Here at Jubilee Scotland we are very worried about this deal passing – the precedent that this sets for other such all-encompassing trade deals and the large-scale hand over of power from governments to corporations.

So, we decided to write to all the Scottish Members of the European Parliament asking them to vote against the deal and we hope you do too. You can find our letter here:

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[Sent to the MEPs on the 25th of November, 2016] 

Dear MEPs,

The vote on CETA is fast approaching and so we thought it was an important time to express our concerns with the deal and join the millions across Europe asking you to vote against it. CETA is much more extensive than current trade deals- and not in a good way. This deal encroaches on our lives in so many different ways and could have detrimental effects on our environment, on our national health service and all the public services that we hold dear. Public services that allow us to protect and support the poorest in society are incredibly important and signing a trade deal which forces increasing levels of privatisation will erode these services.

Astonishingly, last night it was voted that the most controversial part of the deal – the Investment Court System- would not go to the European Court of Justice before the deal is voted on. That means the deal currently includes the ability for corporations to sue governments in a new, special court. We do not want corporations to control our economies and be able to override our democracy.  Look to the experience of Canada since it signed NAFTA – a less intrusive trade deal – it is now the most sued country in the Western world. Giving corporations the power to sue governments if they pass legislation that will harm their profits will lead to us seeing even more value and power handed to those who value profits more than they value people’s lives. Under this trade deal we probably would not have been able to pass legislation banning damaging vulture funds from using our UK courts or pass new legislation limiting the profits banks make and pass on in bonuses. None of these changes are positive.

However, this deal will not only be detrimental for the Scottish people but will have global ramifications. This deal will force more people into free trade and liberalisation and could have a drastic effect on the developing world. In addition, deals like this are diverting trade away from the developing world and shutting them further out of the market. We cannot let these deals become the norm. We cannot let this deal set the precedent for future deals.

These are some of the many concerns we have against CETA and we would be happy to meet with you to discuss this further.

We very much hope that you will do the right thing and vote against CETA in the European Parliament.

Thank you,

Kirsty Haigh
Campaign Director
Jubilee Scotland

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Join us in writing to your MEP and expressing your concerns now. If you don’t have time to draft your own letter you can use the handy tool Global Justice Now created to email them in just a couple of minutes:

For some more information here’s a video ‘Lessons from Canada’ made the Council of Canadians about why CETA will be so devastating: 

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Put simply every year Scottish Local Authorities are forced to allocate on average 42% of their income from council tax to servicing debts, many of them procured since 2008.

The problem is not that local authorities have been borrowing to finance large scale works – this is entirely reasonable and normal – it is how they have secured funding for such projects. Many of the loans in question were agreed with terms that disfavoured local governments through LOBO loan agreements (lender option borrower option). LOBO loans  have initially favourable rates but these  can be renegotiated at the prerogative of the lender every few years where the lender has the option to increase the rate, with the borrower having the option to either repay the loan in full or accept the rate change. Local authorities financing schools with LOBO loans rather than their traditional Public Works Loan Board loans is comparable to an individual paying for their extension with a Wonga Loan rather than a re-mortgage. It is an easier way to access large amounts of money, but less stable than the alternative. In short private financial institutions are benefitting from the high interest payments they receive from local authorities which – given the fact they can effectively raise interest rates whenever they choose – could convincingly be likened to legal extortion. Local authorities cannot afford this and in the most extreme case, that of the Western Isles Council, 103% of their income from taxes goes to service long term debt.

The Scottish Green party have asserted that as the loans were agreed on unethical terms they ought to be wiped completely. The Scottish Conservatives, however, have stated that to do so would be ‘irresponsible and unfair’. The Accounts Commission (whose self-proclaimed mandate is to hold Scottish councils to account and help them improve) has asserted that regardless of how the debt was procured and what it was used for they will have to be paid off by their respective councils. Perhaps they could help Scotland’s Local Authorities to avoid taking on toxic debts in the future?

One might ask what tempted Local Authorities up and down the country to take out LOBO loans in the first place? After the 2008-2009 financial crash and the Conservative-Liberal Democrat coalition budget cuts after 2010 councils looked to ways to fill the budget void. Add on to this the fact that George Osborne raised the interest rate offered to councils by the Public Works Loan Board – their traditional go to for credit- and all of a sudden LOBO loans started to seem like an attractive alternative. Although short sighted, the loans were taken out to stop cuts in front line services when they would have affected people most – and this is not something they ought to be punished for doing.

Although it may not be financially viable, or responsible, to write off existing loans with a no-consequence approach, it is imperative that the Scottish, and indeed British, Parliaments recognise that there is a major problem that must be confronted. The governments could take responsibility for the debt – thereby getting it out of the hands of private corporations – and pledge to stop any future loans being agreed on this basis. At this point, government intervention is required. It would not serve Scotland’s Local Authorities well to skirt around the issue and brush them under the carpet, only for them to manifest themselves into a far more ghastly problem for another administration to deal with; it would just be to cut off our nose to spite our face. And this is not a problem that solely concerns Scotland. Westminster must smell the coffee – although that, perhaps, is unlikely to happen given the current political situation.

Jubilee Scotland is currently doing work to fight these dangerous LOBO loans. This work is campaign against Scottish Local Council Debt. 

If you would like to write a piece for our website then please get in touch via mail@jubileescotland.org.uk

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