MPs in the House of Commons have approved an amendment that would allow ministers to issue guidance stymieing the ability of public sector pension schemes, including the Local Government Pension Scheme, to pursue politically motivated boycotts and divestment policies.
Robert Jenrick, Conservative Party backbencher and former secretary of state for housing, communities and local government, tabled the amendment to the public service pensions and judicial offices bill in a bid to reverse a legal defeat suffered by the government in 2020, during his tenure as minister, when the Supreme Court lifted a ban on political investments.
The campaign against the government was led by the Palestine Solidarity Campaign, which compiled a database of 33 LGPS funds investing more than £2bn in arms manufacturers and companies it accused of supporting so-called illegal Israeli settlements.
Though the Supreme Court’s verdict technically allowed for LGPS funds to divest for a number of reasons, pro-Israel commentators and critics of the controversial Boycott, Divestment and Sanctions movement suggested that, in fact, campaigns to enable the LGPS to make political investments were a targeted attack on Israel.
The BDS movement has nothing to do with pensions and everything to do with politics
Simon Clarke, HM Treasury
Jenrick has been consistently critical of moves to pressure LGPS funds to boycott Israel, writing in a column in The Times: “Pensions that are paid for by the taxpayer and underwritten by the state should not undermine our foreign and defence policy.”
The government pledged last year to introduce a bill to reinstate the ban. Jenrick said he hoped his amendment would presage a wider bill outlawing BDS “throughout the public sector”, but the prospect of this new bill led the LGPS Scheme Advisory Board to predict that his amendment would fail.
However, in a debate in the House of Commons on February 22, the government backed the amendment and MPs voted by a majority of 218 in its favour.
BDS is politics, not pensions
Speaking in parliament, Jenrick said that public sector pension schemes had been pursuing “pseudo foreign policies”, particularly with respect to the state of Israel. He cited specific instances of LGPS funds opting for divestment policies at the urging of “an extreme and well-organised clique”.
While the Supreme Court found in favour of the PSC, ruling that the secretary of state did not have the power to issue guidance against these practices, Jenrick’s amendment would explicitly give ministers that right, thereby overturning the Supreme Court’s ruling.
“We can’t stand idly by and see levels of antisemitism in this country continue to rise,” he said.
We have to be taking every opportunity to tackle this issue. This is one way in which we can do that. There are many others.
“The BDS movement does absolutely nothing to advance the cause of peace,” he continued.
“It is because the BDS movement sees Israel as a colonial endeavour that they view the Israel-Palestine question as an insurmountable framework of conflict between occupiers, in their eyes Israeli Jews, and the occupied, in their eyes Palestinian Muslims.”
Treasury minister Simon Clarke voiced the government’s support for the bill, reaffirming its manifesto commitment “to stopping public bodies from running their own direct or indirect boycotts and the wider BDS movement and I’m grateful to [Jenrick] for all the hard work that he has done to draw the House’s attention to this important issue”.
He added: “The BDS movement has nothing to do with pensions and everything to do with politics. It has had the chilling effect of legitimising antisemitism among the hard left.”
Not all were happy with the amendment, however. Labour MP John McDonnell, shadow chancellor under Jeremy Corbyn, said: “I believe that only in extremis should the state interfere in one’s own privately earned income.”
Labour MP Zarah Sultana voiced her concern that the amendment deny tout court the ability of public sector pension schemes to make decisions on ethical grounds, such as in the case of arms manufacturers or companies “that are setting our planet on fire”.
The amendment “is so vague and so badly worded that it would have a chilling effect on public sector pension investments. It could be weaponised against any human rights campaign that raises concerns about pension investments in any company that is not formally on a UK sanctions list”, she warned.
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Ben Jamal, director at PSC, said: "The attempts to delegitimise the BDS movement are shameful. Boycotts and divestments are time-honoured tactics rooted in universal principles of accountability and justice used throughout history by those concerned about being complicit with supporting systems of injustice (...).
"Pension schemes should divest from companies involved in illegal activity, and are legally entitled to do so."
Omar Barghouti, co-founder of the BDS movement for Palestinian rights, added: "This amendment is not merely anti-Palestinian, it is also a shocking form of anti-democratic repression. It attempts to prevent UK taxpayers and their elected local councils from avoiding investment in war crimes, fossil fuels, apartheid and grave human rights violations."
