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The Christchurch earthquake and the need for flexible thinking

As Melbourne debates the merits of the myki travel card and New Zealand recovers from disaster, some

As Melbourne debates the merits of the myki travel card and New Zealand recovers from disaster, some thoughts on George Osborne’s UK growth strategy.

Another week, another continent. I have been awake since 3.30am, having arrived in Melbourne, Australia, after the long haul from south-west Florida - a four-hour drive from my house to Orlando, followed by a five-and-a-half-hour flight to Los Angeles, then a 15-hour flight. It's not great for the body clock. And I'm only here for three days.

Taxi drivers, I find, can be a source of useful information about a local economy. The driver who picked me up from Melbourne Airport happily told me about the failings of the city's version of the London Oyster card, known as the "myki". He told me that it was no improvement on having clippies on the buses and trams, despite having cost many millions. He was right: the total cost of the system is around A$1.35bn (£840m), including A$494m for start-up and between A$50m and A$55m per year to run. It was scheduled to launch in March 2007 but is still not fully operational. On 28 December last year, the newly elected government in the state of Victoria announced that it would halt any further roll-out until an independent audit was completed.

My driver was irritated that the operators had been paid large bonuses even though the system wasn't working properly. Sound familiar? The Royal Bank of Scotland, whose biggest shareholder is the British government (and thus the taxpayer), has announced a loss of £1.1bn for 2010 but is paying out bonuses of £950m. Lloyds is also paying its retiring boss, Eric Daniels, a big bonus. The Deputy Prime Minister, Nick Clegg, had previously warned that the government would not stand on the sidelines if banks paid out lavish bonuses. Then he went skiing and "forgot" he was running the country.

Gold rush

Australia has prospered because it has dug up big chunks of its precious resources and shipped them to China. Employment is more than 6 per cent higher than it was at the beginning of 2008, while in the UK there has been a 1.3 per cent fall. And output is 5.5 per cent higher, compared to the UK's decline of 4 per cent. Yet the widespread flooding and the cyclone seem to have had an impact on an economy that had already started to slow. GDP growth was 1.2 per cent in the second quarter of 2010 but it fell sharply to 0.2 per cent in the third quarter. The moral of the story is that unexpected things happen and they are mostly bad.

But occasionally they can be good, as it was with the Victorian gold rush. On 20 July 1851, Thomas Peters found gold at what is now known as Specimen Gully. This find was announced in the Melbourne newspaper the Argus on 8 September 1851. Further discoveries were made in other parts of Victoria and the population of Melbourne grew swiftly as gold fever took hold. More immigrants leaving the UK in 1852 bought tickets to Melbourne than to any other destination in the world. The discovery of gold was good for employment. But economic policymakers are not usually so lucky.

On the journey over, I received an email from New Zealand's chief statistician, Geoff Bascand. He had news of a plan B. As a consequence of the earthquake in Christchurch, Statistics New Zealand has decided not to proceed with the census that was to take place on 8 March this year. Much of its census operations and staff are in Christchurch and the impact to their buildings and systems, Bascand said, "has been huge". It is hard to argue with his claim that: "Now is not the right time to be asking New Zealanders for information."

A third of the buildings in central Christ­church will need to be demolished and much of the city will be closed for months, at a time when New Zealand's economy, like Austra­lia's, is showing signs of slowing again. In 2009, GDP grew by 0.5 per cent, but in the third quarter of 2010 growth fell to -0.2 per cent. Then came the earthquake in September and now another. An economic stimulus plan to aid the city's recovery is to be announced shortly.

That brings me to the UK. The GDP figures for the fourth quarter of 2010 couldn't possibly be that bad, said the commentators when the data was first published before Christmas. How could fiscal austerity compromise growth? These were the same so-called experts who had failed to forecast a recession in the first place. Sadly, that growth was revised down on 25 February (just as it was in the previous three quarters of 2010), from a drop of 0.5 per cent to one of 0.6 per cent. That is before the VAT increase and the spending cuts hit.

And oil prices have spiked again, primarily over fears of further disruption in the Middle East. Libya is a relatively small producer and a number of countries, including Russia and Saudi Arabia, have offered to increase production to make up for any slack. The worry is that growth will decline as people cut their spending on non-oil items.

Waiting for a miracle

In a recent forecast, the Bank of England's Monetary Policy Committee (MPC) made it clear - wrongly, it appears - that output would be revised upwards. This is a repeat of errors that the MPC made in 2008, when it assumed, in what is called its "backcast", that the published data understated how well the economy was doing. Look at the mess that got us into.

The MPC's resident clown Andrew Sentance even voted for an interest rate increase of 50 basis points - from 0.5 to 1 per cent. Two other inflation "nutters", Martin Weale and Spencer Dale, voted for a smaller increase of 25 basis points. In a speech on 24 February, Sentance said: "The recovery in the UK domestic economy does appear to be continuing. Though we should expect to see fluctuations in the rate of growth as the recovery proceeds, most of the indicators from the early part of this year point to a resilient economy." Wrong, as usual. Fortunately, Sentance's term on the MPC ends after only three more meetings, before he can do lasting damage to the economy. Just think what an interest rate increase would do to all those people on tracker mortgages.

In the Budget on 23 March, George Osborne will have to lower his growth estimates. The only growth strategy he has right now is to hope for good news, such as a gold strike in the Welsh hills. U-turn, here we come. And David Cameron will then say that he is "really, really, really, really sorry" for another screw-up. The coalition is taking the myki.

David Blanchflower is NS economics editor and a professor at Dartmouth College, New Hampshire, and the University of Stirling

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

This article first appeared in the 07 March 2011 issue of the New Statesman, The great property swindle

Photo: Getty Images/AFP
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Why is the government charging more women for selling sex but turning a blind eye to buyers?

Since 2013, the number of women charged for selling sex gone up while the number of men charged for buying it has gone down.

It’s no surprise that prostitution policy is an area rarely visited by our legislators. It’s politically charged - a place where the need to prevent exploitation seemingly clashes head on with notions of liberal freedom; where there are few simple answers, a disputed evidence base, and no votes.

There’s also little evidence to suggest that MPs are different from the rest of the population - where one-in-ten men have purchased sex. It is little wonder therefore that our report on how the law should change, published in 2014, was the first major cross-party intervention on the subject in twenty years.

Some take the view that by removing all legal constraints, it will make the inherently exploitative trade of prostitution, safer. It’s not just me that questions this approach, though I accept that - equally - there’s no consensus that my preferred measure of criminalising the purchase of sex, while decriminalising the sale, would fundamentally change the scale of the problem.

Where all sides come together, however, is in the desire to see women diverted from the law courts. It is still possible for women (and it still is women; prostitution remains highly genderised) to go to prison for offences related to prostitution. Today, in 2015.

The total number of prosecutions for all prostitution offences in England and Wales has been decreasing since 2010, but not in a uniform fashion. This does not reflect a reduction in the size of the trade, or the violent nature of it.

There were once consistently more prosecutions for kerb crawling, profiting, and control of prostitution. But since 2013, there have been more prosecutions for soliciting or loitering than for profit from prostitution and kerb crawling each year.

In simple terms, offences committed by men with choice, freedom and money in their pocket are having a blind eye turned to them, while women are being targeted - and this trend is accelerating. In the law courts, and in prosecutions, it is the most vulnerable party in the transaction, who is taking the burden of criminality.

Take on-street sex buying as an example. In 2013-14 just 237 prosecutions were brought for kerb crawling, but there were 553 - more than twice as many - for loitering and soliciting.

There is a similar pattern in the 2014/15 figures: 227 charges for kerb crawling reached court, while 456 prosecutions were initiated against those who were selling sex. Just 83 prosecutions for control of prostitution, or ‘pimping’, were brought in that same year.

These are men and women on the same street. It takes a high level of liberal delusion to be convinced that prostitution is caused by a surge of women wishing to sell sex, rather than men who wish to buy it. And yet women who sell sex are the ones being targeted in our law courts, not the men that create the demand in the first place.

This situation even goes against the Crown Prosecution Service’s (CPS) own guidance. They say:

“Prostitution is addressed as sexual exploitation within the overall CPS Violence Against Women strategy because of its gendered nature… At the same time, those who abuse and exploit those involved in prostitution should be rigorously investigated and prosecuted, and enforcement activity focused on those who create the demand for on-street sex, such as kerb crawlers.”

Why then, is this happening? For the same reason it always does - in our criminal justice system stigmatised, poor women are valued less than moneyed, professional men.

My debate in Parliament today raises these issues directly with the government ministers responsible. But to be honest, the prosecution-bias against women in the courts isn’t the problem; merely a symptom of it. This bias will only be tackled when the law reflects the inherent harm of the trade to women, rather than sending the mixed signals of today.

That’s why I welcome the work of the End Demand Alliance, composed of over 40 organisations working to end the demand that fuels sex trafficking and prostitution, advocating the adoption of the Sex Buyer Law throughout the UK.

This would criminalise paying for sex, while decriminalising its sale and providing support and exiting services for those exploited by prostitution. Regardless of these big changes in the law, I don’t see how anyone can support the current state of affairs where there are more prosecutions brought against women than men involved in prostitution.

The authorities are targeting women because they're easier to arrest and prosecute. It goes against their own guidance, common sense and natural justice.
And it needs to stop.

Gavin Shuker is MP for Luton South and chair of the All Party Group on Prostitution and the Global Sex Trade.