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Is wastage fuelling infl ation? A
s consumers, we have become very accustomed to price increases. We have been informed that the infl ation
rate for December 2021 was 5.4%, the highest reading since 1992, but we know that the reality is far worse. A couple of examples quoted directly from Jack Monroe (BootstrapCook) dated Jan 19th 2022: “This time last year the cheapest pasta in my local supermarket (one of the big four) was 29p for 500g. Today it’s 70p. That’s a 141% price increase”. “This time last year, the cheapest rice at the same supermarket was 45p for a kilogram bag. Today, it’s £1 for 500g. That’s a 344% price increase”. As Monroe says, ‘such price increases (for basic foods) hit the poorest and most vulnerable households the hardest’. Such comparisons make a total nonsense of the offi cially quoted fi gures such as ‘an infl ation rise of 5.4%’. Everywhere we look, prices are increasing rapidly and signifi cantly, but wages are not keeping pace. In fact, if the working population ask for wage increases suffi cient to cope with even the low, offi cially quoted, infl ation fi gures, prices will need to rise still further to cope with the wage increase demands.
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Bank of England Out of Touch with Reality
Irritating the UK working population, Company Bosses and Unions still further, the Governor of the Bank of England, Andrew Bailey, (drawing a salary in excess of half a £million pounds per year), lectures us on the importance of ‘wage restraint’. ‘Why is it that every time there is a crisis, rich men/women ask ordinary people to pay for it?’
The comment about wage restraint comes as the Bank of England raise the base rate, for the second time in three months, to 0.5%. The excuse, as always, is to try to control infl ation amongst fears that the energy crisis will push this above 7%. Andrew Bailey, and his cohorts, don’t seem to realise that raising interest rates twice in 3 months will itself fuel infl ation still further, as it will increase operating costs for any company dependent upon an overdraft or bank loans, plus homeowners with mortgages, if the building societies decide to pass these increases on. Incidentally, Andrew Bailey’s salary is 8 times that of the median salary for a Bank of
18 February 2022 | Automation
England (BOE) employee and 18 times the UK average for a full-time employee, those same people that Andrew Bailey expects to exercise pay restraint. This just goes to show how out of touch with reality Andrew Bailey really is. The sick joke behind the BOE decision to raise the base rate is that The Governor allegedly claims this was necessary to curb infl ation and encourage people to save more. Really! In those infamous words from John McEnroe, ‘You Cannot Be Serious!!!’ Your actions have just stoked the fi re under infl ation and with so many struggling to make ends meet you ask us to save more! That might well be possible on a ‘fat cat’ salary, but certainly not on most people’s. The price of fuel for our cars and commercial vehicles is at an all-time high and yet, only yesterday, Shell and BP announced record profi ts for last year of £14 billion and £9.5 Billion respectively.
Face the Challenge As ordinary working people, on ordinary salaries, we can still do our bit to buy better and to waste less, but as we are already stretched to meet existing commitments without falling into debt, there is an obvious limit to what we can do, especially if infl ation continues to bite into our available cash and pay restraint is exercised to the extent that salaries don’t keep pace with infl ation. Manufacturers and employers in general will fi nd it diffi cult to pay salary increases in line with infl ation, unless they can get their customers to pay more (more infl ation) or unless they can
see increases in productivity. Come April, UK companies will have the statutory minimum wage increase and increases in pension contributions to absorb, without also having wage increase demands in line with infl ation.
Unlocking Opportunities to Reduce Waste & Save Money T e good news is that there is a lot that can and is being done, within the food and drink industry (the UK’s biggest employer) to reduce wastage and increase productivity. According to the charity WRAP and IGD’s
Annual Progress Report, the UK food and drink industry save more than 250,000 tonnes of food worth £365 million from going to waste a year. Launched in 2018, the roadmap outlines the route the UK food industry should follow to achieve the UN Sustainable Development Goal to halve food waste by 2030. More than 200 of the UK’s largest food businesses achieved an impressive reduction of 17% in food waste. Roadmap businesses generated 90% of the
increase in UK food redistribution, saving 26,000 tonnes more food in 2020 with a value in excess of £50m, enough to provide 60m meals. T ese are indeed great achievements, but far
more has to be done if even more signifi cant price increases are to be avoided. Many UK food and drink companies exist
on tiny net profi t margins. When we look at UK food company audited accounts (all freely available at Companies House), we fi nd that it isn’t unusual to see nett profi t margins, before tax, as little as 1% of turnover. Yet these
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