In The Economist this week the columnist Bagehot points out that 'shrinkflation' -- a stealthy commercial device for raising prices without the customer noticing by reducing the weight, volume, quantity or quality of standard items -- is also used by Government when they discreetly reduce, or even remove, benefits and services without raising taxes. Legal aid is cut, the Police, with Government connivance, largely ignore the crime of fraud, while the NHS eats up an ever larger fraction of the State spending, with its share likely to reach 44% by 2024 compared with 27% in 2000. As we have seen with the impending rise in National Insurance contributions, eventually something has to give.
Even more shocking is how this diminishing State munificence is unequally shared among the voting cohorts. The British Government currently spends £20,000 per year on each young person and £40,000 per year on folk like me in their late 80s; the current figures of around 3m over-80s is expected to rise to 4.4m by 2030. Unless politicians take unpopular measures to dramatically stimulate economic growth, some of us will need to pay more into the Exchequer's coffers. While people living only on a State pension are struggling desperately to make very modest ends meet in the face of 6--7% price inflation, there are many like me with an index-linked professional pension and significant assets who live a life of middle-class comfort, to a large extent cushioned against the vagaries of market forces. I believe we should contribute more for the unfair share of the nation's wealth we receive.
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