Cameron wants to reduce private debt - but when and how?

A rapid repayment of debt is a recipe for recession, not recovery.

According to reports this morning, David Cameron will use his conference speech this afternoon to call on Britain's households to pay down their debts. He will say that dealing with debt means not just paying down public debt but also "households - all of us - paying off the credit card and store card bills." Such comments would go beyond the government's existing argument about the importance of dealing with the public deficit to an argument that about reducing the UK's levels of personal debt.

What are we to make of this new message? In one sense it fits with the government's wider narrative of Britain having maxed out the nation's credit card. In this respect, Cameron's comments are a statement of the obvious, albeit an important one. The UK's household debt levels remain crushingly high both by historical and international standards. Sooner or later it's vital that they come down. The Prime Minister is also right to say that this was no ordinary recession, and that this will be no ordinary recovery.

But in another sense the comments are a dramatic and risky escalation of the government's argument on debt. That's because, although they fit the government's story, they run counter to the economic logic that underlies the current forecasts for UK recovery. As we pointed out earlier this year, the most recent forecasts from the Office Budget of Responsibility, published in March, say that the UK's stock of personal debt will rise, not fall, in the coming years - and not by a little but by a lot. The OBR projects that household debt will grow from £1.6 trillion in 2011 to £2.1 trillion in 2015, a rise from 160 percent of household disposable income to 175 percent. That growth is expected to sit alongside low savings, with the ratio of household saving to disposable income falling to roughly 3.5 percent - half its average over the past 50 years.

In the current economic climate, it's hard to overstate the importance of this difference of opinion over what will - or what should - happen to household debt. Put simply, the OBR's projections for growth rest on their forecasts for household consumption, which rest on their forecasts for household debt. If the OBR were to be proved wrong on debt - if it were to fall rather than rise - then their forecasts for consumption would presumably need to be downgraded, as would their forecasts for growth.

The following chart puts this is all into stark perspective. In all recent recessions in the UK, consumption growth had returned at this point, airlifting the economy to recovery. By contrast, today's trends in household consumption are a millstone around the neck of the economy.

Household consumption following the onset of recession
% fall in real total household consumption

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As well as running against OBR forecasts, the Prime Minister's message doesn't chime with the current reality of the household behaviour. Savings are currently falling not rising. The most recent data revealed that the household savings ratio had dipped from 5.1 to 4.6 percent. A recent poll carried out for the Resolution Foundation by ipsos MORI helped to explain why: almost half of all people on low-to-middle incomes now say they are running out of cash every month, and more than one in four say they're unable to make regular savings. People aren't overspending - they are reducing their savings just to stay afloat.

Of course, none of this is to deny that private debt must fall. The question is: when and how? Reducing the UK's stock of personal debt is likely to be a slow process. It needs to take place via a careful paying down of bills on the back of a recovery of real earnings, enabling families to save a bit more without immediate and dramatic reductions in consumption. The alternative option - a rapid repayment of debt at a time of falling incomes, fragile consumption, rapidly weakening export markets, and sharp public sector cuts - is a recipe for recession, not recovery. The Prime Minister should be careful what he wishes for.

Reuters/New Statesman composite.
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When it comes to social media, we all have a responsibility to avoid sharing upsetting images

If Twitter is the new journalism, we are all editors – and responsible for treating our fellow humans with dignity.

“I wish I hadn’t seen that”, my colleague says from across the desk. It’s been an hour since the first reports came in of a shooting outside Parliament, and the news agency Reuters has started posting photographs of injured people, knocked down by the terrorist as he drove across Westminster Bridge.

In one, a brunette woman leans over a victim whose blood is beginning to stain the wet pavement. Lying on her back, she is framed by scattered postcards sold for tourists which have been knocked to the floor. She is clutching the arm of the woman helping her, but her eyes are staring dead into the photographer’s lens.

Another photograph – the one that my colleague is referring to – disturbs me even more: a man who has fallen (or been pushed?) off the bridge onto a stairwell. He is face down in a pool of blood, his left leg at an unnatural angle. It is impossible to tell if he is alive or not.

Briefly, before I scroll past, I wonder if someone, somewhere is seeing the same picture and experiencing a shock of recognition as they recognise their friend’s clothes.

And then there is one picture which I now cannot find on Twitter, but which, lying in bed last night, I could not stop thinking of: a woman’s legs extended from under the wheel of a bus, her skirt hiked up to show her underwear, her shoes missing.

We are a desk of journalists covering an attack on the Houses of Parliament, so I keep scrolling. It is only later, in an article by the Telegraph, that I learn a junior doctor has declared the woman dead.

Of course, the shock of seeing images like these is nothing compared to what war reporters, doctors or police go through on a regular basis. But a 2015 study at the University of Toronto found that extended exposure to violent or disturbing material can have a severe effect on journalists’ mental health.

The impact can be particularly confusing when one does not anticipate seeing violence.On social media, we increasingly encounter images this way: without warning and without a chance to steel ourselves. This is particularly a problem when it comes to members of the public, whose jobs don’t require them to look at shocking material but who can nevertheless be exposed to it just by virtue of using a social media network.

It is for this reason that, shortly after Reuters published their photographs of the Westminster victims, prominent journalists began posting asking their colleagues not to retweet them. Some protested the fact that Reuters had published them at all.

In today’s media landscape, news moves fast and social media faster. Where a picture editor would have previously had until their print deadline to decide which images to run, now photographers are able to send their work back to the office almost instantaneously, and editors must make a snap decision about what to release.

Deciding what images to use can be a difficult call – especially under pressure. On the one hand, there is the urge to not turn away, to bear witness to the full magnitude of what has happened, even if it is shocking and upsetting. On the other, there is the need to treat fellow human beings with dignity, and particularly to avoid, where possible, showing images of victims whose families have not yet been informed.

Social media makes this process even more difficult. Once released online, photographs of the Westminster attack were quickly saved and re-posted by private individuals, stripped of context or warning. One can choose not to follow the Reuters Pictures account, but one cannot necessarily avoid seeing an image once it is being retweeted, reposted and recycled by private accounts.

As the line between traditional news and social media blurs and we increasingly become participants in the news, as well as consumers of it, our sense of responsibility also shifts. On Twitter, we are our own editors, each charged with making sure we extend dignity to our fellow humans, even – especially – when the news is dramatic and fast-moving.

I was glad, this morning, to encounter fewer and fewer photographs – to not see the girl lying under the bus again. But at 3am last night, I thought about her, and about her family; about them knowing that journalists on desks across Britain had seen up their loved one’s skirt during the last moments of her life. It was, without putting too fine a point on it, no way to encounter a fellow human being.

Over the next few days, we will find out more about who the victims were. The media will release images of them in happier times, tell us about their jobs and careers and children – as is already happening with Keith Palmer, the policeman who we now know died on the Parliamentary Estate.

It is those images which I hope will be shared: not just as a way to resist fear, but as a way of acknowledging them as more than victims – of forging a different connection, based not in horror and voyeurism, but in a small moment of shared humanity.

There is no shame in being affected by graphic images, however removed one “ought” to feel. If you would like someone to talk to, Mind can provide details of local services.

The BBC also provides advice for those upset by the news.

Find out how to turn off Twitter image previews here.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland