It will come as no surprise to anyone with a family that the cost of living has rocketed over the past five years, by 25%.
In fact, that is an underestimate of the true increase for people on the lowest incomes because it is the essentials that have been rising fastest, like energy. Gas is up 52%. Meanwhile wages have risen by 6%. In other words we are getting poorer faster than at any time since the 1930s. This is what the next General Election is going to be about.
And the Conservatives have suddenly discovered that they are going to lose, which is to put it mildly, rather annoying. All the opinion polls show the cost of living is the issue voters are most bothered about – far more than Europe, benefit skivers or even Scottish independence. Yet the Government and the Bank of England are pursuing policies that make prices rise even faster.
When they hatch wheezes such as printing money, devaluing the pound, letting inflation rip and stealing pensioners' savings with low interest rates, they may think it's a victimless crime. But what all these measures do is increase the cost of imports, and the cost of housing, while squeezing incomes.
Tory ministers like the Chancellor George Osborne believe it to be self-evident that the way to make the economy flourish is to cut taxes for wealthy people. The only problem is that the little people who are supposed to accept declining living standards to keep the rich happy have a weapon: the vote. Unfortunately, the Government can't actually take away people's right to vote, however irresponsibly they may exercise it.
This is why David Cameron is under such pressure to scrap minimum pricing of alcohol. Members of his Cabinet, including leadership challenger Theresa May, hope that keeping the price of booze down will endear them to the workers, who, heaven knows, need a drink to console themselves for the fall in their standard of living. So what if it's killing them – at least it's one less reason not to vote Conservative?
Call me Dave has tried to have it both ways by making clear that he personally favours action on alcohol pricing, while claiming to be at the mercy of a party that doesn't. David Davies, his rival for the leadership in 2005, is saying minimum pricing "won't affect the price of Chateau Lafite at Chequers" which is a low blow, implying that the Prime Minister is out of touch with public concern about prices.
In Scotland, of course, we already have minimum pricing – or at least Parliament legislated for it. The courts have not yet been squared, and some European countries are claiming it is unfair competition to block the cheaper-than-water strong cider that's turning city centres into rivers of vomit. I find this very hard to understand because these are not competitive prices in the first place, they are loss leaders. The supermarkets cut the price of booze below the market rate to lure people into their stores to buy other stuff. It seems to me this is an anti-competitive practice which undermines legitimate traders who can't afford to give away their booze.
What impact will Mr Cameron's U-turn on minimum pricing have in Scotland? I don't know, but I don't imagine it will make it any easier to introduce this policy – which has overwhelming support from the medical profession, social workers and police, much as the smoking ban in 2005. Which, of course, was also opposed initially by Westminster.
So it is a race to the bottom of the glass as the UK Government tries to stem the popular revolt against rising prices. But there isn't any mystery why it's happening. Devaluing the pound was supposed to boost British exports. It didn't. Instead it just increased the cost of food and clothing. Low interest rates were supposed to get the banks lending, but all it did was put an artificial floor on house prices. Keeping house prices higher than anyone can afford has led to housing costs – in particular rent – going through the roof.
The Conservatives have been pursuing some very un-Tory policies. Debasing the currency is what they used to say was the vice of the Labour party. "You can't devalue your way to economic growth" is what Conservatives used to say. Margaret Thatcher's favourite nostrum was: "You can't buck the market." But the market is being bucked on a daily basis by money printing.
What will Mr Osborne do in his Budget next week, apart from keeping English booze cheap? Well, what he should do is build more houses – even the CBI is telling him that. It is the best way to stimulate economic recovery and brings a lot of employment. He needs to wean the economy off artificially low interest rates that have kept 140,000 "zombie" businesses afloat for the last three years. And he needs to cut taxes – but not the taxes he wants to cut. He should be cutting things like VAT that increase the cost of living for poor people.
You can't expect consumers who have suffered the worst drop in their earnings in eighty years to go out spending. Half are worried about keeping a roof over their heads; and the other half can't afford a roof over their heads. Quantitative easing and fiddles to benefit bankers are no answer. Policies designed to keep the price of assets like houses and shares high because that makes people "feel richer" are pure voodoo– a kind of faith healing for the economy. When people look back on this era they will wonder at the fetishistic obsession with high house prices and "confidence".
How does Mr Osborne pay for house building? Well, the Chancellor can borrow at less than the rate of inflation right now, which is almost like free money. Using this to get people back to work will boost growth and tax revenues. Also, it will bring down the cost of housing, so that people can afford to move again. All economic recoveries in history have begun with housing. We have a chronic shortage of homes and we are building fewer than ever before. Mr Osborne should pour himself a stiff drink and get his shovel out.
We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.
Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.