Financial crisis ten years on: How the world's response hit human rights protections

I remember clearly being in New York a decade ago, in September 2008, standing outside the Lehman Brothers headquarters, an eerie façade on an otherwise buzzing sidewalk.

There was a sense of foreboding about what the collapse of the financial markets would mean. How would governments and financial institutions respond?

As a young human rights lawyer, I was yet to understand how some of the resulting economic reforms and policy choices would lead to widespread, systematic regression in the realisation of economic and social rights across the globe, across Europe, and in the UK and Scotland.  

Fast forward 10 years and I am back in New York attending a consultation meeting of the United Nations independent expert on the effects of foreign debt and other related international financial obligations on the full enjoyment of all human rights.

The independent expert, Juan Pablo Bohoslavsky, is developing guiding principles on human rights impact assessment of economic reform.

I am here representing the Scottish Human Rights Commission to contribute our perspective based on a decade of work promoting human rights in law, policy and practice.

Since 2008, rising fiscal deficits due to falling government revenues led many governments, including the UK, to adopt austerity measures on a scale unprecedented in recent peacetime.

In some countries such as Greece and Italy these austerity reforms were promoted, and indeed insisted upon, by multilateral and regional financial institutions.

The adoption of fiscal consolidation programmes as a means of securing financial recovery may be debated by economists.

However, there has been a very clear human cost of such programmes, when they do not adequately take into account the impact on people’s human rights in real life.

We’ve seen a lack of coherence between states’ economic policies and their international legal obligations to respect, protect and fulfil human rights such as the right to just and favourable conditions of work, the right to social security and the right to an adequate standard of living on the basis of non-discrimination.

This de-prioritisation of human rights has undoubtedly led to increased disenfranchisement of many, undermining public confidence in both democratic institutions and the rule of law.

In the UK context, significant and unprecedented changes were introduced to the social security system and public sector spending between 2010 and 2016.

It is estimated reforms introduced since 2010 saved around £26bn by the end of 2017, roughly 10 per cent of what social security spending might otherwise have been.

Unsurprisingly the impact of these reforms has not been felt equally across society.

Disabled people, children, lone parents (around 92 per cent of whom are women), and minority ethnic households have been hit hardest.

When combined with other public finance cuts in areas such as housing and justice, the cumulative impact has been severe, too often leading to destitution, discrimination and retrogression in the realisation of their rights.

One key lesson from the last 10 years is that states need practical tools to help navigate rights obligations and impacts in difficult times.

They also need tools to build their capacity to embed human rights in fiscal, monetary and social policy in less difficult times. This week’s meeting at the UN in New York is discussing human rights impact assessment as one such practical tool.

For states (including devolved states, local governments and lending institutions) human rights impact assessment means giving meaningful consideration to their obligation to use the maximum available resources to progressively realise people’s economic and social rights, both without discrimination and without unjustifiable retrogression.

It means ensuring that minimum levels of subsistence are secured, not undermined.

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It means drawing on data as well as the testimony of people with lived experience of the issues, to understand the cumulative impact of reforms. It means building human rights analysis into the cycle of formulating, executing and assessing budgets.

Back in 2015, I led a project which piloted the use of Equality and Human Rights Impact Assessment with local authorities in Scotland.

In one locality we focused on the impacts of welfare reform on lone parents. We held sessions hearing directly from both lone parent families and services supporting those families.

A bleak picture emerged of the impact of reduced payments, sanctions and a lack of support to deal with the new system, particularly appeals.

Although the authority didn’t have all the levers of power to make changes, hearing directly from those affected did allow them to put in place mitigation and support.

In Scotland the UN guiding principles being developed could be put into practice by embedding human rights impact assessment, budgeting and budget analysis more systematically at devolved and local government level.

Powers devolved to the Scottish Government could be used to better realise people’s rights, particularly in relation to social security, housing and tax.

There is also potential to embed the standards of economic and social rights, such as the right to social security, health, housing and food into Scots law, giving a backstop of protection and recourse to justice where violations occur.

In the UK, Brexit and its widely anticipated economic fallout is fast approaching. Human rights impact assessments, carried out with participation, transparency and accountability at their core, have the potential to guide any resulting economic reform measures.

The last decade has demonstrated that states ignore the human cost of economic reform at their own peril.

Retrogression in people’s rights and the destitution experienced by those most in need, violates fundamental rights protections for those affected.

It also erodes the fabric of our societies and the international rule of law. Initiatives such as these new UN guiding principles are therefore critical as a way to embed human rights considerations into future economic, fiscal and social policy making at all levels.

Kavita Chetty is head of strategy and legal at the Scottish Human Rights Commission