Or
Against All Odds
Please allow me to introduce myself...
I opened the latest Ealing 38 Degrees meeting with the following words:
I’ve always been a strong
believer in environmental issues – protecting the earth and finding cleaner ways
of generating energy. In the past few
years I have become more and more aware of the struggle of the Palestinian
people for freedom and justice. And I
have become aware of how important local democracy is, and how local politics
affects people’s lives. All of these
issues have been brought sharply into focus by the new law that this government
wish to impose upon us. This is a rule
designed to prevent local authorities from making ethical choices when they
decide where to invest their money. This
means barring them from boycotting Israeli firms that operate in the West Bank
of Palestine, or weapons manufacturers, or corporations that they believe
operate in an unethical manner. With me
to discuss these matters further are Ben Jamal from the National Executive of
the Palestine Solidarity Campaign, Joel Benjamin of Community Reinvest and MoveYour Money, and Alex Goldhill of the Unite Community in Ealing.
Destroying Revenues for Local Councils
Joel Benjamin was up next, and immediately gave us an eye opening statistic that less money is spent locally in the United Kingdom than in any other country in the West. The vast majority of funds spent locally are from central government. But things have become considerably worse over the last few years.
Cuts to council budgets from central government, and restrictions over the way that councils can seek loans to plug the resulting gaps in their balance sheets have lead to the rise of the "LOBO (Lender Option Borrower Option) Loan". It is this kind of loan that has put private banks in charge of local authority debt, rather than the more stable local government loans that councils have been deterred from taking out. These loans can appear to be much more reasonable at first, but after the initial fixed term ('teaser rate') has expired, the lender has the option to increase its Interest Rates, which puts the council in question at the mercy of private financial interests. This means, in practice, that local authorities such as Hackney are currently spending 80% of their council tax revenues on servicing their debt to banks such as RBS, HSBC and Barclays. There are some local authorities in Scotland whose debt repayments now stand at 100% of their council tax revenues.
Cuts to council budgets from central government, and restrictions over the way that councils can seek loans to plug the resulting gaps in their balance sheets have lead to the rise of the "LOBO (Lender Option Borrower Option) Loan". It is this kind of loan that has put private banks in charge of local authority debt, rather than the more stable local government loans that councils have been deterred from taking out. These loans can appear to be much more reasonable at first, but after the initial fixed term ('teaser rate') has expired, the lender has the option to increase its Interest Rates, which puts the council in question at the mercy of private financial interests. This means, in practice, that local authorities such as Hackney are currently spending 80% of their council tax revenues on servicing their debt to banks such as RBS, HSBC and Barclays. There are some local authorities in Scotland whose debt repayments now stand at 100% of their council tax revenues.
And yet...
... despite this growing debt trap, and despite the centralization, and despite the broken devolution promises, local authorities remain rich reserves of spending and bastions of local democracy that are more accessible than their central government counterpart. And they can use their autonomy to pursue courses of action that may not chime with official government policy. And indeed why should they blindly follow policies they may not agree with? A council ward may be part of a Conservative constituency but may elect a Labour or a Liberal Democrat councilor - or a Green, or UKIP or maybe an independent. And so locally, within the limits of its influence, politics may work differently. That's localism; that's democracy. These are the principles that George Osborne and the Conservatives paid lip service to when they came to power.
... despite this growing debt trap, and despite the centralization, and despite the broken devolution promises, local authorities remain rich reserves of spending and bastions of local democracy that are more accessible than their central government counterpart. And they can use their autonomy to pursue courses of action that may not chime with official government policy. And indeed why should they blindly follow policies they may not agree with? A council ward may be part of a Conservative constituency but may elect a Labour or a Liberal Democrat councilor - or a Green, or UKIP or maybe an independent. And so locally, within the limits of its influence, politics may work differently. That's localism; that's democracy. These are the principles that George Osborne and the Conservatives paid lip service to when they came to power.
What is BDS?
One of the ways that local democracy can practice its independence is through the peaceful tactic of Boycott, Divestment and Sanction. BDS for short. If an organization, or a corporation are providing services or manufacturing goods for a government that are repressive towards their own, or part of their own, or another country's population, then you do not avail yourself of their services or goods; and you withdraw any funds you may have invested in that organization. This "destroys a firm's cultural license to operate", and hopefully will change the behaviour of that organization or corporation, who may in turn find themselves forced to withdraw their services or investments from the country with the repressive government. And this in turn, hopefully, will change the behaviour of the repressive government. It's like a virtuous cycle.
Or sometimes it's just about the wish to be more virtuous. After all, can one sleep easily knowing that one's pension fund could be used to manufacture weapons that may target civilians? Would it not feel good to know that one's pension is not tied into the fumes of an oil refinery belching carbon into the atmosphere and warming it up? Or a fracking operation, poisoning the water and causing earthquakes?
And local governments in Britain have begun to use this BDS option. Leicester council have boycotted goods manufactured from the West Bank. Reading council have announced that they are divesting from fossil fuels. Apart from the ethical issues, this is common sense: everyone knows how the price of oil is currently crashing (though £14 billion in British public service pension money is sill tied into fossil fuels); and the government's own guidelines warn of the risks in investing in settlements that break international law.
But councils were never going to be allowed to take these kind of actions with impunity. Not in a country that has become, as a friend of mine has dubbed, The Prostitute State. A country where ministers mouth platitudes about protecting the environment while sitting on the boards of fracking companies. A country where inquiries into tax evasion are themselves headed by tax evaders. These monied interests looked upon the actions of recalcitrant local authorities, and they did not like what they saw.
A New Law to Target BDS
Ben Jamal, from the Palestinian Solidarity Campaign now addressed the meeting. He told us of new measures were announced in a press release on 7th October 2015 on the eve of the Conservative Party conference that month. By sheer coincidence Jeremy Corbyn, a known sympathiser to the cause of Palestinian liberation, had been elected leader of the Labour Party a few weeks before. Drafted by Greg Clark, Secretary of State for Communities and Local Government. It spoke of the "divisive" nature of BDS that posed a "risk" to local communities, and that "measures" were going to be introduced to "oppose" BDS. Matthew Hancock, Minister for the Cabinet Office, formerly introduced the measure during a trip to Israel. They were implemented without a vote in the House of Commons. One person who would have been very satisfied with this outcome is Gilad Erdan, who is Benjamin Netanyahu's no. 2 in the Israeli government, and has been tasked with coordinating the "Anti" BDS movement around the world.
The way these new measures work is by "second guessing". Say a council decides it no longer wants to invest in Hewlett Packard, which is known to be deeply involved in supplying the Israel Military in its blockade of Gaza and in the illegal occupation of the of the West Bank. This could also apply to a council that decides to divest from companies that export weapons to, say, Saudi Arabia. George Osborne could extrapolate that the true reason for divestment from this company is because of that company's actions in Israel, or that weapons manufacturer's intent to trade with the Saudis - and force the council to continue its investments.
What is being done to fight this new law?
Firstly, a debate was finally called in the House of Commons concerning the fait accompli that had been presented to them in the shape of this new law. The transcript for the debate can be read below:
http://www.palestinecampaign.org/local-government-ethical-procurement-debate-in-parliament/
I am glad to say that two MP's from my local area, Stephen Pound and particularly Andy Slaughter, stood strongly in opposition to the legislation. Ben also told us of how Newcastle Council are planning a legal challenge to the government to resist these changes.
See below for some ways you yourself can not only join the fight against this law, but also ways you can find out how much your council owes in LOBO loans, or how much money your council has invested in fossil fuels.
Will justice prevail, or will the government's pernicious actions continue to damage human rights and the environment? I cannot say, but the important thing is that we don't take this lying down.
The way these new measures work is by "second guessing". Say a council decides it no longer wants to invest in Hewlett Packard, which is known to be deeply involved in supplying the Israel Military in its blockade of Gaza and in the illegal occupation of the of the West Bank. This could also apply to a council that decides to divest from companies that export weapons to, say, Saudi Arabia. George Osborne could extrapolate that the true reason for divestment from this company is because of that company's actions in Israel, or that weapons manufacturer's intent to trade with the Saudis - and force the council to continue its investments.
What is being done to fight this new law?
Firstly, a debate was finally called in the House of Commons concerning the fait accompli that had been presented to them in the shape of this new law. The transcript for the debate can be read below:
http://www.palestinecampaign.org/local-government-ethical-procurement-debate-in-parliament/
I am glad to say that two MP's from my local area, Stephen Pound and particularly Andy Slaughter, stood strongly in opposition to the legislation. Ben also told us of how Newcastle Council are planning a legal challenge to the government to resist these changes.
See below for some ways you yourself can not only join the fight against this law, but also ways you can find out how much your council owes in LOBO loans, or how much money your council has invested in fossil fuels.
Will justice prevail, or will the government's pernicious actions continue to damage human rights and the environment? I cannot say, but the important thing is that we don't take this lying down.
"Every generation has to fight the same
battles for peace, justice and democracy. And there is no final victory
nor final defeat."
Tony Benn
Actions You Can Take
Protect Local Freedom to Boycott - Petition to David Cameron
Protect Local Democracy - Write to your MP and ask him or her oppose this new law
Go Fossil Free Local Gov Pensions Tool - Find how much your council pension fund has in fossil fuels
Community Reinvest - A Report on which councils are divesting from fossil fuels and reinvesting in community energy
Debt Resistance UK - local authority debt audit - Find out how much bank LOBO Loan debt your council has & oppose it....
Divest London Information on local government divestment campaigning across the Capital
A Selection of Further Reading
http://www.palestinecampaign.org/conservative-plans-ethical-investment/#sthash.CNb0cjJo.dpuf
http://www.ianfraser.org/how-city-banks-and-brokers-stitched-up-local-authorities-with-lobo-loans/
http://wire.novaramedia.com/2015/07/osbornes-budget-surplus-lock-is-a-scam-to-encourage-more-borrowing-from-the-city/
http://www.thecanary.co/2016/03/16/osbornes-budget-contains-nasty-surprise-local-services/
https://electronicintifada.net/content/billionaire-donor-using-british-council-combat-israel-boycott/15991
https://www.middleeastmonitor.com/blogs/politics/21545-uk-governments-attack-on-bds-part-of-wider-offensive
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