Nicky Morgan voted against same-sex marriage partly because of her Christian faith. Photo: Getty
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Why does an MP’s moral code matter more than anyone else’s?

Faith doesn’t justify voting for inequality or taking the rights of minorities.

They say politics and morals don’t always go together. With new education secretary Nicky Morgan caught between her self-declared Christian beliefs and her responsibility to do her job, it seems (for albeit different reasons) that old adage might be right.

What’s an MP to do with their personal moral code? I imagine it’s genuinely difficult to leave your private faith at home (your concerns over gay relationships aptly in the bedroom, your desire to force women to give birth slotted on the kitchen table.) The problem is, by the nature of being an MP, your private faith is actually rather public: be it for abortion, gay rights, or assisted dying – when it comes to “moral legislation”, you get to inflict your personal beliefs on the rest of the country.  

It’s not as if these things don’t matter. Morgan is currently a women’s minister who doesn’t believe in a woman’s right to control her own body, and an education secretary and equalities minister briefed to tackle homophobic bullying in schools who’s voted to try and ensure gay children don’t grow up to be equal.

That she based those votes on her reading of a religious text as well as the legislation does not make it better. Even in a widely secular country, if a MPs’ belief comes from religion, we still seem expected to make special allowances for it. An atheist minister voting against government gay rights legislation would be a disloyal homophobe. Morgan doing it was her following her “Christian beliefs”. We don’t seem to let this happen to other parts of government. Why is policy about sex or love different than that on education or the economy? If Iain Duncan Smith told me he found a page at the back of the Bible that said God wanted the lame shipped onto the Work Programme, I’d be no more inclined to support it or respectfully disagree. Religion doesn’t make a bad policy better. Faith doesn’t justify voting for inequality or taking the rights of minorities. 

It reminds me of the Christian Relate counsellor going to court over refusing to do what he was paid for if it involved gay couples. Except, he was sacked rather than promoted. The judge at the time said legislation for the protection of views held purely on religious grounds couldn’t be justified; it was irrational, he said, and “also divisive, capricious and arbitrary”. Our MPs, apparently, work by different standards.

It’s more common that I think we often notice. Set to be debated in the Lords this week, the government has already said it’ll allow MPs a free vote when the Assisted Dying Bill gets to them. This is standard for abortion votes. Being a Member of Parliament sees your opinion on other people’s bodies matter – and when it comes to “policies of conscience” you get to listen to yours and use it to tell the rest of us what to do.  

It translates to how parts of the media report on the policies. This week began with the Daily Express reporting “MP outrage” over one such issue: the case of an abortion at 39 weeks. It was an entirely legal medical procedure as the pregnancy either carried “a grave risk to the life of the mother” or had “a severe abnormality” but this sort of detail wasn’t overly important. What mattered was how our MPs felt about it.

“We have a Jekyll and Hyde approach to disability,” said Labour MP Rob Flello. “On one hand the entire country can be united in praise of paralympians. On the other we can permit the abortion of children at nine months simply for the crime of having a disability. This law desperately needs some sanity.”

No matter that none of that makes any sort of sense, Flello gets to say those words out loud – and (thank you, democracy), if legislation to reduce abortion rights got to Parliament, vote nonsense into law. 

It isn’t just the privilege we give religion that’s the problem, it’s the lack of respect we give equality. I for one blame democracy. And society. Every last one us. It’s only when we allow the right to control our own lives to be up for debate that what an MP thinks of it matters. How is my right to marry or have a child or not even a legal question at this point? Take politics out of a woman’s body, a gay honeymoon, or even a deathbed. Nicky Morgan and her ilk can then believe whatever they like.

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?