BBC plans will hijack and homogenise local radio

Shutting down LGBT, Irish and Jewish community radio programmes in Manchester won't even save any money.

The BBC is a broadcasting bastion of equality and diversity, willing to put community needs before commercial success – or so it self-deceives. Not so long ago, the Asian Network and BBC6Music radio channels were saved from cost-cutting measures by campaigners who accused the ‘corporate media barons’ of betraying their audiences. Now the Beeb has come up with another such scheme that completely undermines its ethics and lets down local licence fee-payers. Only this time, there’s actually no money to be saved.

In 2006, three Greater Manchester MPs called on parliament to protect three community radio programmes hosted on BBC Manchester (then known as GMR- Greater Manchester Radio) that were facing the chop. The programmes in question were Gay Talk, It’s Kosher, and The Parlour - dedicated respectively to the local LGBT, Jewish and Irish communities. The then Lib Dem MP for Rochdale, Paul Rowen, who tabled an early day motion, and fellow yellows John Leech and Mark Hunter, joined a cohort of campaigners and the shows were saved.

Six years later and the programmes have different names but are once again under threat. As part of a cost-saving, streamlining measure, LGBT Citizen Manchester, Jewish Citizen Manchester and Irish Citizen Manchester are to be replaced with a three-hour syndicated show called All Around England. Despite LGBT Citizen and Jewish Citizen Manchester being the only dedicated representations of either minority across BBC Radio, and Citizen Irish now the longest-running Irish-specific show (at 27 years, no less) on BBC radio, the programmes will not be rescheduled for broadcast anywhere else on either BBC Manchester or the national network.

Earlier in the year, the BBC Trust, which must approve all of the corporation’s spending, rejected proposed cuts of more than £15 million to local radio submitted by the Executive as part of its ‘Delivery Quality First’ (DQF) savings strategy. A report on local radio, authored by an independent media consultant John Myers, concluded that the maximum savings that could be made without affecting quality were around just £9 million. The Executive revised its plans and the Trust then approved them. But Delivering Quality First, cited as the reason for the change to Monday evening scheduling hardly applies in the case of these community programmes where the presenters and programme makers are all volunteers, working with a budget of less than £70 a week. How then can the long-established, expertly informed and almost entirely cost-free LGBT, Jewish and Irish Citizen programmes be anything other than excellent value? 

John Leech is back on the campaign trail and, on behalf of his constituents, has written to Director General Mark Thompson requesting that the BBC justify the decision. Thompson’s response, says Leech, is "frankly ridiculous". Citing cost savings as a core reason for the decision, Thompson also apparently asserts that mainstream BBC radio programmes will be able to absorb the content of the community shows in question.

There is an argument within the organisation that dedicated hours marginalise rather than incorporate minorities. But the BBC does not apply this logic to the Asian network, which is to receive a £1 million reinvestment as part of the same DQS strategy. Surely a combination of both more mainstream and dedicated coverage is what is needed. Debates within the LGBT, Irish or Jewish communities are unlikely to be the focus of a Today programme debate, and it’s hard to believe that issues such as lesbian health, or how to negotiate Shabbat in 21st-century Britain will be covered elsewhere at all.

What’s more, there is a sense that some minorities deserve more coverage than others. The gay, Irish and Jewish communities have played an integral part in local Manchester life since the 1800s, as have the Chinese, Asian and Black communities. Yet only the programmes dedicated to the first three minorities have been deemed extraneous. Back in March, Broadcast magazine reported that the BBC planned to plough the £4 million it saved in reduced retransmission fees from BskyB back into local radio. But these much-loved community programmes are clearly not deserving candidates for the freed-up funds.

When barely a week goes by without a media debate on gay marriage, and in the year that London hosts World Pride, the axing of Citizen LGBT seems a particularly bizarre move, if only in terms of topicality. The success of commercial LGBT radio stations such as Gaydar may act as a disincentive to launch a programme on the national network (the last such show, Out this Week, which won a Gold Sony Award in 1995, was axed four years later and has not been replaced since). But the audience demographics of commercial and local LGBT radio are quite different, with local listeners tending to be over the age of 45. Considering that Myers’s report on local radio concluded that, currently ‘the biggest loser is the older demographic’, this only seems to support the case for protecting Citizen LGBT.

Elsewhere, the BBC seems overly anxious to the point of obsessed with its gay-friendly credentials. In 2010, it commissioned both an internal report and a public consultation into LGB representation. And its current diversity strategy makes 24 references to ‘gay’, another 24 to ‘trans’, while just three to ‘Jewish’ and none at all to ‘Irish’.

The BBC’s plans say as much about the hijacking and homogenising of local radio as they do about the BBC’s inconsistent approach to diversity. "It’s completely oppositional to the government’s idea of localism", says Leech, who has been approached in particular by many of this Jewish constituents, now demanding a meeting with the corporation. The LGBT and Irish communities have yet to similarly assemble. In the meantime, Leech is preparing to table another early day motion.

If the BBC is determined to streamline Monday night local programming with its syndicated Radio England swap-in, it should at the very least honour its commitment to diversity by offering each of the specialist community shows a DAB or online-only radio slot, or moving them to the weekend where Indus and Chinatown (the programmes dedicated to the local Asian and Chinese communities) remain unscathed. This is an organisation that prides itself on representing its licence fee payers. It is danger of forgetting thousands of them exist at all.

The view through the gate at Broadcasting House in London. Photograph: Getty Images

Nichi Hodgson is a writer and broadcaster specialising in sexual politics, censorship, and  human rights. Her first book, Bound To You, published by Hodder & Stoughton, is out now. She tweets @NichiHodgson.

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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?