Deflating the Big Fat Lie with Big Fat Facts

Anna Soubry, Minister for Public Health, says she can tell somebody's background just by looking at their weight. Such claims are not evidence-based, they are prejudice-based, and shouldn't be allowed to inform policy.

Yesterday Anna Soubry, Minister for Public Health, made some comments. As is the fashion these days, they were directed at poor people. Or rather, they were directed at rich people, who like to read about poor people and nod along.

Soubry explained how she “can almost now tell somebody’s background by their weight” when she walks around her constituency. She expressed surprise at the fact “there are houses where they don’t any longer have dining tables. They will sit in front of the telly and eat.” She spoke of her horror at seeing parents buying their children fast food and concluded that poor people should be more disciplined about teaching their children proper table manners.

The springboard for this tirade was a set of government figures which “showed that 24.3 per cent of the most deprived 11 year-olds in England were obese, compared with just 13.7 per cent of children from the wealthiest homes”. A highly selective sample – with no definition about what “most deprived” or “wealthiest homes” might include, looking at children of a very specific age.

In an unusual move, I shall try to intrude in this debate with – gasp! – some facts. An analysis of the most recent and most comprehensive set of figures, collated by the Department of Health, concludes that there is no obvious relationship between obesity and income. The groups with the lowest levels of obesity are poor men and rich women.

The dataset also strongly suggests that there is no obvious relationship between obesity and social class.

Now there is some evidence to suggest that there is a problem, specifically with children, looking at the same data. Currently 6.9 per cent of boys and 7.4 per cent of girls are obese - with the difference between the lower and higher classes 0.6 per cent and 1.5 per cent respectively for boys and girls.

However, there is a chasm as wide as the Grand Canyon between a study showing that a variation of values between 0.6 per cent and 1.5 per cent is beginning to emerge in children and the Minister for Public Health saying she can tell poor people's background just by looking at them because they're fat. And then going on to criticise them for not having dining tables – gosh, these people are animals!

It is not so long ago, I had to subsist on a bag of frozen fish fingers (40 for £2), two loaves of value bread (42p) and a bottle of cheap ketchup (31p) for twelve days. I remember it well. I remember the panic of running out towards the end and beginning to make my daily sandwich with three - not four – fish fingers, to make them stretch. So, when some affluent minister in a position of power, sits on her perfect Laura Ashley clad arse, in her perfect Laura Ashley dining room (paid for by our taxes), in her pink Laura Ashley life, and criticises me for not giving that splendid, nutritious meal the ceremony it deserves with a candlelit setting, I get very, very, very annoyed.

Soubry’s target is what she sees as bad parenthood and misinformed choices by poor people. Her comments about dining tables ignore the rising trend of limited affordable housing, with limited space in it, especially in urban areas. Her insufferable arrogance of condemning a parent buying their kid a MacDonalds, goes directly to her prejudice. Was it a rare treat? Was it a regular thing? Did she stalk this parent for a month to observe the family’s nutritional habits? Do you, when you make similar judgements?

The subtext of her solution – the only thing to do is speak to manufacturers – is steeped in the presumption that "these people are too thick to do the right thing, so we have to tackle it at the source".

Her understanding of the issues is derived from years of a sustained tabloid campaign to portray poor people as idle, fat, lazy, stupid, ignorant slobs, responsible for their own demise. And, possibly, a DVD box-set of The Royle Family. Once the premise is established in one's mind, of course, it is very easy to walk around a poor area and identify examples which confirm it. But that doesn't make it evidence and the policies which result from it are not evidence-based. They are prejudice-based.

For every poor fat woman she sees (and judges) on a high-street, there are two of regular weight, an undernourished person in the queue at the job center, an emaciated pensioner who has to chose between heat and food, and plenty of incredibly fit people who clean others’ houses and build others’ conservatories. Anna Soubry just notices them less. Perhaps she wants to. The evidence and statistics actually do not support her position. She is just airing her own anecdotes.

Critically, she does so, while her government dispenses with school dinners and closes health centres, public libraries and local swimming pools. Those are the real, the shocking facts, Ms Soubry.

There is conclusive evidence linking poverty to poor nutrition, which brings terrible health problems and a reduced life expectancy. So, in fact, the only way for Anna Soubry to effectively poor-people-spot would be to observe someone for a very long time and see if, having suffered insult and condescension by her miserable government at every turn, having had their public services pulled from under their feet and privatised, they then die relatively young of some horribly painful ailment.

Let's sort out the underlying problems, instead of further victimising their victims. Let's not become judgmental, twitchy-curtain neighbours, like Ms Soubry, and call it anything other than pure cruelty.


UPDATE – 25 January 2013

I watched Anna Soubry’s appearance on the BBC’s Question Time yesterday evening. Her unwillingness to admit that her comments were wrong could only be characterised as wilful; her aggressiveness towards anyone who suggests otherwise as defensive.

She refutes data collected over a period of years, which is indeed capable of showing trends. Instead she chooses to look at data from only 2012 (a snapshot), from England only (a snapshot of a snapshot), on 11-year-old children (a snapshot of a snapshot of a snapshot) and apply it to all poor people of all ages in all areas, because that serves her narrative. If that is not the essence of prejudice, I don’t know what is.

Obesity has dozens of factors which are well established contributors. There is a statistically significant link, between race and obesity (for example, see figures 6 and 7 in this study). Applying Ms Soubry’s logic, it would be acceptable to say that almost all Black Caribbean people are fat. There is a statistically significant link between people with sedentary jobs and obesity (for example, see this report). Does this mean Ms Soubry can spot almost all office workers at the beach? There is evidence that working long hours and overtime may increase the risk of obesity (from a study conducted on nursing staff). Does it follow that Ian Duncan Smith can spot strivers by looking at their butts?

It is incontrovertible that deprivation is linked to malnutrition with all the health problems that may bring. One of them is being overweight. Another is being underweight. Another is having skin problems from vitamin deficiencies. Applying Ms Soubry’s logic, poor people must almost all be fat AND thin AND spotty. Also, almost nobody who is not poor is fat or thin or spotty.

I admire her motivation to tackle the food industry. The fact that she does not see the flaw in the logic of her damaging Daily Mail rhetoric, however, is deeply worrying.

Anna Soubry was just airing her anecdotes, not citing any actual evidence. 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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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?