Fuelling inflation

3382 Comments | Add Comment | Blog entry posted 13th February, 2008

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Inflation is currently running at the highest level since June last year, and rising fuel costs are to blame – that’s the conclusion of the latest report on inflation by the Office of National Statistics (ONS).

The two indicators of inflation, the Consumer Prices Index (CPI) and the Retail Price Index (RPI), both show an increase. CPI puts inflation at 2.2%, up from 2.1% in December, while RPI shows inflation rose from 4% to 4.1% over the same period. It’s the fourth month in a row that inflation has exceeded the government’s target of 2%

The report points the finger at a number of factors including food and drink prices, but says “the largest upward pressure came from an increase in the price of road fuels.” The national average price of unleaded rose 1.3p in January alone, taking it to a total of 103.9p per litre. This time last year a litre of petrol cost 87.5p.

High fuel prices drive inflation because fuel is a fundamental to the infrastructure of the UK. Our food and basic goods are transported using it, and if the price goes up, so does the price of our goods. A small amount of inflation is healthy for the economy, but too much and we start to run into problems – missed mortgage payments, repossessions and unemployment.

Worse still, the report’s inflation figures don’t take into account the impact that the energy price rises in January will have, because the current model assumes it will take up to 4 months for the price rises to take effect. The full effects of inflation may also have been dampened by a decrease in clothing costs and cut-price offers on the High Street, which effectively offsets the problem of high food and fuel. Economists are warning that this, combined with two further 2p increases in fuel duty planned for April and October, will mean inflation will hit 3% by the end of the year.

The freight industry sent a letter this week to the Chancellor, asking him to scrap the 2p a litre increase planned for April, and in a letter to the Daily Telegraph, 11 leading business figures argued that they were being hit simultaneously by a slow down in the economy and rising fuel costs.

It said: “At 50.35p a litre, UK fuel duty for diesel and petrol is already the highest in Europe. Indeed UK diesel duty is double the EU average rate of 25p a litre. The chancellor now plans to increase this by 2p per litre from 1 April.”

“Such an increase will generate further serious difficulties for the transport and forecourt industries, business drivers, those dependent on the car, and for businesses or individuals in remote or rural areas with no alternative transport options.”

Have you noticed an increase in living costs? Are you worried about the effect that further inflation rises will have on you? Do you think the Bank of England is capable of controlling inflation?

Replies to Fuelling inflation

Chris Bishopo February 13, 2008

report reply to Chris Bishopo

It gets worse and worse - in earlier times this unelected 'Prime Minister' and his predecessor would have found their heads impaled on a spike on London Bridge for treason against the Nation. Oh for the 'old times!!!'

Ken W February 13, 2008

report reply to Ken W

Ciouncil Tax Frozen
Council Rents +5%
Water Rates +5%
Petrol +5%
basic foodstuffs [ie bread , milk] +2.5<>5%
etc

UK Pensions & Benefits +1.8%

would someonme else like to do the math and tell me that Nulabour are the Peoples' Party!!!!!!!!!!!!!!!!!!

Don't blame your LA, all finance is approved by the Treasury!

and from this we're expected to save!!!!!!!!!

MP's think shame for your greed

Keith Wood February 13, 2008

report reply to Keith Wood

FUEL STRIKE LIKE BEFORE BRING THE UK TO A STOP THEN THE GOVERMENT WILL LISTEN

Pete Smith February 13, 2008

report reply to Pete Smith

We should really look at the underlying reasons for the rise in fuel prices. These are two-fold, and rather simple:

1. The USA is printing money as a short-term means of resolving its economic problems. This is the underlying reason for our inflation.

2. The pointless (and criminal, but that's another debate) war in Iraq makes the supply of oil much more expensive.

It doesn't affect me too much, even though I have two cars (one modern, one classic) as I do less than 1,000 miles a year combined. But I really feel for those who have to drive every day and have no public transport alternative. Our railway systems in particular, are absolutely shocking.

C French February 13, 2008

report reply to C French

With the economy slowing down, a recession is very likely. The last thing the UK economy needs, by this out of touch Govt, is a further cut in people's disposable income, by increasing fuel duty, in addition to other ever increasing taxes.

I'm self employed & I have had a weekly business breakfast meeting for the last 8 years with 20 other small businesses. IMHO Small businesses are the backbone and barometer of the UK economy. The typical answer now to the weekly question of how is business, is the most depressing I can ever remember, quite often now the answer is simply "dead"!

We need a General Election now, not in 18 months time, to remove this pigheaded, arrogant, deceitful Govt before even more record levels of bankruptcies/redundancies/repossessions occur.

We also need the promise of referendum on the EU Treaty fulfilled now, because pretty soon it won't make any difference at all which Govt we have here as 100% of our legislation will come from the EU instead of the 80% currently.

As for trying to justify the fuel duty increases, by thinking "oh they'll just tax us somewhere else", what kind of a defeatist attitude is that. We just have to make sure we remove this tax & waste Govt asap.

Don't start me on the theory of man made global warming, being caused by CO2 and therefore we deserve high levels of tax on fuel, £25 per day congestion charge in London etc. - what a load of tosh. Just do a search for "The Great Global Warming Scandal" Channel 4 documentary on youtube. Brilliant documentary, that deserves to be repeated on a daily basis to offset all the claptrap produced by the IPCC/Govt

Phil Cooper February 13, 2008

report reply to Phil Cooper

yes i am feeling it we have two cars and public transport isnt an option for the time and distance my partner and i have to travel to work
it also costs me £12 per week to go through the tyne tunnel
all of these increases are making it more expensive by the day JUST TO GET TO WORK

Ray H February 13, 2008

report reply to Ray H

its funny thow, cos eveyone said they wouldnt stand for it anymore, and that was at 80p a litre, now its over a pound, and you are still shouting, i suppose we will still be doing the same when its £5.00 a litre.

M J Wheeler February 13, 2008

report reply to M J Wheeler

I'm a postman, to save time in the mornings I use my car to help me get home quicker so I can look after my son, so my wife can go to work in the afternoons.
This is however looking more and more unbenificial as the price of fuel goes up.
Every Friday I used to put in £20 of petrol, and last me the week. I do the same these days, but now either on a Tuesday or Wednesday I have to put in an additional £10. This adds up to £40 a month extra. Which is a serious amount of money to myself and most of all to my family to lose. It means my kids lose out doing one of their many hobbies they have to brighten their lives up. I will have to consider like most fellow Postmen in my office have done already, start catching the vans in the mornings, and have my bags droped to me. Which normally adds at least an hour and a half to my day. Which means my wife will be late for work.

B February 13, 2008

report reply to B

this is a big time con i am amongst a bunch of student who have to travel and public transoprt is a joke and petrol prices are just getting stupid. everytime you hear about prices rising i just see red. somethings got to be done!

Nick O February 13, 2008

report reply to Nick O

I am led to believe that TESCO is infact the largest seller of Fuel in the uk. Perhaps hitting TESCO's Forecourts would therefore bring a speedier response to reducing Petrol Prices than BP/ESSO?

Derek Spence February 13, 2008

report reply to Derek Spence

The only time that this government is going to listen to what is being said is in a run-up to a General Election. We, the user of petrol/diesel must keep it in mind when, at last they do call an election exactly what they have been putting us through. If we all vote against them, it will put them back into history. But only if we have got a memory and determination.

Edwin Woodfine February 13, 2008

report reply to Edwin Woodfine

When fuel goes up in price the more money the Government gets from VAT. They should not need to increase the duty. 2 pence a litre is 9 pence a gallon,just incase anyone has forgotten.

Ray H February 13, 2008

report reply to Ray H

make no mistake about it, there will in time put up the price for biodiesel fuel, as soon as they see its a money spinner.

Martyn P February 13, 2008

report reply to Martyn P

FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !! FUEL PROTEST NOW !!
Get rid of Mr Brown.......

Mr S February 13, 2008

report reply to Mr S

I'm paying 112.9p a litre for fuel. What with that and the cost of living going up, whats the betting that my payrise won't reflect the increase come the end of the financial year in March.

Michael Jackson February 13, 2008

report reply to Michael Jackson

It is absolutely diabolical,
I'm a taxi driver and pay out allmost £200 every week for fuel.
When will these increases end, I'm starting to think I would be better off on benefits.
Now the Government is bringing in conjestion charges for Cities too. Where will it end.

Colin Boardman February 13, 2008

report reply to Colin Boardman

It certainly tells on my income. As usual Pensioners feel it most, my £3.05 increase will not go very far. Infation 2.5%?, where do they get their figures from. What would it be if it was calculated the same way it was in 1997.

Jim Collins February 13, 2008

report reply to Jim Collins

its all very well saying how the fuel duty/price etc is effecting us but instead of talking lets do something about it. Its no good individuals buying every other day or only buying from certain suppliers it needs a concerted effort and that must involve the haulage industry who have proved before that action by them will make the goverment do something. Lets for once copy the French they wouldn't just sit back and moan about it, direct action is the only answer.

John Rice February 13, 2008

report reply to John Rice

A further Government driven rise in fuel costs will lead to me becoming less competitive in a tough market place. Being a small company everything is highly visible and so there is virtually nowhere to absorb yet another increase which, when it reaches the Treasury, is almost certain to be mis-spent by a Government which has clearly lost the plot on managing our economy.

Theresa February 13, 2008

report reply to Theresa

some people are really odd, they blame the big cars for every thing from polluting to being dangerous, well most of the big classy cars i.e 4x4 give off less polution than, than the silly little cheap oil burning noddy cars, the word jealous comes to mind!!

D M H February 13, 2008

report reply to D M H

The only way to reduce the price of fuel is to join together and target the super stores who sell fuel cheaper than the corporate companies like Esso, if we stop using Tesco etc they will be forced to reduce their prices, once they do this, people will then return to them making the companies like Esso reduce their costs.

As for Government taxes the public need to look at a way in whioch we can stop the continued taxes on us, stop paying council tax they can't put us all in jail as they are full already.

James February 13, 2008

report reply to James

I am currently taking driving lesson's so it hasn't directly effected me yet as such although i am regretting paying all this money for lessons when i probably wont be able to afford higher fuel costs, higher insurance costs, and higher road tax and the rest.

In directly it has already hit me though, us people that don't currently drive are hit with increased transport prices. My weekly transport bill has increased from £45 per week (taxis and public buses) to £55 for the same weekly journeys, thats a massive increase for 1 persons transport especially when i have no other means of transport (the majority is at 3am when i have left work).

James

Eric Bradley February 13, 2008

report reply to Eric Bradley

My wife and myself are both pensioners. The cost of everything, including fuel seems to be going up, except pensions of course. We spent 50 years working and paying our taxes, now they are taxing our pensions. We can manage OK at the moment but dread to think what life will be like a few years from now.

Brian Hughes February 13, 2008

report reply to Brian Hughes

I am retired, so all increases effect me because my pension does not go up by anything remotely like inflation, let alone RPI.
Interest has just been dropped despite the rising inflation, so what little savings I have are affected.
With regards to the supposed inflation being 2.2%, this is a cruel joke, you only have to look at how the figures are arrived at to see the blatant scam that the government are playing.
As part of the baby boom caused by the war, it angers me to have suffered all my school and working life, overcrowded classes, hard to find jobs, whilst the governments of the day squandered our taxes, instead of giving us a fair return on what we paid for our retirement, including the graduated pension scheme, they pay us a pittance.
If I only had my life again, I would pay nothing into government retirement schemes, they are a rip off, but our day will come at the next election, then I think there will be a shock. More old people mean more votes to those who will help us

Mark Brewer February 13, 2008

report reply to Mark Brewer

Darling doesn't need the extra 2p due to the high price of oil. But the Government come up with an excuse of it having environmental impact!!! Tax, tax, tax - just like old Labour but they do it in devious ways these days!!

Dan Willis February 13, 2008

report reply to Dan Willis

Don't the big superstores buy their petrol from BP/ESSO etc? So what good would boycotting the big boys really do?

At the end of the day - if you need your car/van/truck, you're going to need fuel - which means stopping somewhere to buy it and therefore pay what is charged. We can complain until the cows come home, but what can we REALLY do to make a difference?

Keith Rayment February 13, 2008

report reply to Keith Rayment

Please be advised that the reference below to '...info@bioukfuels.co.uk ...' is a duff address

Stephen Roger Ward February 13, 2008

report reply to Stephen Roger Ward

To Joe Public... -- what the frell has Incapacity Benefit to do with this? Those of us who are honest claimants (most of us, regardless of what the media 'tells' you...) of this couldn't survive without it (even though it's a pittance...); and are therefore hit hardest when the only real means we have of getting around gets more and more expensive each month (when IB only goes up by a minimal amount each year... -- and our right to claim it is challenged by both the Government and the ignorant public at every step...). You make it sound like claiming IB is an 'option'. Oh, I so wish it were. But to be short of fifty, and unable to bring in a decent salary to support your family, has got to be the most disheartening thing I know of... (never mind the chronic incapacity that got you there in the first place...).

Secondly: the congestion charge has become a farce. Be honest, it's a tax, now... -- and has absolutely nothing to do with "congestion" whatsoever. Because of it -- even though I now venture into central London less and less -- I have to suffer the indignity of travelling on the Tube, causing myself more pain than my condition already presents.... All I can say in its defence is that it is balanced by the low cost of using an Oyster card... -- but for how long?

(By the way: I own a 12-year-old 4x4.... Why? Because my disability was caused by three reckless drivers over a period of ten years; and I don't feel safe in anything smaller. Thanks, Ken!)

Mike Berman February 13, 2008

report reply to Mike Berman

I am finding it increasingly more difficult to travel from the village where I live to City centre shops so I have cut down on my spending in any unecessary way.
I suppose the shops I used to frequent are now doing less trade as a result of my friends and neighbours doing the same.

Nigel Coe February 13, 2008

report reply to Nigel Coe

i'm sorry Matt (post 12) i can't agree my friend, it wasn't an oil company that put 2p a litre on fuel last year or that are going to put another 2p on it come the 1st april why is diesel only 90p a litre in the rest of europe and ours is 110p because of tax pure and simple.

David Mcdonald February 13, 2008

report reply to David Mcdonald

it's not rocket science to see what's being done to us. only 6 years ago it cost me £60 for a return journey by car to london. we have estimated a similar journey, in the same make and size of vehicle would be closer to £80-£100. this is a 33-66% increase over 6 years, i.e. 5.6-11.2% annual
increase every year for 6 years. average wage increase: 2.2%. i rest my case.
david

Debby Olyott February 13, 2008

report reply to Debby Olyott

As acommunity nurse I'm now spending up to £200 a month, just to do my job. We have seen little increase in the petrol allowance community nurses receive to compensate the rising petrol prices.

David K Mcdonald February 13, 2008

report reply to David K Mcdonald

it's not rocket science to see what's being done to us. only 6 years ago it cost me £60 for a return journey by car to london. we have estimated a similar journey, in the same make and size of vehicle would be closer to £80-£100. this is a 33-66% increase over 6 years, i.e. 5.6-11.2% annual
increase every year for 6 years. average wage increase: 2.2%. i rest my case.
david

Geoff.monery February 13, 2008

report reply to Geoff.monery

I am afraid both the petrol companies and this government are far to greedy, one lot keep there shareholders happy at our expense, while the government are worse than the highway men of history(if caught they were hung).

George Keith Owens February 13, 2008

report reply to George Keith Owens

Well, You voted for him. Now you've got to suffer the consequences. Have you not realised yet that petrol tax is just another source of vandalisism on people's life style.
When he's bled dry this well, he'll only look around for the next. They have said they will on no account increase income tax. Do you still want to bet on this.
Incidentally, If you haven't guessed, I'm not talking about Alistair Darling.

Shane Norris February 13, 2008

report reply to Shane Norris

For the rest of this year DON'T purchase ANY petrol from the two biggest oil companies (which now are one), ESSO and BP.

If they are not selling any petrol, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit. But to have an impact we need to reach literally millions of Esso and BP petrol buyers. It's really simple to do!!

Now, don't wimp out on me at this point... keep reading and I'll explain how simple it is to reach millions of people!!
I am sending this note to a lot of people. If each of you send it to at least ten more (30 x 10 = 300)... and those 300 send it to at least ten more (300 x 10 = 3,000) .. and so on, by the time the message reaches the sixth generation of people, we will have reached over THREE MILLION consumers! If those three million get excited and pass this on to ten friends each, then 30 million people will have been contacted! If it goes one level further, you guessed it... ..
THREE HUNDRED MILLION PEOPLE!!!

Again, all You have to do is send this to 10 people. That's all.(and not buy at ESSO/BP) How long would all that take? If each of us sends this email out to ten more people within one day of receipt, all 300 MILLION people could conceivably be contacted within the next 8days!!! Acting together we can make a difference If this makes sense to you, please pass this message on.
PLEASE HOLD OUT UNTIL THEY LOWER THEIR PRICES TO THE 69p a LITRE RANGE
It's easy to make this happen. Just forward this email, and buy your petrol at Shell, Asda,Tesco, Sainsburys, Morrisons Jet etc. i.e. boycott BP and Esso.

Ruth Gosden February 13, 2008

report reply to Ruth Gosden

I am disabled and the car is my only way of getting out of the house. We are now starting to look at whether I really need to get out or whether to save the petrol for another day. My four walls are getting less attractive

Johnco February 13, 2008

report reply to Johnco

As a Haulier I have just done my last delivery into Europe as I can no longer compete with the prices charged by foreign transport companies who pay a lot less for fuel in their countries, thankyou Gordon Brown.

Matt Harvey February 13, 2008

report reply to Matt Harvey

Everything is going up, and yes it's because fuel prices are rising. It's not like there is particularly anything that we can ask the government to do about it though. Iraq is still raging (despite what anyone says), Hugo Chavez is threatening to cut oil supplies to the US, Ukraine owes Gazprom $1.5bn for natural gas, and we're all facing recession.

By cutting fuel prices now, the only option is to find that money from somewhere else, and 2p on fuel is a very easy way to pass the need for extra cash through the entire population (hence why everything is going up). If you tried to find it somewhere else, god knows what they'll do.

What does annoy me is that Shell have record profits AGAIN this year. They aren't making barely anything at the pumps, but they are making it by finding new oil and providing extra extraction plants. For me these things go hand in hand, and they should be making a loss at the pumps given how much profit they're making elsewhere (I think around $20bn last year). Unless they're investing ALL of that into new propulsion methods (eg Hydrogen Cells) then I think they need to spread that profit back to their most affected consumers, rather than protecting their hugely profitable endeavours for the shareholders.

The government really isn't to blame here, fuel just costs that much at the moment. Duty is massive, but even if they reduce it to be in line with Europe we wouldn't notice that much difference.

Martin February 13, 2008

report reply to Martin

Just had a payrise at work immediately gobbled up by huge price increase in fuel, food. When fuel goes up its immediate unlike pay or other rises. look to cut Goverment ministers payrises!!!!!!!!!!!

Nigel Coe February 13, 2008

report reply to Nigel Coe

i absolutely agree i have a set ammount to spend on petrol each week the day is rapidly approaching when it will only get me to work 4 days a week instead of 5 then what will i do ask for shorter working hours i can just imagine the bosses reply to that. Nige.

Keith P February 13, 2008

report reply to Keith P

Everything is going up. Fuel is the latest money grabbing scheme from our trustworthy government. are we getting paid anymore? all we B*****s!!! is it a wonder that more and more people are losing their homes. I know if i have to paid out much more then ill be in the same position.

Mick Howes February 13, 2008

report reply to Mick Howes

Living in rural Dorset where public transport is minimal, I have to use my car to get to work 26 miles away. I am being penalized for working!! I tried to work out a public transport option, would take 2 hours to get to work, 2 changes of train,a bus, then a 10 min walk. Total cost per week? over £150, so that's not a realistic option is it!
All this guff about 'sending out the right message about green policies' is just an easy excuse to push up prices, and satisfy the greenies out there, who probably are too busy tree hugging to work anyway!! Gotta stop now, getting soooooo angry!!

Guy Field February 13, 2008

report reply to Guy Field

Another increase is absurd! All our bills keep going up so quickly its getting to a point where I am thinking of emigrating! Why does the fuel duty have to keep going up? Why cant it be kept the same or even drop a little. Can't they give us a break instead of bleeding us dry?

Fuel has gone up over 10p a litre in the last few months and the prices today are ridiculous. All that effort to keep prices below £1 a litre was worth it but as many predicted, as soon as the £1/litre barrier is broken the prices have rocketed. Is it not going to stop until fuel reaches £2/litre??

I sold my 2 litre petrol car to drive a small engined diesel car due to fuel prices and the recent increases are still hitting my pocket harder than I am happy with.

And after all this, how much will my wages go up this year? Not as much as the fuel, food and other bills have I bet!

Darren Barker February 13, 2008

report reply to Darren Barker

i got fed up with prices going up i have now switch to biodiesel fuel i now pay 97p a litre instead of 110.9 a litre for diesel if you want more info please feel free to visit info@bioukfuels.co.uk or call 0114 2445603

Keith Hilsdon February 13, 2008

report reply to Keith Hilsdon

THE COST OF CRUDE OIL HAS COME DOWN BUT HAS IT AT THE PUMPS NO BUT THEY ARE QUICK ENOUGH TO PUT IT UP WHEN THE PRICE RISES THERE SHOULD BE SOMEONE TO MAKE THIS AFFECTIVE

Asghar Hassanian February 13, 2008

report reply to Asghar Hassanian

We do not need to increase anymore tax on fuel as we have our own North sea oil, besides all the tax on fuel should be scraped

Not Peakoil February 13, 2008

report reply to Not Peakoil

The Mayor of London’s office has just confirmed changes to the city’s congestion charge that will sting owners of cars emitting more than 225g/km of carbon dioxide to the tune of £25-a-day.

The new congestion charge will come into force on October 27 2008. It is described by the London authority as “the world’s most ambitious scheme to reduce the contribution of urban traffic to greenhouse gasses”, and “a key part of the Mayor’s Climate Change Action Plan which aims to reduce London’s CO2 emissions by 60 per cent by 2025.”

Although suggestions had been made to the contrary, Mayor Ken Livingstone has been true to his word and will provide a 100 per cent discount to the charge for cars than emit less than 120g/km of CO2, and are EuroIV-emissions compliant. That means owners of the likes of the Mini Cooper D, VW Polo Bluemotion and Ford Fiesta TDCi, as well, as those of the Toyota Prius and Smart Fortwo, will be able to drive through London for free.

According to TfL statistics, 17 per cent of the cars that currently enter the charging zone are in VED tax band G, and will qualify for the £25 charge. Just 2 per cent using the zone are in tax bands A and B, and will therefore go free – but that figure is sure to rise once the changes come into effect.

If you drive a car registered before September 2001 with an engine bigger than 3000cc, you’ll also be subject to £25-a-day. Rather arbitrarily, that means if you drive a W-reg BMW M Coupe (which is a low, four-meter car, and therefore not a big contributor to congestion) you’ll have to pay £25-a-day, but a diesel-engined Range Rover of the same age would get in for just £8.

In justifying the change, Livingstone said: “nobody needs to damage the environment by driving a gas guzzling Chelsea Tractor in central London. The CO2 charge will encourage people to switch to cleaner vehicles, or public transport.”

“Those who choose to carry on driving the most polluting vehicles will help to pay for the environmental damage they cause. This is the “polluter pays” principal.”


THIS REPORT FINALY PROVES THAT THE FUEL DUTY HAS 0 TO DO WITH HELPING THE ENVIRONMENT. YOU STILL WONDER WHY INFLATION IS GOING UP?

Don`t worry while you moan and do nothing about things more of this is on its way.

Marks February 13, 2008

report reply to Marks

If 2p increase,is not implemented,where is Darling going to get the extra
cash that is needed.Non-doms,no, you and i.The super rich,slip away again.
To enjoy there lavish lifestyles at our expense.

Joe Public February 13, 2008

report reply to Joe Public

Yes I feel it. Rent is going up, council tax and worst of all the money spent to make money (transport).

Incapacity benefit is begining to look more and more attractive.

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