The Reverend Libby Lane, the new Bishop of Stockport.
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Meet Libby Lane, the Church of England’s first woman bishop

After decades of wrangling, the Church of England has finally appointed its first woman bishop. Caroline Crampton went to meet Reverend Libby Lane, the new Bishop of Stockport.

Libby Lane is having a strange day. Laughing slightly awkwardly as she stands in a flower bed in the carpark of the YMCA in Crewe, she is waiting for someone to bring her a hard hat so that she can crouch down in the dirt and be filmed laying a brick. The white headgear finally arrives (“it’s a bit pontifical!” someone jokes) and she jams it on before squatting down and giving the assembled photographers what they came here for – a shot of the Church of England’s first woman bishop getting her hands dirty.

This has all happened very fast. Just over a month ago, on 17 November, the general synod adopted legislation that allows women to become bishops. Four weeks later, Lane was appointed as the Bishop of Stockport. The position has been vacant since May, and I’m told that although three “excellent” and “well-qualified” male candidates had been interviewed earlier in the year, none were felt to be right for the post. Fortuitously, the new legislation last month meant Lane suddenly became eligible, and after completing the interview process, she got the job. After all, this is home turf for her – as she has been the vicar for the nearby St Peter’s Hale and St Elizabeth’s Ashley since 2007, and since 2010 has served as Dean of Women in Ministry for the Diocese of Cheshire.

After the brick-laying, we head upstairs to the YMCA’s gym, and the media get to enjoy the spectacle of Lane chatting to a perspiring man while he runs on a treadmill, while others continue to lift weights in the background. When we think of historic moments and the Church of England, the image of heavily embroidered robes and fancy candles come to mind before dumbbells and sweatbands. But this time, we’re being directed away from the Church’s traditional, ceremonial aspect in favour of its more modern incarnation.

Despite the lack of incense, this is still an historic moment. Lane, who is slightly reeling from a hectic day of media attention, is very aware of the significance of her appointment. “I’m feeling very thankful,” she tells me. “I’m very conscious of the countless women and men – recognised and unrecognised – who have gone before me, who have worked and prayed and looked forward to the day when such an announcement as this would be made.”

The first women priests were ordained in the Church of England just 20 years ago, in March 1994. Later that year, Lane herself was ordained (alongside her husband, who is now a chaplain at Manchester airport – they were one of the first married couples to be ordained together). In a sense, her church career has run in parallel with the Church’s changing attitudes to women. “I was among those women who were selected and trained and ordained exactly in parallel with my male peers,” she says. “It’s happened now with the ordination of women to the episcopate that I’ve served for 20 years, and have come to the point in my ministry where the church has discerned that perhaps I have the capacity for [being a bishop] at the time when the church has moved to doing that.”

Part of the reason that Lane’s appointment is significant is because of the fraught nature of the debate about women bishops within the Church of England. Over the past two decades it has become increasingly polarised, with both traditionalist Anglo-Catholic and evangelical factions resisting the change, even though other churches in the Anglican communion had already taken the step (there are women bishops in Ireland, the US, New Zealand, Canada and elsewhere). In November 2012, the legalisation passed two of the synod’s three electoral houses, but was rejected by the House of Laity by a tiny margin. Eventually, revised proposals succeeded in 2014 and became canon law last month.

Although Lane didn’t have a high profile role in the campaign – she describes herself as a “low-key supporter” – she has, naturally, followed the debate closely. “We’ve looked forward to this day in principle,” she says. “I’m a little daunted by the realisation that actually that first women turns out to be me, though.” Acknowledging that there will be greater scrutiny of her as the first woman bishop – after today, she feels it has started already – she is relaxed about meeting expectations. “I can only be who I am, I can only bring to this the particular skills and gifts and experience that I have, and do that with integrity and honesty. Really that is all that I can offer.”

However, she is confident that she won’t be alone for long, reflecting the enthusiasm of Archbishop of Canterbury Justin Welby and others for the change. “Although I’m the first, I’m sure it won’t be long that I am the only,” Lane says. “Obviously these things are done with enormous discretion and the church works hard to ensure that it matches the particular needs of any vacancy with the gifts and experience of individuals, but now that the opportunities are open to women and men it won’t be long before there are more women.”

It must be hard, though, to know that there are those who share your faith but consider you inadequate to be in charge. Lane, however, is magnanimous in victory:

“The service order for the consecration of bishops has in it a prayer for those who have been consecrated that they might use their authority to heal, not the hurt, to build up and not to destroy, and I’m very conscious of that call, for bishops to be a focus of unity. I think the church is a better place for having dissenting voices being heard, and I’m committed to the church’s principles of the flourishing of all Anglicans, whatever their church tradition or theology.”

She won’t be drawn into criticism of the opponents of her elevation. There’s a place to be found in the church for those who can’t work with her, Lane says, or “those who can’t accept my ministry of oversight”, as she prefers to describe them.

2014 has been a year when the Church of England has once again flexed its political muscles. Welby has followed the example of his predecessor, Rowan Willams (who made a notable political intervention against the coalition in the New Statesman in 2011) and tackled questions of social inequality and poverty. Most recently, he has intervened on the subject of food banks, urging politicians to confront the fact that increasing numbers of people are forced to rely on them to stave off hunger. Church attendance may be declining, but as the head of the UK’s established church, Welby’s words still carry weight.

Lane shares her boss’s passion for social action. A bishop’s role, she says, is to help the voiceless be heard. “The Church of England is in every community, and is made up of people who are every community. We do have a voice that is the voice of ordinary people in the country, and where bishops are able to make that heard then there is an opportunity that I hope I can play my part in.”

She declines to be more specific about her own political ambitions, though. As a suffragan bishop, Lane won’t be eligible to sit in the House of Lords, although legislation is being prepared to remove the barrier to senior women bishops taking up their seats in the future. But there can be no doubt that she is already a political figure – just by accepting the post, Britain’s first woman bishop has made a statement about the Church’s future capacity for change.

Caroline Crampton is assistant editor of the New Statesman. She writes a weekly podcast column.

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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?