A secretive trade deal between the US and the EU. Photo: Flickr/Flazingo Photos
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TTIP: the biggest threat to democracy you've never heard of

A trade agreement between the EU and the US currently under secret negotiation will have a profound impact upon our democracy, but it’s been overshadowed by more typical eurosceptic coverage in the media.

Last weekend, The Daily Mail published a guide to vacuum cleaners being removed from the shelves as a result of new EU regulations. Yesterday the Daily Express said that now the EU is coming for our kettles. These are typical eurosceptic tabloid stories that have had many people fired up; they’ve turned relatively niche issues into a mainstream panics. So why then has the wide-reaching impact of TTIP been relegated to niche issue status?

TTIP, the acronym for the Transatlantic Trade and Investment Partnership, is an agreement between the US and the EU currently in the negotiation stages. It is being negotiated in what are highly secretive circumstances; the majority of what we know comes from leaks. What we do know though is that the treaty will have significant repercussions for our democracy. The treaty, if passed, will provide powers to corporations that raise serious questions about where the power lies in the world today.

No doubt many of those reading this will have at some point heard someone give a stereotypically vague and lefty rant about "the corporations" in a pub or on the street with a placard. It seems though that if TTIP goes through, this concern will no longer be the preserve of the few but of the many. TTIP will provide transnational corporations with the power to sue governments for lost future profit as a result of government actions; the case would then be taken to a secret arbitration panel, which makes its decisions based upon the ominously phrased, ‘free market values’.

An American union has, for example, warned that under this agreement a corporation could sue a government for raising the minimum wage. In another example that is perhaps specifically worryingly for Ed Miliband, a similar trade treaty meant that when Argentina froze water and energy prices in the recession, the government was consequently sued by international utilities corporations for the profit they had lost out on. Through removing the regulatory differences between the different markets in order to pursue profit, TTIP is essentially legally ensuring that corporations outrank governments.

Given this grave threat to British democracy, why is TTIP so starkly absent from our media? Behind the multiple stories of bananas, hoovers and kettles lies the fear that the UK is no longer being ruled by its own government; that is the crux of what fuels many people’s euroscepticism. TTIP, which represents a fundamental shifting of power, not from one government to another, but away from government entirely, is absolutely a threat to sovereignty and yet it has so far been largely ignored.

To be fair, it’s a pretty complex issue and frankly it’s harder to get people fired up about trade agreements, which appear abstract and removed, than it is about their kitchen appliances. Perhaps in this regard it is a similar political issue to climate change: both are highly complicated, often technical and do not sit comfortably within one area of policy or interest, but rather affect multiple areas. That being said, it is not as though these reforms will not produce the kind of stories that gain traction in the media; if the movements of the European Court of Human Rights can make headlines for overruling the UK, then surely a multinational corporation suing a government can? And if that doesn’t work, what about the fact that the NHS is not excluded from TTIP, leading many to fear  imposed privatisation and systemic changes.

It’s not even as though large corporations are all that popular in the press anyway. Just look at G4S, the security company that appears "too big to fail" despite a history of rank incompetence. Remember the anger after G4S failed to fulfil its security obligations for the 2012 Olympics? Just imagine how angry it would make people to learn that G4S would essentially outrank the government as a result of TTIP. This isn’t an issue just for the left, or even for those who believe that the government should be bigger than corporations; for a government to be able to govern, it must be able to set policy without fear of financial repercussions.

Who do you want governing you? A democratically elected government or an unaccountable multinational corporation? It makes the old maxim that money is power into a brutal reality.

One major justification for TTIP is that it will generate around an extra 1 per cent in GDP growth. The question that has to be asked is whether this 1 per cent is worth the damage to our democracy? I would say it's clearly not. This is the greatest threat to democracy that we don’t know about, and that’s more important than how powerful your vacuum cleaner is.

Dan Holden is deputy editor of Shifting Grounds

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By refusing to stand down, Jeremy Corbyn has betrayed the British working classes

The most successful Labour politicians of the last decades brought to politics not only a burning desire to improve the lot of the working classes but also an understanding of how free market economies work.

Jeremy Corbyn has defended his refusal to resign the leadership of the Labour Party on the grounds that to do so would be betraying all his supporters in the country at large. But by staying on as leader of the party and hence dooming it to heavy defeat in the next general election he would be betraying the interests of the working classes this country. More years of Tory rule means more years of austerity, further cuts in public services, and perpetuation of the gross inequality of incomes. The former Chief Secretary to the Treasury, Seema Malhotra, made the same point when she told Newsnight that “We have an unelectable leader, and if we lose elections then the price of our failure is paid by the working people of this country and their families who do not have a government to stand up for them.”

Of course, in different ways, many leading figures in the Labour movement, particularly in the trade unions, have betrayed the interests of the working classes for several decades. For example, in contrast with their union counterparts in the Scandinavian countries who pressurised governments to help move workers out of declining industries into expanding sectors of the economy, many British trade union leaders adopted the opposite policy. More generally, the trade unions have played a big part in the election of Labour party leaders, like Corbyn, who were unlikely to win a parliamentary election, thereby perpetuating the rule of Tory governments dedicated to promoting the interests of the richer sections of society.

And worse still, even in opposition Corbyn failed to protect the interests of the working classes. He did this by his abysmal failure to understand the significance of Tory economic policies. For example, when the Chancellor of the Exchequer had finished presenting the last budget, in which taxes were reduced for the rich at the expense of public services that benefit everybody, especially the poor, the best John McConnell could do – presumably in agreement with Corbyn – was to stand up and mock the Chancellor for having failed to fulfill his party’s old promise to balance the budget by this year! Obviously neither he nor Corbyn understood that had the government done so the effects on working class standards of living would have been even worse. Neither of them seems to have learnt that the object of fiscal policy is to balance the economy, not the budget.

Instead, they have gone along with Tory myth about the importance of not leaving future generations with the burden of debt. They have never asked “To whom would future generations owe this debt?” To their dead ancestors? To Martians? When Cameron and his accomplices banged on about how important it was to cut public expenditures because the average household in Britain owed about £3,000, they never pointed out that this meant that the average household in Britain was a creditor to the tune of about the same amount (after allowing for net overseas lending). Instead they went along with all this balanced budget nonsense. They did not understand that balancing the budget was just the excuse needed to justify the prime objective of the Tory Party, namely to reduce public expenditures in order to be able to reduce taxes on the rich. For Corbyn and his allies to go along with an overriding objective of balancing the budget is breathtaking economic illiteracy. And the working classes have paid the price.

One left-wing member of the panel on Question Time last week complained that the interests of the working classes were ignored by “the elite”. But it is members of the elite who have been most successful in promoting the interests of the working classes. The most successful pro-working class governments since the war have all been led mainly by politicians who would be castigated for being part of the elite, such as Clement Atlee, Harold Wilson, Tony Crosland, Barbara Castle, Richard Crossman, Roy Jenkins, Denis Healey, Tony Blair, and many others too numerous to list. They brought to politics not only a burning desire to improve the lot of the working classes (from which some of them, like me, had emerged) and reduce inequality in society but also an understanding of how free market economies work and how to deal with its deficiencies. This happens to be more effective than ignorant rhetoric that can only stroke the egos and satisfy the vanity of demagogues

People of stature like those I have singled out above seem to be much more rare in politics these days. But there is surely no need to go to other extreme and persist with leaders like Jeremy Corbyn, a certain election loser, however pure his motives and principled his ambitions.

Wilfred Beckerman is an Emeritus Fellow of Balliol College, Oxford, and was, for several years in the 1970s, the economics correspondent for the New Statesman