Gary's News and views

Gary writes a weekly article which appears in the Plympton Plymstock and Ivybridge News in South West Devon. The articles are published here.

 

Thursday 8 March 2012

FOCUS ON THE IMPORTANT

Apart from maintaining peace and decent public services, most people's expectations of government are that it will preside over steadily rising living standards. With the odd dip since the Second World War, that is what most of us have experienced. When I was young poverty meant not having shoes for your children. Now it means that they don't get the latest play station game quite as quickly as they want. I exaggerate but not much.

In the UK we have made giant strides in improving living standards since the 1950's. This has been as a result of a generally growing economy and the rapid advance of technology bringing labour saving devices and leisure goods to our door. The rapid increase over that time of more dual income families has also helped drive this phenomenon. If a family have sufficient disposable income and there are goods out there to buy, then living standards will rise.

What about the next decade? How is that looking, do you think?  If your pay has gone up in the past two years you are in a minority. If your fuel, food and motoring costs have not gone up in the past two years you must be living on a different planet. On top of this, because of the deficit facing our public finances the government had little option but to cut spending and raise taxes.

Result: disposable income squeezed. If the cost of borrowing, including our mortgages was not historically low, we would be in a full blown crisis.

Looking ahead a few years it is hard to see much change. We hope for steady growth in the economy, but it certainly won't be dramatic. Because of the pressure that rapid economic growth in China and India is putting on world resources including fuel power and food I can't see these prices coming down again significantly. There is no chance of any massive public spending in the short term, nor should there be. All of our focus must be on building sustainable growth into our economy and paying off our nation's mountain of debt.

So it will feel like a slog.

Is there any good news? Yes there is. Survey after survey tells us that happiness relates more to the quality of our relationships than the depth of our pockets. Maybe in tough times, when financial survival is uppermost in our minds, we should also concentrate on the things that really matter.

posted by Gary @ 09:44