Greece needs growth not austerity to rebuild democracy

The humanitarian disaster unfolding in Greece is a wake-up call for all those who want the flame of democracy to burn brighter and not to be blown out by the cold wind of austerity.  I’ve just returned from Athens with other MPs and trade unionists having witnessed first-hand the voluntary food and medical centres desperately trying to cope with growing needs and having met with MPs forced to implement cuts and privatisation. It’s not a happy sight, there is a better way and it is our business.

 

The scale of social and economic destruction in Greece is deepening as austerity is making the debt, and the capacity to re-pay it, worse not better. Cuts and taxes have helped to shrink the economy by a quarter so debt as a proportion of the economy has grown from 133% in 2010 to 175%. In Britain less draconian austerity has not shrunk the economy but it has held back growth so our debt as a share of GDP has grown from 55% to 80% since 2010. In Britain, such policies have created rising child poverty, foodbanks and homelessness but in Greece we see the future they entail taken to greater extremes. A quarter of the workforce are unemployed, wages and pensions have been cut and one in two children live in poverty. Meanwhile, over three million people are without health insurance. Of the 252m Euros lent by the Troika since 2010 less than 10% has reached those most in need with the vast majority used to bail out banks and private debt.

 

In July sixty per cent of Greek voters rejected the proposals put forward for deepening austerity and wholesale privatisation but the Troika offered no serious alternatives which forced a split in the new Syriza Party. Encouraged by powerful creditors, this provoked the Greek Government to hold a snap election in September so that rebel Syriza MPs, standing independently, could be defeated. One of these, the former Speaker Zoe Konstantopoulou, chairs the Truth Committee of economists, auditors and human rights lawyers who contend that Greek debt is essentially the illegitimate transfer of private bank debt to sovereign debt to the Greek public. In Britain we nationalised the banks and their debts but in Greece the IMF has admitted that the transferred debt is unsustainable.

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This is ignored by the Troika who are relentlessly reducing Greece’s capacity to pay future debt, including through the rapid privatisation of national economic assets. One new Syriza MP said that MPs had only been given a week to look at the contract for the sale of Athens’ Port of Piraeus. The Port represents a strategic import gateway into Europe for the Chinese who would pay anything for it before investing in a rail system to fast-track goods into the Single Market. I suggested Greece bids for say 5% of the value of future import turnover as the price but in practice the fire-sale will mean they will probably only get a small one-off payment instead of a growing income stream. Meanwhile, the nine airports are being sold for 1billion euros when 1.2 billion has recently been invested in just one of them. As the assets are sold, young graduates and skilled workers are leaving Greece and expenditure on state education is being cut. In other words, instead of investing in skills and infrastructure – in rail, solar forests to power Europe, digital skills for the future etc. -Greece is being economically denuded of its temples and talents. 

 

The others who went to Athens – MPs Kate Osamor and Clive Lewis and trade unionists led by Manuel Cortes of TSSA and Greek Solidarity - agree that the EU should provide a combination of debt write-off and strategic investment in growth to get Greece back on track. Of course Greece bears some responsibility for its own condition. It was let in the Euro under false pretences and some changes to retirement ages, pensions and tax collection are overdue but we cannot let that obscure the facts that we are witnessing the destruction of democracy, public services and national pride in a way, and at a pace, that threatens the future of Europe. Greece need a helping hand along a stony pathway instead of being beaten along the way.

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As our Greek Solidarity delegation discussed the future of Social Democracy with former Prime Minister George Papandreou in his institute, just a stone’s throw away from the grave of Socrates, I mused over John Stuart Mill’s maxim that ‘it is better to be a dissatisfied Socrates than a satisfied pig’. Socrates would be turning in his grave at the misfortune of Greek democracy to the glee of satisfied pigs.

 

I was also reminded of Aneurin Bevan’s contention that amidst economic difficulty, when property comes into conflict with poverty, property will attack democracy. Now is such a time and it is for us, in solidarity across Europe, to defend democracy itself and put forward a programme of growth in place of cuts to protect the public good against the growing power of private interests.

 

To join the Labour Greek Solidarity Campaign go to - http://greecesolidarity.org/?page_id=469

 

 The article first appeared on LabourList on 26/10/2015 - http://labourlist.org/2015/10/greece-needs-growth-not-austerity-to-rebuild-democracy/


To keep poverty rising Tories attack democracy

Aneurin Bevan said that the evolution of our political economy is driven by three forces in a dynamic struggle – private property, poverty and democracy – and at difficult economic times private property will attack democracy to defend its interests from the demands of poverty. This is exactly what is happening in Cameron’s Britain with cost of repaying the deficit loaded on the shoulders of the poorest and the removal of the requirement to register to vote.

 

The number of children living in absolute poverty ( ie beneath 60% of median earnings) will grow by 600,000 in 2012 according to the IFS as median earnings actually fall by 7%. Meanwhile directors in the FTSE 100 companies saw their salaries grow by 49% last year. This is the stark reality of the ConDem priorities in action. Meanwhile, Shelter predict another 35,000 homeless by Christmas as the Tories and Lib Dems in anticipation switch squatting from being a civil to a criminal offence despite the opposition of the Bar Council.

 

How we tackle the deficit and who pays most are political questions rooted in who represents the interests of the few and private property – the Tories and Liberals – or of the many and those in poverty – Labour. The question of what is the balance between growth and cuts and who pays most is political. The Tories’ choice is to attack public services, pensions and jobs and the welfare state leading to a massive increase in poverty. The Tories have chosen to abandon Labour’s strategy of short term investment above tax revenues to stimulate economic growth to boost tax revenues. This accounted for a third of the deficit – the rest being due to the bankers – and successfully generated positive growth.

 

Instead George Osborne announced half a million job cuts which predictably provoked people into saving more and spending less. This has meant a sharp reduction in economic growth so that the deficit forecast is now £46billion higher. They are in no mood to change course but know that without attacking democacy and rigging the system they will be punished for their ruthless ineptitude at the ballot box. That’s why we have fixed term parliaments, new contituency boundaries and a reduction in the number of MPs. In Wales, where Labour is strong, one in four MPs will be removed.

 

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Most pernicious of all is the removal of the requirement to register to vote in Britain. This will remove the votes of millions of the poorest in Britain so David Cameron will be taking their jobs and services and pensions and benefits with one hand and their right to vote with the other. Each new constituency must have 77,500 registered voters plus or minus five per cent. The Tories have calculated that as poorer voters drop off the register, Labour will have less winnable seats. Already a third of registered voters don’t vote and these tend to be poorer and are more likely to drop off the register. Meanwhile individual voter registration is being introduced so in families where the head of household has traditionally filled in the voter registration for the family – in particular amongst some ethnic communities – voter registration will fall. Money provided for voter registration to local authorities will no longer be ring-fenced for that purpose and individuals can opt not to be sent requests to register to vote.

 

As a further move to increase poverty and reduce democracy the Tories are advocating giving taxation powers to Wales and Scotland. They plan to freeze or reduce the block grants and then to say “if you need more money raise your own tax”. The Scotland Act gives responsibility to Scotland for raising 10 pence of income tax and helps push it in the direction of independence. Meanwhile the Silk Commission will look at extending tax raising powers to push Wales in a semi-detached direction.

 

Both will help consolidate Tory power in Westminster and put pressure on the net subsidies to Scotland and Wales which are £14.3billion and £14.6billion respectively. As total annual oil and gas revenue from the North Sea was £13.4 billion in 2011/12 and just £6.5 billion in 2009/10, the pretence that Scotland can become independent without making the Scots poorer doesn’t add up. In Wales the Welsh Government receives £15.7 billion so an independent Wales would lose virtually all this money.

 

In just 18 months the forces of conservatism are about to destroy centuries of democracy by taking away the right to vote. They are rolling back the welfare state and public services so that the rights and living standards fought for over generations are being removed. Now is the time for Labour to regain our historic place as the champion of social justice, democacy and the right to work and to heed the words of Aneurin Bevan.

 

However the Tory strategy of flattery and conceit is in play as part of the broader assault on democracy from private property to keep poverty rising as Nye Bevan would have predicted. The Tories and Lib Dems are dividing up and weakening democracy, making the poor poorer and breaking up the Union.

 

We must not let Britain down.

 

This originally appeared on LabourList at http://labourlist.org/2011/11/to-keep-poverty-rising-tories-attack-democracy/


Reducing the deficit - Labour growth vs Tory cuts

Despite the pain of cuts the outcome of the next election is in the balance. The public will decide who to vote for based on which party they think will deliver a stronger economy to pay for a fairer Britain. At present, the jury is out.

 

“Labour messed up the economy and the Tories are making it worse so why should I vote for either?” one voter asked. “And now that Labour says it won’t reverse the cuts and will spend the same as the Tories, what’s the point of Labour?”another demanded.

 

The party’s challenge is to provide a compelling case as to why Britain would be better off with Labour. Firstly, the problem is that the electorate doesn’t yet see a clear choice between the parties on cuts vs growth. Secondly, the Tories have been relentless in asserting that Labour messed up the economy.

 

Not rebutting this charge makes us look like a shamefaced schoolboy admitting responsibility by omission. And if we don’t rebut the accusation, it will simply amplify as the election approaches. 

 

True, the deficit went up once the sub-prime tsunami hit our shores but it was Gordon Brown’s and Barack Obama’s fiscal stimulus that ensured a mild recession in 2008-09 instead of a depression and meant GDP was growing again by 2010.

 

Only a third of the 2010 deficit was due to Labour investing above earnings to keep the economy moving forward, with two-thirds caused by the bankers. In a downturn, that is the correct economic strategy. To cut in a downturn makes things worse but that is exactly what the Coalition has done.

 

In his 2010 Budget, George Osborne announced 500,000 job cuts in the public sector, which ensured public-sector workers started saving instead of spending in case they lost their jobs. The switch from growth to cuts will mean the debt to GDP ratio will grow from 55 per cent in 2010 to 85 per cent by 2015.

 

The Tories are cutting deepest in the North and Wales – where there are more public servants – and spending most in London and the South-east – where there are more Tory voters.

 

Meanwhile, the poor who spend all their money by necessity and help the local economy are being hit hardest to pay for the bankers’ folly.

 

Labour needs to set out a vision of a stronger Britain that provides the economic confidence to invest and consume to stimulate jobs and growth. The Conservatives have been busy trying to recreate the political choices of the 1980s – between an “all heart and no mind” Labour which would tax and spend Britain into bankruptcy vs the hard-nosed business sense of the Tories making tough choices in the nation’s interests.

 

Labour needs to talk the talk of UK plc – boosting the UK’s productive capacity by linking industry, universities and councils. We need a sharper focus on the growing export opportunities to China, India, Brazil and Russia. We must invest in homes and transport, use public procurement as an engine to grow small and medium-sized firms.

 

The European elections next year are an opportunity to put growth and jobs centre stage. The central question is the cost to trade, investment and jobs of spending four years arguing about whether to walk away from Europe. Inward investors from growing economies want access to the world’s biggest market – Europe – and not to pay a 14 per cent tariff to export from a detached island. We need to continue a journey towards jobs and growth, not to be diverted into a cul-de-sac of more cuts.

 

From the Independent 5 August 2013 - http://www.independent.co.uk/voices/comment/reducing-the-deficit-labour-growth-vs-tory-cuts-8747237.html


Geraint's letter in the Independent on the EU

We need each other within the UK and are stronger for it – on defence, trade and multinational organisations. Divided we would lose our voice on the UN Security Council – perhaps to India, Brazil or South Africa – and Nato could no longer rely upon a common UK foreign-policy position.

 

Meanwhile, across Europe independence movements and Russian geopolitical strategists take heart at the success of the Yes campaign. As Russia sows the seeds of division and chaos by encouraging separatist groups, it knows Britain will be weaker if divided from within.  

 

The idea of a divorce between countries with a shared history of culture, language and religion sends shivers down the spines of those who champion harmony across Europe. Alarm bells are ringing at the prospect of Scottish independence heralding the atomisation of Europe.

 

The future is uncertain and potentially dangerous so the question of whether we face it together or apart extends beyond the shores of Britain to a Europe whose security has been built upon unity.

 

Geraint Davies MP (Swansea West) & Member of the Council for Europe - First printed in the Independent on the 11th of September.


Wake up Labour – our democracy, finances & services in mortal danger from US & Canada trade deals

There’s been a lot of talk about TTIP, the EU-US transatlantic trade agreement, in particular about the threat to our NHS and other public services. People talk of the hidden powers for transnational companies to sue governments in secret tribunals in TTIP but few realise that today is the first birthday of TTIP’S little brother CETA – the EU-Canada free trade agreement – which threatens to let corporate wolves prowl through the back door, when everyone’s too busy barricading the front door, and bite holes in our democracy, public finances and public services.

 

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That’s why last week I introduced the International Trade Agreement Scrutiny Bill – to agitate parliamentary action and to help focus Labour on the urgent need to pull out CETA’s sharpest teeth before Labour finds itself playing Little Red Riding Hood. Global companies can implement TTIP through the Trojan Horses of their Canadian subsidiaries in Europe. So the Labour Party needs to adopt a clear policy which continues to back trade but not at the cost of our sovereignty, economy and environment in a deal that would bind Britain for 20 years even if we voted to leave it.

 

Concerns about TTIP (the Transatlantic Trade Investment Partnership) have centred around privately held tribunals which would enable companies to sue governments for lost profit due to laws passed to protect citizens’ health, environment, rights at work and public services. These “Investor State Dispute Settlements” (ISDS) can bite deeply. Tobacco giant Phillip Morris sued Australia and Uruguay for hundreds of millions of dollars over warnings on cigarette packaging. US fracking company Lone Pine sued Canada for $250m for a moratorium on fracking in Quebec. Dutch insurance company Achmea sued Slovakia for reversing health privatisation policies and US and European energy giants sued Argentina over a billion dollars for freezing energy and water prices. The list goes on but the UK Government says “don’t worry no successful ISDS case has ever been brought against Britain”. These are tame wolves and only bite the neighbours.

 

So hundreds of thousands of people across Europe have signed petitions against the ISDS provisions of TTIP and in response EU negotiators have put ISDS on hold for TTIP. The trouble is that they remain in CETA which has been signed off for ratification next year!

 

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To help sound the public alarm bells I’ve managed to get articles entitled “EU DEAL WILL GIVE PASTIES A PASTING” in the SUN and “Cornish Pasties & Cumberland sausages could be made in North America under trade deal” in the Mirror. In short, the EU gives geographical protection for products like Champagne, Brie and Cornish pasties but such protection will not occur in future with CETA other than pre-specified exemptions none of which are British. If we need to enlist pasties and sausages to save our democracy so be it.

 

Meanwhile, the corporate lawyers negotiating the deal behind closed doors are busy watering down public protection in granting patents. For example, a drugs company that does seven successful trials and three unsuccessful ones will be able to hide the unsuccessful ones from the public and publicise the successful ones whilst covering its back with new provisions on trade secrets. Volkswagon has shown how corporations will put profit before public interest in its fixing of emissions testing so the last thing we need is to weaken freedom of information and hope for the best.

 

My Bill demands scrutiny and amendment of international trade agreements in the UK and EU Parliaments and has been sponsored by Labour, Tory, SNP, Plaid Cymru and Liberal Democrat MPs. These agreements, as they stand, would bind Britain for 20 years and mean our democracy would be undermined as foreign investors trump UK laws. Our small businesses, our famous British products and our environmental objectives would be steamrollered by big business.

 

Labour must be pro-EU and pro-trade but let’s not trade our sovereignty, our liberty, our democracy into the pockets of multi-nationals

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Geraint Davies is the MP for Swansea West and a Labour Member of the Council of Europe and European Scrutiny Committee.

 

This Article First Appeard on Labour List on 25TH SEPTEMBER, 2015 - http://labourlist.org/2015/09/wake-up-labour-our-democracy-finances-and-services-in-mortal-danger-from-trade-deals/