A 2013 protest outside the commons in favour of same sex marriage. Image: Getty.
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The UK broke its own record for LGBT representation last week

We now have a record 32 out LGBT MPs in the House, but all are white, only six are women and none are trans.

Has Britain reached a post-homophobic state of grace? Or do the better angels of our nature just come out at election time? (A rarely stated thesis). While barely disguised homophobia continues to blight our schools, streets and screens, electoral politics seems to have reached a point where being a gay or straight barely registers on the hustings.

The last parliament was defined by the fight for marriage equality and its aftermath – especially David Cameron’s uneasy relationship on the issue with the rest of the Conservative party. Afterwards, there was a fear of backlash: a fear that Tory voters would punish the party for being too socially liberal, and Tory big-wigs would back away from installing candidates who were outside of the traditional mainstream. But these fears proved to be unfounded in 2015.

A quick analysis of last Thursday’s general election suggests that if there were votes withheld for candidates because they happened to be LGBT, they were more than made up for with votes won because the candidate was LGBT. In some places, being an out gay man or woman seems to have actually helped the candidate's personal vote. But the impression I gained from being on the doorsteps with LGBT candidates, from multiple parties and in both urban and suburban constituencies, was that, if it mattered at all, the candidates’ sexual orientation was of little consequence to the average voter. Crispin Blunt couldn’t recall a single person bringing the issue up in Reigate, while Simon Hughes was mobbed by adoring BME voters unfazed by long forgotten tabloid headlines. The only reported homophobia was the claim that Labour canvassers in Finchley and Golders Green had been telling Orthodox Jewish voters that the incumbent Tory MP, Mike Freer, was gay. The race was tight, and Ashcroft's polls had just put the parties neck and neck. But on the day, Freer increased his vote by 4,000 and enjoyed as comfortable a majority as in 2010.

The Conservatives put up more openly gay candidates than any other party: 39 men and three women. Of their 13 out MPs at dissolution, 12 stood for re-election and only one lost (Eric Ollerenshaw in Lancaster and Fleetwood) but his loss was made up for by the election of Ben Howlett in Bath. Howlett overcame a huge Liberal Democrat majority and was one of the sparkling Tory victories of the evening. A quick analysis of the 50 races where there were competitive LGBT candidates shows that Tory LGBT candidates performed considerably better than their straight colleagues. 72 per cent of them had larger vote share increases than the national trend, and on average their gains were three times the Tory average.  

Note: this map was produced before the final three SNP MPs were declared.

Labour did not take many seats from the Tories but of the 10 they did win, three were won by LGB candidates. Wes Streeting and Peter Kyle generated two of the biggest swings to Labour in Ilford North and Hove respectively, and Cat Smith’s victory in Lancaster and Fleetwood was one of the five head-to-heads where both major parties ran out LGB candidates. The nine incumbent Labour lesbian and gay MPs held on comfortably, and the party stood Gerald Jones in the safe seat of Merthyr Tydfil. In fact, Wales and Scotland are now the UK areas with the highest proportions of out gay MPs. The seven Scots and three Welsh were predominantly returned from working class constituencies struggling with life after mining and industrial decline.

Meanwhile, all four gay and bisexual Liberal Democrat MPs were ousted: David Laws (Yeovil), Simon Hughes (Bermondsey), Stephen Williams (Bristol West) and Stephen Gilbert (St. Austell and Newquay) - but they were swept away on a tide which had nothing to do with their work as constituency MPs. All of them polled better than they probably should have had any right to do.

The SNP sent shock waves through British politics last Thursday and on that wave rode in seven new LGB identifying MPs. They exemplify the demographic diversity that is LGBTQ Britain: ranging from the high profile Edinburgh QC Joanna Cherry to the 20 year old Glasgow University politics student Mhairi Black. Their parliamentary party is now 12.5 per cent LGBT, which means that the SNP have the highest proportion of LGBT MPs anywhere in the world. 

The 32 newly elected British MPs who identify as lesbian, gay or bisexual have set a new world record. They represent 4.9 per cent of the House, not far off the proportion of Brits estimated to be LGBT (between 5 and 7 per cent) The total far exceeds the levels of representation in countries where gay rights have been entrenched for decades: for example, there are currently twelve out MPs in the Swedish Riksdagen and ten in the Dutch Tweede Kamer. Thirteen of the new House of Commons members are Labour MPs, twelve are Conservatives and six SNP MPs (although those numbers are likely to rise as newly elected MPs feel comfortable enough to come out to the world beyond their immediate circle of family and friends). 

Remarkably there were 155 out LGBT candidates in May 2015 wearing the colours of all parties and in all parts of the country – 42 Tories, 39 Lib Dems, 36 Labour, 21 Greens, seven UKIP, seven SNP, three Plaid Cymru and one from the Alliance party of Northern Ireland. Every region of the UK had LGBT candidates and they were no more concentrated in urban areas than rural. Northern Ireland was, unsurprisingly, not a happy hunting ground for gay politicians with only one unsuccessful candidate, but more surprising the East of England was almost as unwelcoming with only two no-hoper candidates.

While the record number of LGB MPs is a win for diversity, internally the club is not as diverse as one might hope. There were only two lesbians in the last parliament, and while the number of women has tripled in 2015 they are still out-numbered by 26 men. All the LGB MPs in the last House of Commons were white, all in this House are white, and a full 153 of the 155 candidates were white. There were four out transgender candidates in the elections: he much heralded Emily Brothers for Labour in Sutton and Cheam who increased the Labour vote by over 4 per cent, Zoe O’Connell the Liberal Democrat in Maldon whose vote actually declined less than the national average, and Greens, Stella Gardiner (Bexleyheath) and Charlie Kiss (Islington South), who both increased their party share of the vote. Kiss, the only trans man in the election, actually increased the Green vote by 6 per cent which was twice the national average.

Maps compiled by Kieran Healy.

Professor Andrew Reynolds is director at the LGBT Representation and Rights Research Initiative at the University of North Carolina, Chapel Hill. 

Andrew Reynolds is a Professor of Political Science at the University of North Carolina, Chapel Hill and the Director of the UNC LGBTQ Representation and Rights Research Initiative.

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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?