Blog 2023 Malcolm Blair-Robinson

Once again abortion is in the news in America at a sufficient level to cross the Atlantic into the European media. At the heart of the issue is the freedom of individuals to choose what they believe in, and what they do with their lives. The problem comes when the beliefs and the actions clash. If both occur in the same person they cause torment. If they occur in different people this causes discord, which can go on to become hatred and unrest.

One solution is the religious state, where the law of the faith and the law of the land are the same thing. Another is the secular state where all are free under the law of the land to practice  their faith without imposing its strictures on others of a different persuasion. In these states the law of the land is paramount. Sometimes concessions are made. It is the law but not if your beliefs disagree. At the margin, this may not matter although it is a very bad principle. It is against the law everywhere to kill and eat people and nobody suggests that some people professing a faith in cannibalism should be allowed to practice it.

The overriding principle must be that all religious disciplines function within the law of the land, wherever they are practiced. In enlightened countries these include human rights laws and those outlawing discrimination on the grounds of race, colour, gender or sexual orientation. This should apply to marriage in the priesthood, woman priests, gay bishops, genital mutilation, polygamy, forced marriage and so on. Yet this is not always the case. Exceptions are made, allowing faith adherents to break the law because the believe in something different. This is wrong.

It is also wrong of abortion. If it is allowed under the law, subject to appropriate conditions, it must be against the law to deny it. That is what law is and what laws are for. They pull a diverse society together in common  protection rather than allow the hazard of everyone for themselves. Americans should know this better than any people on earth.

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In the view of this Blog, this answer is both yes and no. It is right to point up the risks of the current boom and right to introduce measures to prevent the problem getting out of hand. But some may say it is out of hand already. Many worry  that both the Governor and the Deputy Governor have suggested that the Bank is less concerned with prices and more concerned with debt. Indeed the message is that prices are not its patch, but the debt overhang to fund them is. This does not really work. It is like travelling in a car at excessive speed, concerned only about the potential malfunction of the brakes. Certainly faulty brakes would make the danger excessive, but the problem in the first instance is the speed.

At the heart of the imbalance in the structure of the UK economy is the fact that house prices have become not only excessive, but the molten core fuelling the economy. Because the cost of housing is so high (the average house price should not exceed the range of 2.5-3.0x average income), this sucks away money which would otherwise expand other sectors of the economy. In order to fund these huge costs people borrow, both to buy homes and to fund other purchases for which there is no surplus income left to use. The government has to pay the excess of rent beyond the level which ordinary people can afford. All of this consumes huge resources and contributes to imbalances in wealth, opportunity and employment.

The figures speak for themselves. The government now pays £50 odd billion a year to service the interest on its debt, without a penny of this applied to its reduction. A less well known figure is the the astonishing total of interest being paid on household debt, currently approaching £60 billion a year. This means the economy is having to fund as a first call over £100 billion each year, most of which goes abroad. Worse, government, personal and mortgage borrowing are all on the rise.

When property prices went through a process of correction after the crash, it was incumbent on both the government and the Bank to devise controls which would stop prices rising again faster than inflation. My proposal was for a Mortgage rate, separate to Bank rate, so that it could rise to restrain the housing market, leaving industry and commerce with continued access to cheap money. I put this in my book in 2009. The critical issue was to subject house price inflation to the same discipline as general inflation. Failure to do this is at the heart of our current problem, which should concern the MPC. Tinkering with lending rules now after prices have been allowed to rip in the housing market may avert a catastrophe, but they will not prevent a good deal of difficulty, potentially even a disaster.

Buy my book 2010 A Blueprint for Change You will find the chapter on economics very simple to follow and it puts this whole issue in clear perspective.