At the last Labour Party conference, delegates voted to retain existing public enterprises in the hands of the Irish people. This was a clear affirmation of the extent to which members still identify with the core principles of the Party and are willing to defend them, something which alone makes the support for public enterprise a central aim of the Campaign for Labour Policies, as a movement whose objective is to provide a critique of austerity and articulate a progressive alternative consonant with the principles of ordinary members.

It is not necessary, however, to look just through the prism of Labour values to appreciate the economic benefits of public enterprise. Newly independent Ireland had a largely agrarian economy and was of little interest to foreign investors. It took radical government measures – the establishment of the Agricultural and Industrial Credit Corporations, Aer Lingus and Irish Life – to fill the gap, providing credit and stimulating economic activity, paving the way for the full industrialisation of the Irish economy.

The remarkable contribution of the semi-state assets to the economy is as visible today as ever, when we see their extraordinary resilience in the face of the economic crisis. The sector operates very profitably and its profits are returned to the Irish people in the form of a dividend. The McCarthy Review on State Assets showed ESB/Electric Ireland leading the way in earnings, in the black to the tune of €580 million, which alone was enough to cover the losses of the four largest loss-making companies more than three times over[i]. The fact that the semi-state sector consistently runs a surplus enables it to subsidise expensive but crucial services, for example, public transport to reach out to people in remote areas, and gives the government additional money to develop the infrastructure which the economy requires to thrive.

By contrast, private ownership would sharply curtail the strategic vision and objectives of the companies. Divided up and each motivated by profit, there would be no mechanism enabling the largesse produced by the wealthiest companies to be used to support vital services provided by smaller and less profitable. The privatisation of Éircom provides an example of the catastrophic effects of relinquishing public control. It was passed from owner to owner like a hot potato and each one stripped it of capital. Having been debt-free when publicly-owned, as a private company it racked up €4 billion in debt. The fact that Ireland now has one of the worst levels of broadband provision in the EU owing to the lack of co-operation from privatised Éircom with its plans is an indictment of the strategic myopia of for-profit companies.

Rather than flogging off flagship public enterprises for amounts that would only keep the country going for days, we should prioritise the country’s long-term economic future. There is no sign of a let-up in the investment strike which has characterised the private sector. Investment has fallen by €21 billion since 2007. Although 2012 saw a tiny increase, it was from a point so low that it has been estimated[ii] that it would take an entire century at current levels for investment to return to pre-recessionary levels. As recent economic figures have shown that Ireland dipped back into recession in the second half of last year[iii], even that may be optimistic.

There is no motive for firms to invest in a bankrupt country. Trying to make the country more “competitive” by reducing labour costs and refusing to raise the corporate tax rate has had the reverse effect: less money for people to spend on goods and services and less money for the government to use to upgrade infrastructure will not attract investment. We should instead harness the economic resources we do control. Increased investment in public enterprise would have the dual benefit of generating employment and stimulating further economic activity. Examples of public investment that would do so include a national roll-out of broadband and an expanded role for the Irish State in the extraction and sale of our natural oil and gas reserves, whose known worth alone is estimated at €750 billion, but little of which currently goes to the State, which can currently be charged full market prices for its own resources by private corporations[iv].

The Campaign for Labour Policies believes that it is the will of the Party membership and in the interests of the country that our semi-state assets remain in the hands of the public. Public enterprise enables breadth of economic planning, and represents the most potent instrument we have to create jobs and put the economy back on its feet.



[i] Colm McCarthy, et al, Report of the Review Group on State Assets and Liabilities, April 2011


[ii] Michael Burke, Irish Left Review, 23 March 2013


[iii] Central Statistics Office, Quarterly National Accounts, 21 March 2013


[iv] SIPTU, Optimising Ireland’s Oil and Gas Resources, 4 July 2011


 
 
                                                                                                                                                                                                        By Ciarán Connolly
Monaghan Labour attend Anti-Austerity March

The Monaghan Labour branch attended the Anti-Austerity march that took place in the Dublin on November 24th. Organised by the Dublin Council of Trade Unions, the event brought almost 20,000 people onto the streets to give voice to their growing frustration and anxiety over Ireland's perilous financial commitments to bondholders and bankers and the European financial system. Though it was organised by the trade union movement it was open for community groups and volunteer organisations to attend and it is testament to just how deeply the cuts are biting that so many groups from all over the country felt they had to make the trip to the capital to make sure their voices were heard.

The Monaghan Labour branch does not accept that the current form of austerity being pursued by the government is the only option available. The targeted cut that the EU/IMF want does not dictate how the target is achieved. That is a political decision and this means that the government gets to choose who pays the price. Low and middle income earners must be protected in the next budget and there are carefully prepared and economically verified proposals from other groups on how this might be achieved in a fair and balanced way. Groups such as the Irish Congress of Trade Unions, Claiming Your Future and the Campaign for Labour Policies have come up with alternatives to the recent reductions to the incomes of low and middle income earners. These should be given careful consideration as austerity is nothing more that a form of slow economic and social suicide. It depresses demand in the economy which means the small businesses which provide so much employment around Monaghan are suffering. The Fine Gael led government can and must do better to keep these businesses open and to close the increasing gap between the rich and poor of this county and this country.
 
 
Éilis Ryan 
Do you want even more evidence of just how damaging cuts to public spending are to our society, and our economy? 

Sonas Housing,  who provide crisis shelter to women at risk of domestic violence, this morning reported that they turn away four out of every five women who knock on their door seeking refuge, because of lack of funding. It's an extraordinary number, but unsurprising given that the number of shelter spaces in Ireland is less than a third of what European human rights bodies recommend. 

It's yet another example of how underfunded public services and supports are in this country. It's obvious to anyone who's looking that, for a Labour party, we need more, not less, state funding for services like education, health, and things like domestic violence shelters. Our state has a responsibility to protect and support its citizens - and it needs  funding to doing that. 

That's why, as a Labour member, I am so convinced of the critical importance of the Campaign for Labour Policies' pre-budget submission, Growth through Solidarity. 

At its launch today, our spokesperson Neil Warner spoke of how, amongst other things, state funding for strong public services and supports is at the core of progressive, left-wing political values.  Speculation is that two-thirds of savings in Budget 2013 will come from spending cuts. To us, as Labour members, this makes no sense. Ireland is currently a disproportionately low-tax, low-spend economy, and it is clear that savings should be made by increasing taxation levels to international norms and, by doing this, laying the foundations for a genuine welfare state.

Austerity is broken on every front. Morally, it is indefensible that the last budget fell more heavily on the bottom 40% of households than on the richest 30% - such inequality is anathema to Labour values.[1]  But even according to the neoliberal logic of the proponents of austerity, the cuts have failed: our economy continues to stagnate and the dole queues continue to grow. 

It's time for an alternative, and the members of the Labour party are leading the way. 

[1] http://www.esri.ie/UserFiles/publications/QEC2011Win_SA_Callan.pdf


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There is a movement developing among Labour Party members to promote what we perceive as the genuine Labour Party values and policies which have so far been neglected in the party’s coalition with Fine Gael.

The movement is driven by growing dissatisfaction ordinary members at the direction of the current government.

The Campaign for Labour Policies, as our group is called, will be officially launched at a meeting open to all party members in Dublin this Saturday.

The group has been gradually developing since the beginning of this year. As frustration with the progress of government has grown, so has the impetus to found a concrete group to propose an alternative. Initially over a hundred members met in January to voice their frustration and formed a less political group to air members’ concerns called the Labour Members’ Forum. By May of this year, however, a sense was building that something more explicitly political was also needed.

Many of us felt extremely frustrated with the way in which the party conference in April was railroaded in a very undemocratic manner. This was followed quickly by confirmation of punitive changes to lone parents’ allowance in the Social Welfare Bill.

As a response, many of us have been meeting over the course of the summer to draft an alternative set of policy proposals which will be put to the wider meeting of members on Saturday.

There are five things that Labour could be doing differently…

These have been built around five basic points . Firstly, given the continuing poor performance of the Irish economy, we want to kick-start investment and domestic demand with an additional €2 billion from the state’s own resources in 2013. If paid for either through the National Pension Reserve Fund or the state’s current liquid assets, such a stimulus would not add to the national debt.

Secondly, we believe that public finances should be repaired by taxation on high income groups. Ireland current taxation level is among the lowest in Europe while public spending is also well below the European average. This means that much of the savings which need to be made in Ireland’s finances could be done by increases taxes in way which would still not be particularly burdensome in international terms.

Yet, perversely, the majority of budgetary savings so far enacted have focussed on spending rather than taxation. This is in spite of the fact that spending cuts have a more deflationary effect on the economy than tax increases, especially those targeted on people with high incomes. What is more, even those taxes which have been implemented have often been highly regressive – such as the VAT increase of last year. We find this state of affairs to be utterly repugnant to the basic egalitarian values of the Labour Party as we understand it.

Thirdly, there should be no sell-off in semi-state enterprises. Instead, current enterprises should be used to stimulate investment in the economy. This position also fits with a mandate adopted by the Labour Party conference in Galway in April 2012, when delegates voted against any sale of semi-state assets.

Fourthly, we are calling for an increase in workers’ rights, again to bring Ireland in line with basic European norms. Specifically, we want to legislate for the right to collective bargaining and for part-time workers to get access to full-time work if it is available in their workplace – something which is already demanded by a European Commission directive. Again, these are fundamental Labour Party principles in which there has been no progress since the formation of the government and seems to be no sign of progress.

Finally, we are calling for the suspension of all promissory note payments and negotiation of a new deal based on a complete write-down of bank debt.

The Campaign for Labour Policies is very mindful of the restrictions imposed by coalition government and of the difficult decisions that need to be made by in the current climate. However, we also believe that if a party is to commit itself to government, it must feel that in some sense its basic values are being promoted. The course of government so far, and the increase in inequality which Ireland has experienced since 2011, has not really given us anything that can make us feel this is being done. For this reason we have really felt left with no choice other than to propose and fight for this alternative path.