In politics, a leader sometimes needs to be ruthless and mean, patiently soak up the public opprobrium directed his way and wait until most people see that his stance was correct and necessary. When it comes to the state of the economy, and the pressures of inflation in particular, this is where we have got to.
Simon Clarke, the Chief Secretary to the Treasury, appears to understand this. He has offered no concessions to trade unions and public sector workers demanding higher pay to insulate themselves against price rises, both current and future.
Instead, this week Mr Clarke told the public sector plainly that they won’t be getting wage rises to keep up with inflation and must therefore take lower living standards on the chin. He also signalled to private sector employers that they too should take a similarly tough stance with their workforces.
His reasoning is that big pay rises will not only feed into more price rises in the short term by adding directly to production costs, but, more importantly still, will bake in expectations of high inflation in the medium term.
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