I’ve had some push-back on my column last week Inflation is always and everywhere a monetary phenomenon, there is no such thing as cost-push inflation. (desmondswaynemp.com) in which I argued that inflation is driven by the quantity of money rising faster than the goods and services available for it to purchase. As against material and production cost increases being passed on by the producers to consumers in higher prices.

As any producer or retailer knows, you can’t just pass on your additional costs to consumers in the expectation that they will pay-up. There will be a price that the market will bear, beyond which consumers will reduce their consumption and switch to other products. A retailer needs to consider whether a price increase will actually reduce his total revenue, because a reduction in sales might be proportionately greater than the increase in the price charged.
Any enterprise facing increased costs needs to consider whether those costs are worth incurring given the price that consumers are willing to pay, or whether it is better just to pack-up and do something else instead.

In a consumption driven economy like ours, when external factors  (like war in Ukraine or the closure of strategically important ports in China due to Covid) send basic commodity prices up, consumers prioritise what they need to spend and reduce discretionary expenditure. Inevitably, there will be hardship and unemployment among the suppliers of those discretionary items.
Equally, workers -faced by higher prices, demand higher wages. Which, when granted, will reduce the demand for their labour resulting in further unemployment.

Such is our concern about unemployment that governments seek to generate additional demand in the economy, through increased public and private expenditure financed by credit (i.e. more money) in order to sustain full-employment at the higher level of prices. This is inflation: you need more money to buy the same amount of stuff; your money holds less value relative to what it can buy; Money, like anything else, is less valuable because there is more of it.

From the late sixties to the late seventies governments tried to control inflation by regulating prices and wages instead of dealing with the fundamental causes -which were their own policies of expanding the money supply in an attempt to cure rising unemployment.

Since the shock of the financial melt-down of 2008, governments have similarly stood by as central banks sustained economic activity through a new way of increasing credit (‘quantitative easing’). We enjoyed the party, but now we have the inflation hangover.

The whole world economy has endured the same oil and food price shock, but inflation differs in each developed economy according to the monetary expansion engineered over the last decade. Japan eschewed that policy; that’s why its inflation is only just over 1%.

We need stop drinking now, and recover from the hangover

Inflation occurs when too much money chases too few goods. Money is like any other commodity: the more there is of it, the less value it holds.

We’ve seen energy prices rise because the demand has exceeded supply as the world economy recovers from the Pandemic at the same time as the situation in Ukraine has led to the sanctioning of Russian oil production.
We can respond to the higher energy price by cutting our consumption of energy, or if that is too painful, by paying the higher price and instead, manage our limited finances by cutting our consumption of something else. Collectively, as millions of us make these decisions, there will be either a reduction in the demand for energy, or a reduction in the demand for other commodities. Prices will fluctuate accordingly: The price of energy will ease as demand for it at the higher price falls, or if we just can’t do without it, then the prices of other goods will fall as we cease to purchase them because we are now spending so much on energy instead.
This will be an uncomfortable process in an economy like ours which is so reliant on consumer expenditure. Our higher energy bills will inevitably squeeze other aspects of economic activity that we can no longer afford. There will not however, be any increase in the general level of prices. The higher price of energy will be offset by the falling prices of goods that we can no longer afford.

A general rise in prices can only be sustained if we try and avoid the pain by inflating the economy to accommodate the higher level of prices  by ‘printing’ and circulating more money. We have been doing this in a number of ways for years. Understandably, governments -fearing recession and unemployment due to the banking crisis in 2008 and the pandemic more recently- increased their own spending, borrowed more, and extended credit throughout the economy.
Initially, this did not drive-up prices because demand remained suppressed. Now however, we are at full employment, there are huge world-wide supply chain problems and we have had the oil price shock.  We are in a situation where too much money is chasing too few goods.
The only blunt tool the Bank of England currently has with which to remedy this, is to increase interest rates to try and squeeze some of the excess demand out of the economy. This will hurt, but it will pass.

What we must not do is feed the monster by creating more demand in the economy through reduced taxes or increasing government expenditure to ease the short-term pain. Such policies will drive prices up further and -most damaging of all- create an expectation that inflation will continue. That would lead to excessive wage demands,  which would reduce employment, and -so proceeding-  give rise to further demands to inflate the economy with more spending and credit to mop up that unemployment…and so the cycle will continue.
We’ve been here before: welcome to the 1970ies.
Best to grit out teeth and take the painful medicine now, than perpetuate if for decades.

Having been sanctioned by Putin’s regime I will be unable to spend all the roubles I’ve been saving up under my mattress.
The accusation states that I have been involved in ‘whipping- up’ anti-Russian hatred. The reality however, is that there is no need for anyone to whip-up such sentiments because their actions speak for themselves. The real question is why their armed forces behave so ruthlessly. Perhaps it’s because they have themselves been governed ruthlessly for generations. Furthermore, no-one ever atoned for the millions murdered by the Soviet regime. Khrushchev’s speech listing Stalin’s crimes was in secret session and not for public consumption. With the exception of Beria, Stalin’s cronies enjoyed the remainder of their lives and the crimes of post-Stalin regime resumed. Putin has increasingly rehabilitated Stalin’s reputation. Unaccountable ruthlessness is part of the system, just ask Navalny, or the residents of Salisbury.

A number of constituents have responded to my blog of 17^th April Fixed Penalty Notices (desmondswaynemp.com) with comments along the lines “so you support a liar”. Either they didn’t read it or have difficulty understanding, because the whole thrust of the piece was an explanation precisely why I though the PM hadn’t lied and, however misjudged, genuinely believed that the gatherings at Downing Street he attended were ‘work events’.
Had the PM invited his friends and family to a gathering then the level of outrage that has been expressed would be justified. The gatherings however, were populated by civil servants and officials who were at their place of work, with the people with whom they worked daily. Far from being the PM’s mates, they probably didn’t even vote for him.
I can understand the anger of people who lost loved ones during all the restrictions of lock-down, but the PM was also among them.  He was himself hospitalised without the comfort of visitors just like everyone else.

Half a century ago I had to summon up courage to reach up to the top shelf for a copy of Health & Efficiency, then endure the disapproving glare of the newsagent as he placed it into a brown paper bag. Now -apparently- porn can just pop up on your mobile phone spontaneously.
How excruciatingly dreadful it must have been to be Neil Parish at the centre of the media frenzy, with even colleagues demanding instant execution. Imagine the humiliation and embarrassment of attempting to explain it to your wife, or your mother.
There are people, including children, who are addicted to online pornography. I recall an excellent and hilarious play about the condition, but it is no joke. My former colleague Claire Perry campaigned tirelessly against it and I remember being summoned to a meeting at Poulner Baptist  Church to be cross-examined about what we were going to do about it. Not much yet, is the answer to that one, although we expect the Online Harms Bill to be in the Queens Speech on 10^th May (though there are many legitimate reservations about the bill).
We can sometimes be understanding of addictive behaviour such as gambling or alcoholism.
Watching Porn in the Commons reveals a lamentable want of judgement. Perhaps some of the coverage has revealed a want of charity too.

This year, with estimates ranging from 60,000 to 80,000 for the number of people who will arrive on our shores in small boats, it is clear that we need policies that both reduce incentives and act as a deterrents.

First,  incentives – why do so many people fleeing the war zones and economic basket cases travel all the way across continents to get to Britain?
From some constituents I still hear the prejudiced nonsense that they come to take advantage of easy access to our state benefits system. Actually, the benefits available in some other European jurisdictions that they pass through are significantly more generous. On the contrary, they choose to come to Britain because it is here that it is so much easier to find work.
Notwithstanding record numbers of vacancies, we forbid asylum applicants from working. Instead, we pay them modest allowances insisting that they remain idle. Many of my parliamentary colleagues believe that this is absurd and that we should allow them to work in all those enterprises keen to employ them.
In my estimate this would be a mistake: it would increase the very incentive to travel all the way to Britain eschewing the opportunities to settle elsewhere along the route.
What we need to address is the ease with which illegal work can be had here.

Second, deterrence: If you make it to Britain, even if your application for asylum is rejected, there is little prospect of you being deported, So, If we are to reduce the numbers arriving across the Channel we need the deterrent effect of that danger and expense ending up with the probability of deportation  elsewhere.  Some of the measures in the Borders Bill currently going through Parliament (if we can get them through the House of Lords) will address aspects of this by doing away with endless appeals and other abuses.
The plan to deliver arrivals to Rwanda however, has the potential to completely undermine the people-smuggler’s market: why risk thousands of pounds only to end up in Rwanda?
I do not underestimate the difficulties of implementing this plan. I drew attention to those problems in this column on 19^th November 2021 Channel Crossings 2 (desmondswaynemp.com)
It will be expensive, controversial and beset with snags that we will need to overcome (and I drew attention to one of them in the Commons this week), but it might just work, as it has done for Australia.

Those who describe it as scandalous and contrary to God’s law need to come up with an alternative to the current scandal of the squalid camps around Calais, vulnerable people being fleeced by gangsters, and the dangers of the Channel. So far, all they have offered us is the hope of better co-operation with the French authorities – ignoring the fact we’ve already been paying them handsomely. And ‘opening up more safe routes to UK’. The naivete of this suggestion is breath-taking: those that fail to secure an official safe route, will carry on anyway with the traffickers.

I know Rwanda very well. It’s time to give it our best shot.

 When I voted to make Boris leader of my party it was  to win an election and ‘get Brexit done’; in that respect he has delivered. When I made my decision to support him I did so in the full knowledge that he came with a cupboard full of skeletons. Life and politics are about choices and priorities.

 When ‘partygate’ first broke, I responded to emails by observing  that those who ‘have broken the law deserve to face the full force of the law’. Well, if the full force of the law is £100 fine, then so be it.
It is true that we require MPs to quit when guilty of serious crimes for which imprisonment is the penalty, but not for a fixed penalty notice. In the end, it comes down to how seriously you consider the PM’s breach to be.

I am not persuaded that my expectations should be altered by the fact that the rules that the PM breached, were his very own rules. Though, more fool him for having made them.
I opposed those rules. I thought the Government had no place to make them. By the month, as more evidence emerges of the damage that those ruled have done, I am reassured that my stance was the right one.
I spent the first few weeks of lockdown explaining the distinction between guidance and regulation to constituents in order to reassure them that they were entitled to do things that they often thought they were forbidden to do. This was particularly the case for many sole traders who feared that they were no longer entitled to carry on their businesses. There was a clear distinction between a dwelling and a workplace.
In this column on 12^th February Another party…and a riot ? (desmondswaynemp.com) I acknowledged that when the PM told the Commons rules were not broken and that there were no parties at number 10, a shudder went down my spine. As I said then, not because I didn’t believe him to be telling the truth, I did believe him and still do, but because I had no doubt that his honest belief of what amounted to a ‘work event’ would be considered to be a party by a great many people. Now the Police have reached that judgement too.
I wasn’t there. I haven’t seen the evidence, but I have my doubts.
(What was clearly a party, and a disgraceful and egregious breach if the accounts are true, was the gathering on the eve of Prince Phillip’s funeral, but on that occasion the PM was in Buckinghamshire.)

The deaths of so many people from Covid-19 were made so much worse by the inhumanity of regulations that prevented friends and relatives comforting the dying and comforting one another at funerals and wakes. My heart goes out to those who have written to me to express their anguish and anger about the way their loved ones died. That anger is justified by the want of judgement at No.10. I accept that, as has the Prime Minister.

My focus remains the much greater folly of what I still consider the disproportionate regulations themselves. I am entitled to blame the PM for them, but I must acknowledge that his Government’s efforts first to relax and then to revoke the regulations, were opposed by the opposition parties now demanding the PM’s head, but they wanted even stricter and prolonged restrictions.

A Constituent emailed me to ask if I believed that a woman could have a penis.
Clearly, she wasn’t contacting me for an insight into my biological understanding and expertise. Rather, she was seeking to identify where I stood on the question of ‘trans rights’ which has produced so much confusion and obfuscation from front-line politicians when that question has been put to them recently.
I am relieved that the Prime Minister has now brought some robust common sense to the matter.

There is nothing new about transgender issues. It is as old as human experience. As for it becoming a matter of public discussion and interest, I remember reading Jan Morris’s book Conundrum about her own experience, when it was first published way back in 1974.

Personally, I don’t have a problem with people, who are uncomfortable with their biological sex, identifying as the opposite gender. It does me no harm to me and it isn’t my business to enquire after the personal choices of others: live and let live.
There is a proper distinction to be drawn however, when it comes to a man who identifies a woman, yet retains his male genitals, being admitted to exclusive female facilities such as changing rooms, toilets, hospital wards, and even prisons. I find it difficult to comprehend that some people even question this, let alone mercilessly persecute female academics and authors who have sought to protect these exclusive biologically female spaces.

Now let’s come to the question of ‘conversion therapies’: There is little disagreement that the more cruel and brutal parts of conversion therapy should be banned, indeed current legislation already outlaws the more egregious aspects. There are important interventions however, that need to be thoroughly explored and which must not be caught by the ‘chilling effect’ of ill-defined and poorly thought through legislation. It is crucial that teenagers with gender dysphoria receive support from medical and psychological professionals before they take irrevocable decisions about a transition, which they might later regret. This is not attempted conversion, but merely investigating the causes of gender dysphoria, which can be numerous and complex.
There are particular concerns about the exposure of children to radically progressive ideas concerning sex and gender. We must avoid heading down a road where a generation of young people are taught to think that it is normal to transition to a different gender before becoming an adult.

Finally, Women have been fighting for decades for their sport to achieve the same status and prize money as men, yet we now find ourselves in a situation where biological males can announce themselves to be female and proceed to blow their biologically female opponents out of the water. This is ridiculous. Biological men should compete with biological men and biological women with biological women. A compromise might be to create transgender events where those who have transitioned are able to compete against each other on a level playing field, rather than denying those who have been training for an event their whole lives a fair shot at glory.

I have received a large number of emails about the rise in energy bills. 

Some have asked for a windfall tax on the oil companies to generate revenue that can then be used to reduce consumer bills. I addressed what I consider to be the folly of a windfall tax in this column last week. 

The Chancellor announced a £9 billion package in February to provide some relief through council tax rebates and a scheme for spreading costs over the next two years. This will help but it represents only a fraction of the increased bills that we all face.

Energy prices are determined by supply and demand in international markets and are beyond the control of any government. Growth in international demand relative to the supplies available was already driving prices up as economies recovered from the Covid pandemic. The impact of war in Ukraine and the sanctions that we imposed on Russia sent the prices of oil and gas through the roof. As I said in the Commons, when we impose sanctions on Russia, we are also imposing them on ourselves. The only consolation is the privations that we will endure are as nothing, compared to the suffering of the people of Ukraine.

There are a number of sources of assistance for people worried about their energy bills or falling into debt.  Smart Energy GB has worked with the fuel poverty charity National Energy Action to provide simple and helpful advice which can be found on their websites. Many other organisations also provide advice and support, such as Age UK and the British Gas Energy Trust. 

  

People who prepay for their energy might benefit from upgrading to a smart prepayment meter which provide new ways to top up online, over the phone, by text, or by smart phone apps. The accurate and near real-time data allows energy suppliers support prepay customers more easily, by offering tailored support assistance as emergency payment applied directly to the meter, or advice on managing energy costs.   

In the end there is no way of getting over the fact that we have to pay for the energy that we use to heat our homes, and we need to reconcile ourselves to using less of it.
When I was a child we didn’t have central heating and we’d often be fascinated on a cold morning by the frosty patterns on the inside of the window panes. My grandparents didn’t have a fridge because they didn’t need one, there was a room that was easily kept cold enough. We all wore warmer clothes.
These days may come again