Way to curb inflation has to be the target

IN the short term,the RMT is doing more good than harm in seeking to prevent redundancies and achieving a pay rise in line with inflation, but, in the longer term, the union, as other trade unions seem likely to do in following the RMT’s action, is set to exacerbate the inflationary problem for everyone else in pursuing the monetary illusion that their members suffer from when inflation rises further and cuts their income in real terms. That is the point at which the harm outweighs the good.

The Government must squeeze monetary inflation out of the system by bringing in deflationary policies for the economy as a whole, and by taking away the punchbowl in the public sector by not financing inflationary pay rises from the top to the bottom of the workforce.

The private sector can be prevented from continually awarding inflation-busting pay rises, particularly for chief executives and top management, by excess pay and bonus taxes.

Unless measures along these lines are rapidly introduced,the UK is due to repeat the economic disaster of the 1970s of inflation well over

20% and the return on capital, in manufacturing in particular, of 2%. The result of this was three to four million unemployed, which only the tight monetary policy of Margaret Thatcher’s government was able to turn round.

In the current situation, the Government should set a framework of budgetary control which does not allow for rises in inflation and force or nudge both sides in the railway industry to negotiate a wide-ranging deal which covers redundancy and working practices, as well as pay.

The Conservative Government representing the employers and the Labour Party representing the trade unions in this dispute seem to be incapable of developing the mindset required to resolve this problem.

The Liberal Democrats, judging by their results in recent by-elections, can give the necessary rational approach towards resolving these issues. The electorate in Tiverton and Honiton are ahead of the game and seem to think so. The Labour Party has made some progress with its result in Wakefield, but not enough to move the dial.

Jeremy Comerford Chippenham, Wiltshire