As policy makers, institutions and individuals prepare for Brexit, David Viney (Localise West Midlands) offers two options

With the government’s own economic impact assessments for the West Midlands making grim reading – the worst case scenarios reminiscent of the early 1980s recessions that devastated the social and economic fabric of the region – it is vital that policy makers, institutions and individuals prepare for what is likely to be a disruptive period for the UK economy.

In the de-industrialised areas of the West Midlands, there is a high concentration of leave voters. Economically and politically disempowered, these areas have performed poorly, in orthodox economic development terms, since the 1980s. They have experienced comparatively low levels of private sector and government investment and entrenched social issues linked to poverty. Put simply, the West Midlands hasn’t fared well out of the last 40 years of UK economic policy.

It seems that for the West Midlands, Brexit could be a perfect storm, with:

. a lack of political power to shape national policy to meet its specific needs,
• job losses after opening its markets to intense global competition, leading to.
• lower state investment likely to affect the poorest and most vulnerable in society.

So the most important questions are “what next?” and “Are the changes being planned for us, not by us, really in our interest?

It seems that two options exist….

More of the same?

Much of the hype around Brexit from government and its main advocates has been around the notion of a ‘Global Britain’, the narrative about this uses snappy messaging like ‘freedom’ ‘something new’ and ‘we will all benefit’. In reality ‘Global Britain’ is simply a rebranding and upscaling of the of current economic model we have followed for 40 years – and the West Midlands hasn’t done particularly well out of it.

Take food as an example of what this ‘Global Britain’ might mean. Early reports about potential ‘free trade’ deals have focused on cheaper food imports from places such as America, New Zealand and Australia. The result of this is that smaller UK farmers and food producers won’t be able to compete and could go bust, coupled with the enormous environmental costs of shipping food and goods long distances. So it appears behind the snappy title, Global Britain will be bad for local producers, but a bonanza for massive corporations, with capital and jobs leaving Britain in return for environmentally unsustainable food products and in some cases lower quality food.

In this scenario it seems more apparent by the day, that a real danger of Brexit will be to open Britain up to a free trade ‘free for all’ that could result in lower food, safety and environmental protections.

Something different?

Let’s be radical! If any situation called for creative thinking and new solutions, Brexit is it. Another Brexit mantra is ‘Taking back Control’ an amorphous phrase that in practice will most likely entail a further concentration of power in one place, Westminster.

Even with the devolution deal secured by the West Midlands, economic policy is generally created for the benefit of one part of the UK economy – London and the Southeast – and if this trend continues it will probably lead to further divergence between London and the rest of the UK, without the power to set policy that works locally.

So how about a radical redistribution of economic and political power, not only devolved to regional but right down to the communities we all live in?

Getting Local; Community Economic Development

awip lwm graphic 1

Imagine a new style of economy that values people and creates a resilient and sustainable West Midlands. An economic model where local people lead and participate as owners, investors, purchasers and wealth creators. Far-fetched? Not really. Community Economic Development (CED) exists in practice in communities across the world, from hyper local food networks, energy co-operatives, complementary currencies and larger private, trade union & public-sector partnerships that grow localised economic activity for the benefit of communities.

Evidence proves this approach is a better way to grow jobs, harnessing the assets of local communities, rather than relying on distant private and public-sector owners with little understanding of the local areas. LWM’s research has found that higher levels of small and micro businesses and local ownership lead to higher levels of economic success, job creation, social inclusion, civic engagement, wellbeing and local distinctiveness.

So maybe the right question should be ‘How do we make an economy that works for everyone, in which we all have a meaningful stake?’

Why?

We could spend another 40 years following the current economic model, sending profits into the offshore accounts of multinationals, damaging our environment and generally carrying on regardless, or we could spend the next 40 years working together to ensure the West Midlands is at the forefront of a new social and economic revolution.

Anything else is simply unsustainable . . .  

Visit Localising Prosperity, a LWM programme funded by the Barrow Cadbury Trust, to read about activity based on making the most of local enterprise, existing business supply chains, networks, community assets and human potential.

David Viney is Administration & Communications Officer for LWM. His professional interests include asset-based community development, regional economic disparity and how discrimination impacts on minority health outcomes.

 

 

 

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Our food system: smarter metrics will lead to different conclusions from those based simply on the market price of outputs: Pavan Sukhdev

 

Pavan Sukhdev who studied physics at Oxford and moved into the international banking sector, is founder and chief executive of GIST Advisory, a sustainability consultancy based in Mumbai, India and Head of UNEP’s Green Economy Initiative.

He is also CEO of TEEBAgriFood, which sets out an evaluation approach that accounts for the impacts of the food system on livelihoods, equity, food security, health, greenhouse-gas emissions, water quality and biodiversity. This approach can reveal effects that are invisible using assessments that consider only the production and marketing segments of food-value chains. The insights gained can support better decision-making for policymakers, farmers, agribusinesses and civil society.

Sukhdev writes in Nature: “Today’s food systems are broken. Our diets are the leading cause of disease. Some 800 million people worldwide still suffer from hunger, while more than 2 billion are overweight or obese. As much as 57% of global greenhouse-gas emissions come from food-related activities, which include everything from clearing land for agriculture, to growing, gathering, processing and packaging, to transporting farm goods and disposing of waste”.

He points out the inadequacy of the metrics we use to evaluate these systems: the most common yardstick is ‘productivity per hectare’ – far too narrow.

Broader metrics are needed to account for the interacting complex of agricultural lands, pastures, inland fisheries, natural ecosystems, labour, infrastructure, technology, policies, markets and traditions that are involved in growing, processing, distributing and consuming food. He continues:

“Health experts know to look beyond calorie counts to understand nutrition. Policymakers are less willing to accept gross domestic product as a proxy for national well-being and are turning to expanded measures of progress. And some private-sector leaders are looking beyond financial profit and loss, and assessing the impacts of their business on natural, human and social capital”.

He draws attention to a report released this week by the United Nations Environment Programme called ‘The Economics of Ecosystems and Biodiversity for Agriculture and Food’ (TEEBAgriFood) which demonstrates how to capture the complex reality of food systems through a wide-angle lens, commenting: “If this work helps to divert even a fraction of brain power and political will from maximizing yields to maximizing broader benefits, it will make for healthier people, communities and ecosystems”.

See this video on http://teebweb.org/agrifood/. Scroll down to find the 12 minute Keynote Speech: Prof. Johan Rockström with CEO Pavan Sukhdev.

One study based in New Zealand (H. S. Sandhu et al. Ecol. Econ. 64, 835–848; 2008) used a broader framework to compare conventional and organic agriculture, and found that important, non-marketed, ecosystem services have much higher value in the organic sector:

Researchers considered the benefits provided by 15 conventional and 14 organic fields used for crops such as carrots, peas and wheat. These benefits included two ‘provisioning’ ecosystem services (food and raw materials) and nine ‘regulating and supporting’ services, such as pollination, biological pest control and nutrient cycling. Organic farming practices such as composting and maintaining vegetation cover lead to higher biomass and diversity, below and above ground. Conventional agriculture suppresses these and diminishes soil health, farm biodiversity, water quality and air quality. The study found that the total economic value of ecosystem services from organic fields ranged from US$1,610 to US$19,420 per hectare per year; that from conventional fields ranged from $1,270 to $14,570 per hectare per year.

This analysis only partially employed the TEEBAgrifood framework because it covered only production. To investigate other trade-offs and impacts, researchers should also compare food affordability and the impacts of nutrition, human health and social equity between the two agricultural systems.

A second example concerns pesticide policies.

In the late 1980s, Thailand began encouraging the use of pesticides to increase agricultural yields. In 2010, productivity gains started to fall and policymakers became increasingly aware of pesticides’ harmful effects on the environment and health.

Researchers examined the effects of increasing taxes to make pesticides more expensive, and of encouraging farmers to adopt non-chemical forms of pest management (S. Praneetvatakul et al. Environ. Sci. Policy 27, 103–113; 2013). They considered the costs of enforcing food-safety standards. They also examined the risks of exposure to chemical agents. These risks were higher for farm workers than for consumers, so the researchers argued for an increased environmental tax. This, combined with support to encourage a switch to new farming practices, would deliver the greatest benefits most effectively, the researchers argued. Standard productivity measures could not have helped to assess such nuanced effects.

Sukhdev continues:

“We need many more studies to show how considering broad impacts leads to conclusions that differ from those based simply on market prices of output. Several pilots are planned or under way, and I encourage more researchers to test the evaluation tool in studies of farming, food products and policy scenarios, as well as in dietary comparisons.

“If we can keep the pressure of evidence strong for just five years, I expect to start to see large changes in how agricultural, health and environmental ministries across the world set policies, incentives, subsidies and taxes.

“Only if we diagnose our food system honestly, can we heal it”.

Source: Nature 558, 7 (2018)  doi: 10.1038/d41586-018-05328-1

 

 

 

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‘Build it in Britain’: Jeremy Corbyn at the EEF Technology Hub in Birmingham

Speech to the EEF manufacturers organisation, formerly the Engineering Employers’ Federation, which works with manufacturing, engineering and technology-based businesses in the UK – edited, emphases added

The launch of the ‘Build it in Britain’ campaign, Labour’s campaign to ensure a stronger future for industry with better jobs and opportunities here in Birmingham and in every part of Britain.

While the finance sector has continued to grow, a decade after the bankers’ crash and the super-rich have grown still richer. For too long, many of our communities have lost out in the global economy free-for-all. The few have succeeded, but at the expense of the many.

Mr Corbyn thanked John McDonnell, the Shadow Chancellor of the Exchequer, for all the work that he has done over the last three years to change the economic debate in this country, away from the dogma of austerity and cuts without end and winning the argument to focus instead on the need for investment if we are to succeed in the future. Rebecca Long-Bailey, Shadow Business Secretary, was also thanked for developing Labour’s plans for a real industrial strategy that will transform the shape of our economy and ensure prosperity is shared by every region and nation of the UK.

The thinking that it’s good, even advanced, for our country to manufacture less and less and to rely instead on cheap labour abroad to produce imports is rejected.

While the Conservatives are continuing as they always have done – skewing policy to the narrowest interests in the City of London while ignoring the needs of the vast majority in their bungled Brexit negotiations – Labour is setting out a genuinely new economic direction for our country.

This is necessary because for the last forty years a kind of magical thinking has dominated the way Britain is run. It has been said that it’s good, even advanced, for this country to manufacture less and less and to rely instead on cheap labour abroad to produce imports while we focus on the City of London and the financial sector.

While many economics professionals, politicians and City types insisted this was all a strength, the banking crash confirmed it was in fact a profound weakness.

A lack of support for manufacturing is sucking the dynamism out of our economy, pay from the pockets of workers and any hope of secure well-paid jobs from a generation of young people.

It must be Labour’s job in government to reprogram our economy so that it stops working for the few and begins working for the many. We will build things here again that for too long have been built abroad because we have failed to invest. Because Labour is committed to supporting our manufacturing industries and the skills of workers in this country we want to make sure the government uses more of its own money to buy here in Britain.

The state spends over £200 billion per year in the private sector. That spending power alone gives us levers to stimulate industry, to encourage business to act in people’s interests by encouraging genuine enterprise, fairness, cutting edge investment, high-quality service and doing right by communities.

Why is the Government sending a £1 billion contract and all the skilled jobs, tax revenues and work in the supply chain to build three new Fleet Solid Support Ships for the Royal Fleet Auxiliary overseas when we have the shipyards to build them here? There are workers in Liverpool, Belfast, Rosyth and Plymouth who are keen to do that work but when I visited some of those shipyards I learned something else too – there are not enough workers being trained here in the UK to meet the potential demand.

Labour is determined to see public contracts provide public benefit using our money to nurture and grow our industries and to expand the tax base

We have plenty of capacity to build train carriages in the UK and yet repeatedly over recent years these contracts have been farmed out abroad, costing our economy crucial investment, jobs for workers and tax revenues. Carrying on like this is simply not sustainable.

Between 2014 and 2017 Network Rail awarded contracts worth tens of millions of pounds to companies outside the UK while the NHS awarded contracts worth over a billion.

In the same period the Ministry of Defence awarded contracts elsewhere worth over £1.5 billion pounds even though we are under no obligation under either European or international law to open up defence contracts to overseas bidders.

The next Labour government will bring contracts back in-house, ending the racket of outsourcing that has turned public services into a cash cow for the few.

We will use the huge weight of the government’s purchasing power to support our workers and industries, using a three-pronged approach:

  • new procurement rules so that government supports jobs and industry;
  • investing in infrastructure to support companies here in Britain to keep goods flowing efficiently and costs low;
  • increasing investment in education, skills and lifelong learning through a National Education Service that we will create;
  • doing much more to support small and medium sized enterprises to participate in the tendering process instead of them being dominated by faceless multinationals.

Too often, we have been told by Conservatives who are ideologically opposed to supporting our industries that EU rules prevent us from supporting our own economy. But if you go to Germany you’ll struggle to find a train that wasn’t built there, even though they’re currently governed by the same rules as us.

When the steel crisis hit in 2016 Italy, Germany and France all intervened legally under existing state aid rules but our government sat back and did nothing. We will include public interest into these big public contracts, as was done with the contract to build the High Speed 2 railway.

By considering public interest such as job creation and the supply chains, we can grow our economy in a way that works for everybody. In the words of the Public Accounts Committee “there has emerged a small group of large companies which are expert at winning contracts but do not always deliver a good service”.

The next Labour government is committed to creating high quality jobs in every region and nation of the UK, to develop new industries and support good domestic businesses – large and small – extending the rights of local authorities in parts of the country worst hit by forty years of industrial decline to be exempt from some World Trade Organisation rules, as some US states are, and therefore be able to require provision for local suppliers and jobs in public contracts.

Industrial strategy – one example of this, the solar industry.

Once innovators, we are now falling back as the industry takes off across Europe. And why? British solar firms were hit by cuts to subsidies in 2015 and 2016 and changes to business rates for buildings with rooftop panels, to save a few pounds in the short term, costing us jobs and innovation.

As a result, between now and 2022 France is forecast to add five times as much solar capacity as the UK, Germany ten times.

Our strategy will help us upgrade industry to secure good jobs, win public contracts and compete on the international stage. It will help us build a clean, green 21st century economy, right here in the UK, building solar, wind farms and tidal lagoons to help us to tackle climate change.

It will focus on creating clusters to boost domestic supply chains to develop the virtuous cycle, where the success of one industry or company helps others.

We’ll give support to the sectors that we need to deliver the public contracts, to radically upgrade our creaking infrastructure, a core part of our industrial strategy.

investment plans to reprogram our economy for infrastructure, industry and for people, so that it works for every town, city and village in the country

It is why we are committed to a National Education Service which will provide both academic and vocational education on an equal footing to anybody that wants it, from cradle to grave. We cannot continue to see education as a commodity to be bought and sold, it must be there to give people the skills they need to flourish throughout their lives, equipping them with the skills we need to thrive.

Wanting to build it in Britain is not turning away from the world, nor some return to protectionism or Trump-style trade wars

It is about changing course so that people feel real control over their local economy and have good jobs that produce a consistent rise in pay and living standards, in every part of the UK. That’s why we are so determined to help companies in the UK that export their goods

Unlike the Conservatives, we know that after Brexit the single biggest assistance we can give our exporters is securing full, tariff free access to our biggest export market, the European Union. It’s so important that we seek to negotiate a new, comprehensive UK-EU customs union, with a British say in all future trade deal and arrangements.

BMW, Airbus, and companies after company has warned of the real and damaging effects of Conservative customs chaos. Theresa May and her warring cabinet should think again, even at this late stage and reconsider the option of negotiating a brand-new customs union. This decision needn’t be a matter of ideology, or divisions in the Tory Party. It’s a matter of practical common sense.

The Labour Party and the Institute of Directors, the CBI and the TUC agree, we need to negotiate a new customs union.

A botched Tory Brexit will sell our manufacturers short with the fantasy of a free trading buccaneering future which in reality would be a nightmare of our public services sold to multinational companies and our country in hock to Donald Trump whilst we all eat chlorinated chicken.

The rise of finance is linked to the demise of industry

Between 1970 and 2007 finance sector output grew from 5% to 15 % of total economic output. Manufacturing meanwhile decreased from 32% to 12%.

The next Labour government will rebalance the economy so that there is prosperity in every region and nation. We will do this by setting up a national investment bank and a network of regional development banks to provide capital to the productive, real economy that secures good skilled jobs.

We will focus relentlessly on ending the housing crisis caused by the Conservatives and their uncompromising commitment to the free market, building homes for the many not investment opportunities for the few and with them will come a new generation of zero carbon homes, creating new training opportunities and skilled jobs.

And we will shift taxation to disincentivise financial speculation, for example with our financial transaction tax, so that we all share in the wealth we all create. We want an economy with high wages, high levels of trade union representation for workers and high levels of educational opportunities for everybody.

We’re offering a new deal for businesses that want to get on.

The very richest companies must pay a bit more tax and pay their workers better and in return we will train our people to have the skills the economy needs, upgrade our creaking infrastructure and provide the planning and support to help industry compete on the world stage.

Firms our government does business with will have to:

  • properly pay their taxes,
  • respect workers’ rights,
  • provide equal opportunities,
  • protect the environment,
  • train their workers, pay their suppliers on time

and end boardroom excess by moving to a 20-1 limit on the gap between the lowest and highest paid.

The deal that we want to make with businesses will benefit the whole economy.

We can get rid of the magical thinking of the free market that has led to a minority becoming extremely rich at the expense of everybody else, replacing it with a new economy, transformed so that it’s run for and by the many, not the few.

And we will forge a new relationship between workers, manufacturers, communities and government to end the unregulated bankers’ rip off which has dehumanised our values and our economy while allowing a few to profit at the expense of the many.

For too many of our people today the spread of insecure work, low pay and zero hours or temporary contracts is causing stress, debt and despondency. Labour will reprogram the economy so that it works for the people of Britain and not against them. Now is the time to put people’s jobs and living standards first. We want to see well-paid jobs in the industries of the future, fuelling the tax revenues that fund public services and the NHS, rebuilding communities and increasing living standards for all. And we will build this economy, this future fair for all, right here in Britain.

To read the full text of Jeremy Corbyn’s ‘Build it in Britain’ speech at the EEF Technology Hub, go to https://labourlist.org/2018/07/build-it-in-britain-again-corbyns-full-speech/.

 

 

 

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What Labour should do now: inspire, promote and oppose: Professor Paul Rogers

In an Open Democracy article, Professor Paul Rogers focusses on the critical need for the Labour Party to inspire its electorate and the wider public.

It should:

  • Inspire people with innovative approaches on many key issues,
  • promote specific examples which illuminate the potential of a Labour government,
  • and oppose by repeatedly focusing on the problems that the Conservative government will be facing.

Rogers continues:

“The dominantly antagonistic and right-wing national press will cause all the trouble it can, especially for Jeremy Corbyn but also for Labour as a whole. Even so, large-scale public meetings will get local print and broadcast media coverage, with these outlets much more sensitive to viewer and reader opinion. Remember that many provincial dailies have readerships in their circulation areas that are close to the combined local readership of the nationals. Moreover, social media lend themselves to useful coverage.

“In doing this, one way to have a real effect is to change the nature of the whole debate. This still means speaking to and for the alienated and the marginalised – as a transnational elite presides over a relatively sidelined majority. . But it also means bringing in major new elements, some domestic but other clearly international, the latter focussing on Britain’s potential role in a post-Brexit world.

“So here are three domestic and three international elements. They are not exclusive of others or of issues already to the fore. They are merely examples – and there may well be better ones.

First, domestic:

Business

Invest in SME support but strengthen financial regulation, especially in the finance sector itself. Demand hugely more effective action on tax avoidance, but fund HMRC to ensure it has adequate expertise. Seriously take on tax havens. Increase higher tax rates. Offer fiscal and other support for mutuals, cooperatives, co-ownerships and other forms of business organisation. Halt and reverse creeping privatisation of the NHS and education while investing seriously in many elements of the national infrastructure.

Transport 

Cancel HS2 and replace it with heavy investment in upgrading the capacity and quality of rolling-stock on all major intercity routes. Opt for modest increases in speed but more emphasis on passenger comfort, especially less overcrowding. Invest in rapid and systematic electrification across the north starting with the Trans-Pennine route. Take Southern back into public ownership now and return railways to public ownership as franchises expire but within franchise periods if companies fail to deliver to newly set higher targets for service delivery.

Energy

Cancel Hinkley Point and replace with heavy investment in renewables, with far more emphasis on wind energy, both onshore and offshore, and invest heavily in research and development of new systems for generation and especially storage. Reverse recent government downgrading of green policies and put far greater emphasis on energy conservation.

Second, international:

Post-Brexit 

Accept Brexit, but use it to argue for a new international role for Britain which combines continued commitment to Europe as a whole with far greater emphasis on worldwide links, not least the Commonwealth. Thus, argue for the UK being in the unique position of unrivalled connections to Europe, north America and the global south, in facing the common global problems of the failing neoliberal economic system and critical environmental pressures.

United Nations and Security 

Support and commit strongly to effective United Nations peacekeeping, including a commitment to lead investment into a UN Emergency Peace Service. Prepare to lead on this, including a highly trained multinational standing force with Britain at the centre. Make Britain as the lead player in this field. Accept that the wars since 2001 have been disastrous and have left countries, including Britain, less secure. Demand a complete rethink of strategies using the best available analysts given a free rein to propose new options, however radical. In the light of Chilcot and the continuing problems with ISIS, this will strike a chord.

Environment and Development

Emphasise that climate disruption is the greatest long-term security threat to everyone, but especially to the marginalised. Maintain the development budget in full but call for the reform of DfID towards a far stronger commitment to action on deep poverty and gendered and sustainable development, all in the context of persistent anti-corruption policies.

In all cases, argue with confidence and never fail to remember four elements:

* The Conservative government has already had to reverse core policies

* The 2008 financial crisis had its origins in the banking system, starting with the toxic loan debacle in the United States. It was not the fault of Labour, but Labour had failed to regulate the financial sector adequately. The party will not let this happen again

* Individual bankers, hedge-fund managers and the rest are not the problem – it is the system itself which is the problem, because it is far more deep-seated and entwined with the progressive failure of the neoliberal economic system after forty-plus years. Only Labour recognises this and is ahead of the times, not behind them. Repeat this with confidence

* The greatest global threat comes from climate disruption – repeat ad nauseam.

Source: https://www.opendemocracy.net/paul-rogers/what-labour-should-do-now (2016)

 

 

 

 

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