With oil tanker drivers being given an inflation busting pay settlement of 14% over two years, bringing their average earnings to an estimated £38,000 a year by 2010, two questions spring to mind:

a) How long and complicated is the training for this job, that they now earn so much more than, say nurses; or
b) How much more dangerous (one of the reasons put forward for the need for higher pay) is their work than that of a nurse working in casualty on a Saturday night.

It is not that we have a ‘downer’ on tanker drivers; they are entitled to seek a fair deal for themselves. What is deeply worrying is that they have used the excuse of massive profits made by oil companies to justify the increase.

This is the sort of ‘logic’ that can quickly lead to inflationary wage claims; “if the cost of living is rising, we need more money just to stand still”.

Well I have news for everyone. The economy is in a perilous position; we are not certain to go into recession, but high wage-push inflation could rapidly lead to what is know as stagflation – inflation accompanied by a lack of economic growth.

Over the last 11 years, the country enjoyed sustained growth based largely on public sector borrowing. This means that unlike previous occasions when the economy slowed down, there is nothing in the kitty for the government to kick start things; it has simply borrowed more than we can afford to repay, already. If the economy starts to shrink – and it will, if wage demands rise too quickly – then it will have insufficient tax revenue to meets its liabilities and we will be in a real mess.

We all need to tighten our belts and accept a lowering of living standards for a few years, or planning your retirement will become impossible, as inflation eats into people’s savings. Accept this now, and we can hope to return to better times relatively soon, whatever the Bank of England says about the end of the “nice” (Non-Inflationary, Consistently Expansionary) years.

Fail to act with restraint at all levels, and the weak (especially pensioners) will go to the wall.