The case for the Criminalisation of the Purchase of Sex Bill

Rhoda Grant MSP explains why she thinks the arguments made against the Criminalisation of the Purchase of Sex Bill are flawed.

On the 29 May I published the results of the consultation for my proposed Bill on the criminalisation of the purchase of sex. The respondents were overwhelmingly, 80 per cent, in favour of this Bill. Since its publication I have been continually attacked by those against the Bill who have claimed that I have misrepresented the breadth of support. In fact they have presented a number of falsehoods about the Bill via a number of platforms including this one. I find myself constantly defending my position against unfounded allegations and yet no-one has properly questioned the assertions made by the "Sex Workers’ Lobby". I find this baffling and therefore would like to take the opportunity to address their arguments.

I recently received this from an exited prostitute:

The only way to describe my experience was HELL it’s like you are selling your soul over to the devil when you get into prostitution, the devils being…… ,  your freedom gets taken away completely, you automatically become a dolly money making machine for them and while working for…… you were reminded every day that you’re worthless and couldn't do better in life apart from prostitution….people are not aware of what happens  behind closed doors in the brothel ....the minute you walk in you are scared for life ...it’s like being raped 10 times a day and pimps telling you its ok ??? You lose everything dignity, Identity, respect and happiness.

This is by no means a one off case but the daily reality for many prostitutes. With this knowledge I am expected to turn a blind eye in order that those who profit from and cause this misery can continue their activity unrestrained. I cannot.

The current laws surrounding prostitution penalise women and only deal with public nuisance – none of them protect those who are prostituted. The Bill I propose is for the criminalisation of the purchase of sex which aims to redress this imbalance in our current laws. In no other circumstance does our law criminalise the victim but not the perpetrator! The purpose of this legislation would be to decrease demand and thereby begin to tackle an industry that preys on vulnerable people.

My consultation proved that a wide range of society agrees with me, including NHS Scotland, many Violence Against Women partnerships and organisations that provide support to working prostitutes. I do not just have support from feminist groups and religious organisations as my opponents have suggested. This is just one of many false allegations I have had to defend against, such as the suggestion that I have ignored the views of those who work and have worked in prostitution. This is again not true; the pro-lobby have simply ignored the supportive responses I received from women that have exited prostitution. Indeed, I have also met with a wide range of people including working prostitutes and other individuals involved with support organisations.       

There has been little scrutiny of the position put forward by the "Sex Workers’ Lobby". In particular, this lobby has made two adamant petitions, one for decriminalisation or legislation for the industry and the other that said industry should be allowed to regulate itself. Their argument for self-regulation is that they understand the industry best and are therefore best equipped to tackle abuses. There is no evidence to support this argument as all reports indicate that abuse is rampant within the industry. They suggest that "clients" are best placed to report abuse. However these clients have little concern for prostitutes. We would need evidence to demonstrate that they are reporting instances of trafficking in great numbers and where is it?  Legislation needs to be implemented that protects vulnerable people against organisations and individuals that profit from them. No industry can successfully self-regulate because it is in its interest to make profits.  

However, I would also like to challenge the notion that decriminalisation or legislation would protect vulnerable people being abused in this industry. The oft-cited example is New Zealand which has decriminalised all aspects of the sex industry. There are calls to introduce this model here. However, social policy cannot be looked at in isolation and New Zealand exists in a very different context to us. Their immigration polices help to ensure that people who enter the country are protected through a buddy scheme. The "Sex Workers’ Lobby" rarely acknowledges the examples closer to home, such as the Netherlands and Germany, which have tried less successfully to legalise and regulate the industry. It simply has not worked; Amsterdam has acknowledged that there is an huge illegal market and that women are still being abused. Looking at the UNODC report on trafficking it is clear that The Netherlands is seen as a more attractive destination than Sweden. The most conservative estimate is that 8 per cent out of the entire industry is comprised of trafficked individuals - that is more than 1,000 people, but it could be many more. This does not take into account the huge number of people coerced into the industry due to poverty. There is a similar story in Germany, a recent documentary into the industry revealed that decriminalisation has increased demand and actually made sex cheaper. The brothel owners are the people benefiting from this, not the prostitutes.

It has been claimed that Human Rights Groups and the UN have called for the decriminalisation of prostitution and that my Bill is going against them. This again is not the full story. My Bill is not criminalising the women (and men) being prostituted, but rather the clients that are fuelling the industry. The organisations quoted state that they are against the increased criminalisation of victims of this industry - so am I!  

I do not claim that my Bill would be a silver bullet in tackling the abuse of prostitution. It needs to be coupled with greater education, more exit services and initiatives that help to tackle the vast inequalities that still remain in our society that coerce people into prostitution. It is clear to me that dealing with demand will help. The "Sex Workers’ Lobby’s" arguments against my Bill need to be scrutinised and we should ask how their arguments are actually going to help protect those vulnerable people who are being repeatedly abused on a daily basis. Is it in their financial interest that this abuse continues?

Rhoda Grant is the Labour Member of the Scottish Parliament for the Highlands and Islands

The Scottish Parliament. Photograph: Getty Images
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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?