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The ex-Archbishop and the Moral High Ground
Submitted by Paul on Thu, 26/01/2012 - 16:25
George Carey has entered the fray on the Welfare Reform Bill and has had a go at his fellow bishops in the Daily Mail. The poor bishops who have worked hard to dent what some see as a wholesale withdrawal of benefits to the poorest - who could be against helping poor children? - are accused of acting immorally. The former archbishop seeks to shift the moral debate from one about welfare and benefits to one about the state of the national debt. Now, all of us want to see a benefits system that rewards hard work and at the same time provides a safety net for those who have struck upon hard times. But what is a bishop for if not to stick up for those who have no voice? How can young children in poor families realistically speak up? At Church Urban Fund, we are in favour of reform but we also recognise from our relationships in local communities that there are real people, in this case children, who will suffer.
Carey, of course, has a point about the immorality of debt, but certainly not a point that can sustain the view that the bishops are acting anywhere other than from the moral high ground. There is no choice to be made here; welfare reform and the national debt are intrinsically linked, and they are part of a large web of interactions which are both difficult to manage and difficult to reform. The Government really does have a difficult job to do.
Let's look at debt. Never mind double dips or the state of the Euro, important though these are. The real issue with the economy, and to some degree with society as a whole, is the exceptionally high levels of destabilising debt. High levels of debt make it difficult for banks to trust each other or their customers; it places a question mark over national economies and their potential to pay up on their obligations and, of course, it cripples families and their capacity to budget.
The headline figure for national debt, which is what Carey has focussed on, usually reveals the amount owed by the government to the bond markets. On its own this does not make things look too bad; in fact, in relative terms it's pretty rosy. At present this is almost 70% of GDP (what we produce as a nation each year). At the end of the Second World War this figure was over 200% of GDP, so we have been here before and it has been much worse. This headline figure though is misleading and significantly underestimates the scale of the problem.
What we need to be working with is the figure for total debt in the economy, because that is the reality of the problem. If we add together the national debt, the debt of banks and companies and then add to that household debt, this comes to almost 500% of GDP. Debt on this scale has never been experienced in the history of the world; it is especially notable that this level of debt is proportionally higher in the UK than it is anywhere else in the world. For the US, the figure is 269% of GDP; Japan has a slightly lower figure than the UK but a very different attitude to borrowing.
There are two disturbing features of this situation. The first is that it is getting worse. Though household debt and company debt is decreasing - one wonders whether this is about not having the capacity to borrow more? - the level of debt is increasing overall, because of the increased borrowing by banks and the public purse. Public borrowing is set to increase significantly over the next few years: in 2008 the UK borrowed £37 billion from the bond markets; in 2010 it was £57 billion. It is predicted to peak at £69 billion in 2015 before it starts to reduce if, of course, the plan works out. We can see then that £80 billion of cuts over 4 years only begins to scratch the surface of what is needed.
The second is that there is no real strategy to change the game plan. The Chancellor and, to some degree, Her Majesty’s Opposition, is focussed on stabilising the economy and riding out the shocks. The focus appears at this stage to be about maintaining the AAA status of UK Government borrowing on the bond markets at all costs. This keeps borrowing reasonably low, which is what you need (and which works in the short term) if you have large debts. Credit where it’s due - not that there is much credit around at the moment - the Chancellor has done well with this. If we lose the AAA rating, the effect on the poor is likely to be even greater.
The cuts may not significantly address the deficit, but what they do is tip the wink to the rating agencies and the bond markets that there is at least some will to address government borrowing. The policy trick, therefore, seems to be not to cut too much and create further instabilities, whilst not to cut too little and limit the comfort of those presently paying the bills. The human tragedy, which is what the bishops are speaking out about, is that the poorest are the most affected by the cuts; we at Church Urban Fund can confirm this because we see it daily in our work.
Expanding employment opportunities, particularly for the young, are vital. One young lady I spoke to in Leicester told me “I went round to 26 different shops in town, not even in Leicester but out of Leicester as well, and none of them will take you for volunteering or work experience or anything.” Her experience isn’t unique; a young man in Salford told me recently that being unemployed was affecting him deeply. “I was made redundant because of cut backs. It’s been so difficult without work. There was a period in my life when I tried to kill myself 3 times...My girlfriend was expecting a baby and I was so angry that it would be the government giving my baby money and not me earning it.”
It's obvious that if you have to do some cutting in your budget, you start with the big-ticket items. In public expenditure at the moment these are public pensions and social security. No-one wants to advocate for or defend benefit dependency, but all of us need to watch out for the poor paying the price for market instability. We have significant concerns for the people who are on the fringes of the welfare system at the present time. If there was a half-decent plan to expand further education or job training, or even some aim to economic restructure so as to develop accessible jobs, there would be at least some comfort. Iain Duncan Smith has an almost impossible task reforming the welfare system in a time of austerity and we should have some sympathy. Nevertheless, bishops should speak up for the poor especially where they are vulnerable children.
Things are very bad economically. They are getting worse and there is no real long-term plan for the sort of radical change that is needed to fix the problem. Maybe none of us are ready for it yet. Perhaps the best strategy for the moment is to keep things steady and create the stability for us to take stock. That is certainly a laudable intention at the moment; it seems to be beyond the rhetoric of what both of the main political parties are for. Though stability is better than nothing, we do need to be careful that it is not paid for by the poorest.
I am just left wondering how could it possibly have come to this?
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Comments
Carey's intervention
Carey's intervention indicates a severe lack of understanding, not just of the position of his fellow bishops whom he has actively undermined, but also of the impact of his comments.
As Polly Toynbee suggested in her most recent column, Carey's article has the tone of a Daily Mail leader article. Added to the fact that Lord Carey rarely wrote his own speeches during his time as ABC, it is most likely the article was penned, or at least heavily embellished, by Daily Mail staff writers.
Lord Carey has been nothing short of foolish to surrender his voice to the reactionary press in this way. I am pleased a Church of England body like CUF has spoken out against the former archbishop's remarks.
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