Ed Miliband being patronised by Harriet Harman's pink sign. Photo: Getty
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Beyond the pink bus: why we still need to talk about "women's issues"

The Labour women's campaign launch has been obscured by criticism of their pink bus. But ask yourself: would you rather be mildly patronised - or totally ignored?

The moment I saw the picture of the pink bus I knew Labour's women launch was doomed. I've been to enough vaguely feminist events to know that two questions inevitably crop up. First, why aren't any men involved with this? Second, isn't pointing out that women are disadvantaged in any way deeply patronising, because it paints them as helpless victims? To this, there has recently been added a third query: are there any women's issues at all, any more?

This challenge comes from both ends of the ideological spectrum. Libertarians assert that the pay gap exists because women "choose" to have children and damage their careers; and in any case shouldn't we be talking about parents' issues? Variations of "what about the men" ring through this argument: what about the men who look after children? What about male rape victims? What about male victims of domestic violence? What about male circumcision? From people who are in most other ways their polar opposites comes a similar challenge: not all women are biologically female, so isn't it exclusionary to mark childcare and vaginal rape and abortion out as women's issues?

My answer to both is the same. Yes, we often talk about "women" in ways which do not do justice to the variety and complexity of women's experiences. But to abandon the idea of "women's issues" entirely is to give up our ability to construct a coherent argument about the way that one section of society is silenced and discriminated against. If we refuse to acknowledge the existence of a system, we deprive ourselves of the way to make any kind of alliance to fight it. We are left like David Cameron, urging individual business leaders to pay their workers more while refusing to acknowledge the system that makes any rational economic actor exploit a disposable workforce with zero-hour contracts and attrition of their labour rights. 

Childcare should be a parenting issue - but it's not. More women than men stay home to look after children. More women than men face the inevitable setback in status and salary that this entails. Caring more generally follows the same pattern: 75 per cent of those who claim a carer's allowance are women. The vast majority of nurses are women. The vast majority of primary school teachers are women. In our culture, caring overwhelmingly means women's care. I would like this to change, but until it does, robbing us of the right to call it a "women's issue" is robbing us of the right to speak at all.

I also feel a touch of nausea about the way in which issues of "low salience" - things that it is impossible normally to get people to talk about - suddenly become vital. Male rape victims face just as much trauma as female ones, and they have to navigate a system which regards them as the exception (something women have had to do for decades in other areas). It is hugely disrespectful to their suffering to invoke it only to shut a feminist up. Similarly, if you've spent the last two years gaily ignoring the Let Toys Be Toys campaign don't have a Damascene conversion to the fact that pink for girls is patronising just because Harriet Harman annoys you.

So, back to the Labour women's launch. The first thing to note is that they had one at all - and not some grudging, shame-faced sop, either. Actual money has been spent on this, and it was symbolically held in Labour HQ at Brewers Green in Westminster. As Harman noted, "I've had to get to 64 before I can do this." My prospective colleague Stephen Bush notes that you could fit every female MP the Liberal Democrats have ever had into Labour's 16-seater Pink Bus. (They also missed the opportunity to have a women's campaign fronted by Lady Garden, which is a travesty.) You could fit all the Tories' female full Cabinet ministers into a family pedalo, or even a bobsled if one of them sprained an ankle and had to sit the excitement out.

That's unlikely to change in the next parliament. Labour's research shows that 24 per cent of the Conservative's candidates (both existing MPs and new entrants) are women. There are only 10 women standing in the 56 seats currently held by the Liberal Democrats. Eleven per cent of Ukip's candidates are women. For the Greens, it's 39 per cent and for the Scottish National Party (which also uses all-women shortlists) it's 37 per cent.

Much as it pains me to defend a party stupid enough to have a pink women's campaign bus, the only reason that female representation in parliament has reached its current dizzying heights - 22 per cent! - is because of Labour. And at least the party is trying to talk about the burden of care, equal pay, rape and domestic violence during the election campaign instead of repeating "long term economic plan" like their lives depend on it.

The pink bus was a terrible idea. But still, on balance, I'd rather be mildly patronised than totally ignored.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

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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?