What's wrong with a Parliament made of Tweedledees and Tweedledums?

David Nuttall may have ridiculed the idea of job-sharing MPs, but a new system could restore faith in British politics.

I don’t think it would be the most controversial statement to suggest that MPs are not popular creatures. They weren't before news came out their expenses were at a record high, and they certainly aren't after. Whisper the word “MP” in a crowd and you will soon get the impression most of the public would like their representatives dropped to minimum wage, and the spare money spent on a giant stick for voters to take turns to poke them with.

That’s one reason why job-sharing – the idea of two MPs literally sharing the job – has always seemed against the grain. Voters aren’t keen on the MPs they’ve got, so a move that means there’d be more of them might not go down that well. In a way, it's a bit like the political equivalent of telling someone you’ve got a rat in your kitchen and them responding, “Oh that’s terrible… Would you like another?”

It’s refreshing, then, that new research shows, actually, voters aren’t that fussed about having job-sharing MPs (feelings on rats in kitchens to come later.) Philip Cowley, Professor of Parliamentary Government at the University of Nottingham, and Dr Rosie Campbell, Senior Lecturer in Politics at Birkbeck, University of London, found that only a minority actively opposed the idea. Moreover, once the reasons were explained – for instance, it could help more disabled people or women into power – the number of people saying they’d vote for a job-sharing candidate outnumbered those who wouldn’t. And when hypothetical descriptions were given (such as being approachable or their background before politics), what a candidate was like proved more significant to voters than whether they were by themselves or came as a pair. Which seems quite logical if you consider how you’d feel choosing between one Iain Duncan Smith and two people with a sense of reality (or indeed, terrifyingly, two Iain Duncan Smiths).

Done well, job-sharing could be like two-for-the-price-of-one. Of course, if you believe that politicians are inept, corrupt wasters then you’d be getting double the lot of inept, corrupt wasters. Which is the opposite of good maths. But if you believe that, actually, most MPs are fairly hardworking, decent humans doing a moderately tough job for (at least in part) some sort of civic purpose, then getting twice as much of that sounds a good deal. More to the point, you’d have embraced a mechanism that means odds are on, those two MPs would, for once, be outside the usual clique of advantage – may well be “normals",  as they are so affectionately called.

Whichever way you look at it, we’ve got a disgustingly unrepresentative Parliament. Rich white men are consistently the ones in power and, unless you believe that sort of arbitrarily chosen type of person happens to be the most capable, there are obviously mechanisms that are keeping everyone else out. One of those is the demanding hours: hours that are impossible for many people who are disabled, have children, or have other work or voluntary commitments to meet. The type of people who, funnily enough, voters might be more drawn to in the first place.

Other, bigger changes are needed to help fix this; for instance, more all-women short-lists (and while we’re at it, addressing why women are still the ones whose careers are much more commonly affected by becoming a parent.) But job-sharing, once you get past the practicalities, seems like a good option.

The Greens have already come out as supporting it, the Liberal Democrats have produced a policy paper for debate at Spring conference, Labour backbencher John McDonnell has even put forward a bill on it. Perhaps now voters have been shown to be open to the idea, Parties might start to really do something about it. After all, a by-product of improved representation may be getting more of the electorate onside – by letting in the sort of people voters have been asking for all along. People who have “real jobs” in the local area, as opposed to career politicians with a knowledge of PR. Disabled people, not shut out of work, who can represent millions like them. Women who are juggling work and childcare. Or as David Nuttal MP put it, “a Parliament made of Tweedledees and Tweedledums.”

There’s an ever-growing perception of MPs as an alien species, one that should be punished with uncompetitive income and general misery. As Party conference season starts and innocent cities and beaches are infested, perhaps it’s time the political elite, like voters, start thinking about fresh ideas. Why not job-sharing? Tweedledees and Tweedledums might make an improved face for British politics.

 

@frances__ryan 
http://differentprinciples.co.uk/about/

 

People walk past the Houses of Parliament in the wake of the expenses scandal. Image: Getty

Frances Ryan is a journalist and political researcher. She writes regularly for the Guardian, New Statesman, and others on disability, feminism, and most areas of equality you throw at her. She has a doctorate in inequality in education. Her website is here.

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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?