The cost of living

[lpm]

This is the sort of whining:

https://twitter.com/RoseAndCrownBeb/sta ... 7376763908
https://twitter.com/CallumMckeefery/sta ... 0706143235

I suppose it's because we've lost collective memory of dealing with high inflation.

It's hard for employees to raise their prices. Needs negotiating power and unions. But a business can put its prices up in seconds. Almond Croissant £1.95 becomes Almond Croissant £2.35.

Inflation is inflation. Prices go up. Why is this hard? Why are the lefty twitter morons demanding government subsidies instead?

[lpm]

Here we are, this is the way to do it. A pizza in Naples is now going to cost €8 instead of €6.50. €8!

https://www.wantedinrome.com/news/italy ... ceipt.html

[Woodchopper]

This is the sort of whining:

https://twitter.com/RoseAndCrownBeb/sta ... 7376763908
https://twitter.com/CallumMckeefery/sta ... 0706143235

I suppose it's because we've lost collective memory of dealing with high inflation.

It's hard for employees to raise their prices. Needs negotiating power and unions. But a business can put its prices up in seconds. Almond Croissant £1.95 becomes Almond Croissant £2.35.

Inflation is inflation. Prices go up. Why is this hard? Why are the lefty twitter morons demanding government subsidies instead?

That only works if they can still sell enough croissants at £2.35.

[dyqik]

Oh god, now they're doing it again with small capitalist businesses. The govt is supposed to bail them all out, apparently.

Absolutely not. If they don't have a viable business they should shut down.

They would have a viable business if the government hadn't f.cked around with the energy markets.

[lpm]

This is the sort of whining:

https://twitter.com/RoseAndCrownBeb/sta ... 7376763908
https://twitter.com/CallumMckeefery/sta ... 0706143235

I suppose it's because we've lost collective memory of dealing with high inflation.

It's hard for employees to raise their prices. Needs negotiating power and unions. But a business can put its prices up in seconds. Almond Croissant £1.95 becomes Almond Croissant £2.35.

Inflation is inflation. Prices go up. Why is this hard? Why are the lefty twitter morons demanding government subsidies instead?

That only works if they can still sell enough croissants at £2.35.

... which is why pay rises are so essential, instead of handouts to households of subsidised energy.

And if a cafe can't survive the drop in living standards, then it dies. It's not like cafes and pubs and restaurants aren't famous for high rates of business failure. A new cafe will open up again in a few years if living standards eventually claw their way back to 2019 levels.

[Bird on a Fire]

The kind of response necessary depends on whether this is likely to be a single winter of crazy energy prices nobody can afford, or the beginning of a multi-year period during which nobody can afford energy.

A temporary stop-gap might be fine to get through one winter and then everything goes back to normal, which seems to be what most European countries are gambling on.

If energy will be unaffordable in the UK for the foreseeable future, then yeah ok maybe it's best to let loads of businesses go under too because increasing unemployment will help bring inflation under control and improve living standards.

[IvanV]

Oh god, now they're doing it again with small capitalist businesses. The govt is supposed to bail them all out, apparently.

Absolutely not. If they don't have a viable business they should shut down.

They would have a viable business if the government hadn't f.cked around with the energy markets.

Many of them are in the same position as their competitors. They will all have to put their prices up. Inflation is high, lots of people are putting prices up. If all the bakers, say, put their prices up by 5-10% more than inflation, then there will be some reduction in demand for bakery products, but not so much. We are all poorer, spending is being reduced in real terms, and all business sectors will lose some spending. At the margin a few businesses will go under, or downsize, because there is less business to go around.

As lpm says, it is no case for selective support to energy-intensive businesses, it would just push others under instead, and fail to get the energy efficiency measures they would otherwise make. And government money would be much more valuably directed towards increasing the incomes of the less well-off. Moving money towards the less well-off will help support spending and keep the greatest number of businesses going. Even tax the well-off more to fund that.

[dyqik]

Most of these small businesses are owned by, run by, and employ the less well off. They are also key places in communities, including less well off communities.

Supporting them is supporting the less well off.

Unless you'd rather support the less well off by just giving them money on a temporary basis rather than helping transition businesses to higher energy prices that allow them to support themselves long term.

[Bird on a Fire]

Most of these small businesses are owned by, run by, and employ the less well off. They are also key places in communities, including less well off communities.

Supporting them is supporting the less well off.

Unless you'd rather support the less well off by just giving them money on a temporary basis rather than helping transition businesses to higher energy prices that allow them to support themselves long term.

But do you support them via direct cash handouts, or by supporting their less well-off customers and reforming the energy market?

[Woodchopper]

The kind of response necessary depends on whether this is likely to be a single winter of crazy energy prices nobody can afford, or the beginning of a multi-year period during which nobody can afford energy.

Europe has dramatically reduced its import of gas, coal and electricity from Russia. High prices are due to limited alternative supplies. Existing European supplies are being rationed via high prices, new supplies from outside Europe are very expensive, and Europe lacks the capacity to import what it needs (not enough LNG terminals or pipelines).

Gas prices may well fall as soon as storage capacity is filled. But I doubt that prices will be back to 10-20 Euros per MWh (they are at 262 now) for a few years, if at all. For prices to fall long term, Europe needs to increase its supplies, either of renewables, or its capacity to import LNG from the US and elsewhere. Building that capacity will take years. Prices could also increase if Russia pulls the plug and completely cuts off gas supplies.

I don't expect that its going to be back to normal (eg 20 EUr per MWh) in the spring. This isn't a short term crisis.

[lpm]

Most of these small businesses are owned by, run by, and employ the less well off. They are also key places in communities, including less well off communities.

That reminds me of the ubiquitous "much loved local pub forced to close... due to not enough custom" reporting.

[Bird on a Fire]

Most of these small businesses are owned by, run by, and employ the less well off. They are also key places in communities, including less well off communities.

That reminds me of the ubiquitous "much loved local pub forced to close... due to not enough custom" reporting.

"Enough" is relative, of course. If the brewery reckons they'd make more money selling the pub to be turned into housing or knocked down, it's going to take a lot of pints and crisps to compete.

Obviously I'm happy to do my part.

[Bird on a Fire]

The kind of response necessary depends on whether this is likely to be a single winter of crazy energy prices nobody can afford, or the beginning of a multi-year period during which nobody can afford energy.

Europe has dramatically reduced its import of gas, coal and electricity from Russia. High prices are due to limited alternative supplies. Existing European supplies are being rationed via high prices, new supplies from outside Europe are very expensive, and Europe lacks the capacity to import what it needs (not enough LNG terminals or pipelines).

Gas prices may well fall as soon as storage capacity is filled. But I doubt that prices will be back to 10-20 Euros per MWh (they are at 262 now) for a few years, if at all. For prices to fall long term, Europe needs to increase its supplies, either of renewables, or its capacity to import LNG from the US and elsewhere. Building that capacity will take years. Prices could also increase if Russia pulls the plug and completely cuts off gas supplies.

I don't expect that its going to be back to normal (eg 20 EUr per MWh) in the spring. This isn't a short term crisis.

No, I suspect it isn't. But moves to e.g. decouple energy prices in general from marginal gas peakers could be sorted by the spring, and insulating the worst properties by next winter.

Removing the last bits of dependency on gas will take years, so the options available are
1. moving bits of money around to lessen the impact of the cost increases,
2. increasing gas production from other sources, or
3. doing nothing.

2. would f.ck Paris, the climate and therefore basically everyone alive in a few decades. 3. f.cks poor people now. So governments (functional ones, that is) seem to have settled on 1. while they work on longer-term structural solutions.

[lpm]

Most of these small businesses are owned by, run by, and employ the less well off. They are also key places in communities, including less well off communities.

That reminds me of the ubiquitous "much loved local pub forced to close... due to not enough custom" reporting.

"Enough" is relative, of course. If the brewery reckons they'd make more money selling the pub to be turned into housing or knocked down, it's going to take a lot of pints and crisps to compete.

Obviously I'm happy to do my part.

FFS, BoaF, try to be right at least once in August.

We want more housing, don't we? We want pubs to close and be converted to flats. Given the collapse of the NHS we don't want rampant consumerism in unhealthy lifestyles. Due to the climate catastrophe we don't want to burn fossil fuels to prop up crappy leisure businesses.

[Bird on a Fire]

Sure. Turn the UK's 50k pubs into flats, and use the NHS savings (minus decreased tax take) to fund alternative community spaces. Who do I vote for?

[Woodchopper]

The kind of response necessary depends on whether this is likely to be a single winter of crazy energy prices nobody can afford, or the beginning of a multi-year period during which nobody can afford energy.

Europe has dramatically reduced its import of gas, coal and electricity from Russia. High prices are due to limited alternative supplies. Existing European supplies are being rationed via high prices, new supplies from outside Europe are very expensive, and Europe lacks the capacity to import what it needs (not enough LNG terminals or pipelines).

Gas prices may well fall as soon as storage capacity is filled. But I doubt that prices will be back to 10-20 Euros per MWh (they are at 262 now) for a few years, if at all. For prices to fall long term, Europe needs to increase its supplies, either of renewables, or its capacity to import LNG from the US and elsewhere. Building that capacity will take years. Prices could also increase if Russia pulls the plug and completely cuts off gas supplies.

I don't expect that its going to be back to normal (eg 20 EUr per MWh) in the spring. This isn't a short term crisis.

No, I suspect it isn't. But moves to e.g. decouple energy prices in general from marginal gas peakers could be sorted by the spring, and insulating the worst properties by next winter.

The problem with decoupling renewable energy and fossil energy is that there isn't enough of the former. Absent using price to ration it someone is going to have to work out how to decide what proportion of which source people will buy.

Removing the last bits of dependency on gas will take years, so the options available are
1. moving bits of money around to lessen the impact of the cost increases,
2. increasing gas production from other sources, or
3. doing nothing.

2. would f.ck Paris, the climate and therefore basically everyone alive in a few decades. 3. f.cks poor people now. So governments (functional ones, that is) seem to have settled on 1. while they work on longer-term structural solutions.

The European policy is 2, with the addition of increased coal production. Yes, the biggest long term (indirect) effect of the Russian invasion of Ukraine may well be on the global climate.

[dyqik]

Most of these small businesses are owned by, run by, and employ the less well off. They are also key places in communities, including less well off communities.

That reminds me of the ubiquitous "much loved local pub forced to close... due to not enough custom" reporting.

Tanking the economy and destroying jobs will really help affordability for the less well off.

[lpm]

The economy has already tanked. Past tense. The blow has hit.

It just hasn't flowed through yet.

It's like sea levels have already been hit, but it takes time for them to actually rise. Or like an epidemic that's already locked in, but isn't in the current numbers.

The starting point for policy decisions is what to do in this tanked economy.

[bjn]

Oh god, now they're doing it again with small capitalist businesses. The govt is supposed to bail them all out, apparently.

Absolutely not. If they don't have a viable business they should shut down.

Should live entertainment businesses that were not viable during COVID been allowed to go under?

[EACLucifer]

Oh god, now they're doing it again with small capitalist businesses. The govt is supposed to bail them all out, apparently.

Absolutely not. If they don't have a viable business they should shut down.

Should live entertainment businesses that were not viable during COVID been allowed to go under?

LPM's often a pizza wheel, but seldom more so than on this thread. All edge, no point.

[lpm]

Oh god, now they're doing it again with small capitalist businesses. The govt is supposed to bail them all out, apparently.

Absolutely not. If they don't have a viable business they should shut down.

Should live entertainment businesses that were not viable during COVID been allowed to go under?

Yes.

I repeatedly said at the time that businesses requiring long term investment - building a semi-conductor factory say - should be protected from the temporary pandemic chaos. But fast turnover businesses like cafes and restaurants, that even in normal times are always going bust and reopening under a new entrepreneur, should be left to their fate.

It's clear with hindsight that business loans/grants were far too generous.

e.g. from March 2020:

There are two requirements to consider in triage decision making:

1) What does this country need to keep going for the next year, whether loss making or not
2) What will the country need to resurrect a year's time, and if needed how easily can it be reborn

Based on this the govt can decide on who to save, who to mothball and who to let die.

For example, a mass market travel company, that we can call Fui. Need for next year? No. Need in a year's time? No, was already a struggling industry. Let it die.

Local restaurant. Need for next year? No. Need in a year's time? Yes, but these things are easily reborn. Let it die.

Exporter of electronic car components. Need for next year? No. Need in a year's time? Yes, and these sorts of things are very hard to start up. Keep alive and ready to spring back into life.

If anyone really wants to bail out struggling companies by subsidising their fossil fuel use, let's make it long term businesses in high value sectors.

[Woodchopper]

One thing though.

The Truss administration probably won’t provide more income support until it’s demanded by core Tory voters. And the toriest tories are people who run small businesses.

So, maybe bailing out publications is what it’ll take to also support people who need it more.

[dyqik]

"In order to save civilization, we must first destroy it"?

(aimed at LPM)

[Woodchopper]

"In order to save civilization, we must first destroy it"?

More like in order to save single mums we must first save restauranteurs.

[dyqik]

"In order to save civilization, we must first destroy it"?

More like in order to save single mums we must first save restauranteurs.

Certainly that will help the single mums who own restaurants, who work in restaurants, who use restaurants, or who work in catering supply, etc.

We can support both at the same time, you know.

And bar/pub, cafe and restaurant work can* be some of the more flexible jobs available, allowing single parents to work hours that fit around child care and to do as many hours as they are available for.

*obviously they aren't always.