It's not burdening our children with debt that should worry us

Leaving our children without assets is a far greater problem than "saddling" them with debt.

It is irresponsible to saddle our children with debt.

One of the most compelling, at least superficially, arguments for austerity. It is used globally; it resonates powerfully. After all, it appeals to the very best facets of human nature – the instinct to nurture; the wish to leave things better for future generations – and is, therefore, almost irresistible. But there are few things more dangerous than rhetoric designed to entangle the heart, while bypassing the brain.

Let us suppose that I knew, tomorrow I would be no more. The appointment has been made; the plane tickets to Geneva have been booked. If I were leaving behind my house to my child, encumbered as it is with a mortgage, would I worry? It is a huge amount of debt, but the house is worth almost double its mortgage. The interest is low. To look at that scenario and arrive at the conclusion I am “saddling my child with debt” would be highly irrational. I would have left them with positive equity.

It is illogical to assess the legacy we bequeath to the next generation, solely in terms of debt. Assets should form part of the equation.

This was precisely what our parents’ generation decided to do. And their parents’ before them. National debt, as a percentage of GDP, was much higher from the 20s to the 70s than it is now. But they made the positive choice of bequeathing it to us, as well as a world-class National Health Service, free education, thriving industry, bright prospects and a system of welfare which provided a safety net for the less fortunate.

Had they looked at debt in isolation, they would never have achieved any of these things. Luckily, they did not. They left us with positive equity.

The proposition put forward by the coalition government in support of their programme of cuts, is the bequest of a clean slate. In the current economic climate, however, a clean slate means clean of assets, not clear of debt.

With the economy stagnant or shrinking, the reality is that this government will fail to make a dent in the deficit and actually increase debt. According to the OBR our annual deficit is falling at exactly the same rate it was projected to do before any of these cuts. The national debt is projected to rise by a staggering half a trillion pounds, even by the most lenient of estimates. The OBR now admits that austerity is hurting the economy. The IMF now admits that austerity is hurting the economy.

On the other hand, there is another, even gloomier forecast. By squeezing ordinary people, by forcing them to remortgage, to use credit cards, to run to the nearest payday lender, private household debt is predicted to balloon by an additional half a trillion pounds.

So, forget this insidious idea that we might leave our children with a clean slate. It is fantasy. In fact, under this government, we will leave our children with at least one trillion more debt than we had in 2010. The only intelligent conversation to be had, is whether we leave our children with the assets, skills, environment and tools to manage that debt or not.

Not all asset stripping is fiscally responsible in the long term. Not every expense incurred results in debt. Off-the-cuff, misconceived policies to try and regulate a rampant energy industry are ample demonstration of that truth; a conservative government flailing in a futile attempt to control the profiteering which resulted from another conservative government’s privatisation programme.

We are paying through the nose, both in terms of tickets, subsidies and maintenance, for a rail network franchise system which is manifestly failing. Meanwhile, the part of the network which has been state-run for the last few years (as a result of the last botched franchise), is better and cheaper than it was in private hands and turning a profit.

We pay to bail out private banks, then complain that they are not lending to SMEs, when we actually part-own two of the biggest. Nationalisation is both a rational solution and a dirty word.

Meanwhile, we are allowing these failed experiments to go on, to expand even; the self-interested privatisation of the NHS, the cut-price sale of local council assets and social housing, the dismantling of the welfare state, the farming out of police and prison services, the poisonous influence of profit on our schools. Within five years, the UK will be spending less on public services than any developed nation.

Make no mistake. What is actually being proposed, is leaving our children with negative equity. The debt will still be there, but the assets will be gone. Important assets at that, the absence of which will translate into higher living costs, in perpetuity. The sale of state housing inflates rents. Lack of a welfare system deflates wages. Tuition fees enslave the next generation to financial institutions which we know to be corrupt. Healthcare bills are the single biggest cause of bankruptcy in the US.

Maybe this is the future that we genuinely want. But let us consider all the arguments, instead of wielding an axe at any expense with no thought of whether it is necessary or cost-effective. Let us look at debt in conjunction with the assets and values that would also form part of our bequest.

Our current predicament is precarious. Even more critical, then, to make rational, informed and brave choices - rather than terrified, ill-thought ones. For our sake and that of our children.

Demonstrators call for an end to the national debt outside Parliament last year. Photograph: Getty Images.

Greek-born, Alex Andreou has a background in law and economics. He runs the Sturdy Beggars Theatre Company and blogs here You can find him on twitter @sturdyalex

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In the 1980s, I went to a rally where Labour Party speakers shared the stage with men in balaclavas

The links between the Labour left and Irish republicanism are worth investigating.

A spat between Jeremy Corbyn’s henchfolk and Conor McGinn, the MP for St Helens North, caught my ear the other evening. McGinn was a guest on BBC Radio 4’s Westminster Hour, and he obligingly revisited the brouhaha for the listeners at home. Apparently, following an interview in May, in which McGinn called for Corbyn to “reach out beyond his comfort zone”, he was first threatened obliquely with the sack, then asked for a retraction (which he refused to give) and finally learned – from someone in the whips’ office – that his party leader was considering phoning up McGinn’s father to whip the errant whipper-in into line. On the programme, McGinn said: “The modus operandi that he [Corbyn] and the people around him were trying to do [sic], involving my family, was to isolate and ostracise me from them and from the community I am very proud to come from – which is an Irish nationalist community in south Armagh.”

Needless to say, the Labour leader’s office has continued to deny any such thing, but while we may nurture some suspicions about his behaviour, McGinn was also indulging in a little airbrushing when he described south Armagh as an “Irish ­nationalist community”. In the most recent elections, Newry and Armagh returned three Sinn Fein members to the Northern Ireland Assembly (as against one Social Democratic and Labour Party member) and one Sinn Fein MP to Westminster. When I last looked, Sinn Fein was still a republican, rather than a nationalist, party – something that McGinn should only be too well aware of, as the paternal hand that was putatively to have been lain on him belongs to Pat McGinn, the former Sinn Fein mayor of Newry and Armagh.

According to the Irish News, a “close friend” of the McGinns poured this cold water on the mini-conflagration: “Anybody who knows the McGinn family knows that Pat is very proud of Conor and that they remain very close.” The friend went on to opine: “He [Pat McGinn] found the whole notion of Corbyn phoning him totally ridiculous – as if Pat is going to criticise his son to save Jeremy Corbyn’s face. They would laugh about it were it not so sinister.”

“Sinister” does seem the mot juste. McGinn, Jr grew up in Bessbrook during the Troubles. I visited the village in the early 1990s on assignment. The skies were full of the chattering of British army Chinooks, and there were fake road signs in the hedgerows bearing pictograms of rifles and captioned: “Sniper at work”. South Armagh had been known for years as “bandit country”. There were army watchtowers standing sentinel in the dinky, green fields and checkpoints everywhere, manned by some of the thousands of the troops who had been deployed to fight what was, in effect, a low-level counter-insurgency war. Nationalist community, my foot.

What lies beneath the Corbyn-McGinn spat is the queered problematics of the ­relationship between the far left wing of the Labour Party and physical-force Irish republicanism. I also recall, during the hunger strikes of the early 1980s, going to a “Smash the H-Blocks” rally in Kilburn, north London, at which Labour Party speakers shared the stage with representatives from Sinn Fein, some of whom wore balaclavas and dark glasses to evade the telephoto lenses of the Met’s anti-terrorist squad.

The shape-shifting relationship between the “political wing” of the IRA and the men with sniper rifles in the south Armagh bocage was always of the essence of the conflict, allowing both sides a convenient fiction around which to posture publicly and privately negotiate. In choosing to appear on platforms with people who might or might not be terrorists, Labour leftists also sprinkled a little of their stardust on themselves: the “stardust” being the implication that they, too, under the right circumstances, might be capable of violence in pursuit of their political ends.

On the far right of British politics, Her Majesty’s Government and its apparatus are referred to derisively as “state”. There were various attempts in the 1970s and 1980s by far-right groupuscules to link up with the Ulster Freedom Fighters and other loyalist paramilitary organisations in their battle against “state”. All foundered on the obvious incompetence of the fascists. The situation on the far left was different. The socialist credentials of Sinn Fein/IRA were too threadbare for genuine expressions of solidarity, but there was a sort of tacit confidence-and-supply arrangement between these factions. The Labour far left provided the republicans with the confidence that, should an appropriately radical government be elected to Westminster, “state” would withdraw from Northern Ireland. What the republicans did for the mainland militants was to cloak them in their penumbra of darkness: without needing to call down on themselves the armed might of “state”, they could imply that they were willing to take it on, should the opportunity arise.

I don’t for a second believe that Corbyn was summoning up these ghosts of the insurrectionary dead when he either did or did not threaten to phone McGinn, Sr. But his supporters need to ask themselves what they’re getting into. Their leader, if he was to have remained true to the positions that he has espoused over many years, should have refused to sit as privy counsellor upon assuming his party office, and refused all the other mummery associated with the monarchical “state”. That he didn’t do so was surely a strategic decision. Such a position would make him utterly unelectable.

The snipers may not be at work in south Armagh just now – but there are rifles out there that could yet be dug up. I wouldn’t be surprised if some in Sinn Fein knew where they are, but one thing’s for certain: Corbyn hasn’t got a clue, bloody or otherwise. 

Will Self is an author and journalist. His books include Umbrella, Shark, The Book of Dave and The Butt. He writes the Madness of Crowds and Real Meals columns for the New Statesman.

This article first appeared in the 25 August 2016 issue of the New Statesman, Cameron: the legacy of a loser