to two decimal places .To me this actually revealed lack of knowledge of the subject.
In our hierarchical grid supply, renewables have preference over gas. Fine, but that means, with our present wind fleet of over 11,000 turbines having a total installed capacity of some 30 GW, we should actually expect an average annual input to the grid of more than 30 per cent total requirement, pushing out some gas in the process, rather than being excited about its one time occurrence, so what's the problem? There are actually two main ones – intermittency and transmission – both very difficult and costly to overcome, the latter especially.
The cost of intermittency (constraint payments) now at something above £200m per annum is actually chicken feed compared with that required to provide a grid system and other measures enabling renewable energy to be fully utilised.
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Hide AdRenewable energy, contrary to what we are told, is actually very expensive – but that's another story.
(Dr) A McCormick, Terregles
Hapless Humza
What a few weeks for Scotland’s new First Minister Humza Yousaf!
We've had the the Green’ Deposit Return Scheme paused because there was no way retailers could make Green Lorna Slater's unrealistic go-live date, the National Care Service proposals are in deep trouble with councils and unions (the government doesn't know how much it might cost), the SNP government's Energy Efficiency Scheme has been put on hold until October, the Gender Recognition Reform Bill is subject to court action and the Highly Protected Marine Areas proposals have created a huge backlash in Scottish coastal and rural areas.
Is there no one in the current Scottish government who is capable of coming up with an idea, discussing it with relevant people/bodies, getting costs agreed and then laying out an achievable timescale?
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Hide AdI suppose when you consider the ferries, the dualling of the A9 and the Named Persons debacle, to name but three shambles, we should know the answer by now.
Jim Houston, Edinburgh
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