Anti-boycotts bill introduced to shape LGPS divestment policies
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The government introduced the economic activity of public bodies (overseas matters) bill on Monday to prevent councils, their pension funds and others from boycotting countries or companies that the UK has friendly relations with. A group of 68 civil society organisations has condemned the bill as an attack on freedom of expression.
Through the legislation, the government is overriding a 2020 ruling by the Supreme Court against it. Those who break the rules could face fines, with ministers among others being able to conduct investigations into suspected breaches.
The levelling up, housing and communities secretary, Michael Gove, said: “It is simply wrong that public bodies have been wasting taxpayers’ time and money pursuing their own foreign policy agenda. The UK must have a consistent approach to foreign policy, set by UK government.”
UK history has episodes where councils acted against UK foreign policy. Most notably, the UK maintained relations with apartheid South Africa, initially voting against financial sanctions at UN conferences, while several Scottish cities awarded Nelson Mandela their freedoms in the early 1980s. Glasgow famously renamed St George's Place to Nelson Mandela Place in 1986 - apartheid South Africa’s consulate was located there.
The current government vowed to introduce the boycotts legislation in its Conservative manifesto, some months before losing a three-year court battle about divestment against the Palestine Solidarity Group in 2020. The government had restricted Local Government Pension Scheme divestment policies since 2016.
DLUHC blamed divestment policies that target Israel for leading to community tensions and a rise in antisemitism.
“These campaigns not only undermine the UK’s foreign policy but lead to appalling antisemitic rhetoric and abuse,” said Gove.
The president of the Board of Deputies of British Jews, Marie van der Zyl, said the group was pleased to support the bill. It will stop “the unnecessary and inappropriate targeting of Israel by local authorities and other public institutions”, she said, adding that investment policies targeting the country were “deeply unsettling to local Jewish communities”.
A group of 68 civil society groups, including trade unions, faith groups and charities, led by the Palestine Solidarity Campaign, pledged to fight the bill, concerned it will prevent public bodies from making decisions in line with ethical investment principles and to divest from companies involved in violations of international law or human rights.
PSC director Ben Jamal said: “The anti-boycott bill is a major attack on freedom of expression. Boycotting is a legitimate, historically recognised tactic that has been the engine of great leaps forward for social and international justice, such as the ending of apartheid in South Africa. If passed, this law will have a chilling effect on all campaigns for social and political change, by trying to remove a key tool for peaceful activism, while protecting the profit-making interests of corporations at any social and environmental cost.”
Sharon Graham, general secretary of Unite the Union, said the bill was an assault on workers by a government keen to suppress the right to protest.
“The targeting of the Local Government Pension Scheme is particularly outrageous. This is not the government’s money. It represents the deferred wages of our members, and they have every right to say how they want it invested and to demand divestment from companies complicit in attacks on workers and communities. We strongly oppose this law and will continue in our work to defeat it,” she said.
Banning public bodies from boycotting unless they support UK foreign policy would be “a frightening and authoritarian step”, said Friends of the Earth (England, Wales and Northern Ireland) head of political affairs, Dave Timms.
He added: “In the US, the fossil fuel lobby has used anti-boycott legislation to try and restrict climate activism - we must not let the same thing happen here."
The department said the ban would not change the UK’s approach to the Middle East Peace Process or its position on settlements, which are illegal under international law.
What is your view on public bodies having to invest in line with UK foreign and defence policy?
