Government gives green light to anti-democratic pension investment policy

7 October 2016 - 3:30pm
War on Want in the news

Ryvka Barnard is War on Want's Senior Militarism and Security Officer.  This article first appeared in Ethical Consumer.

After months of waiting, the government has finally responded to a consultation on its controversial new policy that will prevent local authorities from democratically deciding how their pensions should be invested. 

When the government proposed the policy back in November 2015, over 23,000 members of the public, trade unions (including UNISON who represents the local government pension holders), and other groups responded to the consultation.

An overwhelming 98% of respondents to the consultation rejected the government’s move to ban local authorities from determining their own investment strategies and instead hand central government the power to veto decisions it doesn’t like.

And the government’s response to this public concern? Too bad, we are going to do it anyway.

If the policy banning local government pension holders from determining their own investments wasn’t outrageous enough, having put it out to consultation, the government is now admitting it will completely ignore the results. This whole episode shows the government’s utter contempt for the public and their views, and its complete lack respect for the democratic process.

Attack on local democracy

Meanwhile, the government is trying to appease public concern by affirming that local authorities can still consider social and environmental issues when drawing up investment policies. But in the same section, it explicitly condemns the grassroots Boycott, Divestment and Sanctions (BDS) movement targeting corporate complicity in the Israeli military occupation, saying that the government considers it “inappropriate” for local authorities to boycott or divest from companies involved in UK defence industry. 

This line makes clear that the ban could include local authority campaigns calling for divestment from companies such as G4S or Hewlett-Packard (HP), involved in providing military and security systems for the Israeli prisons, checkpoints, and military. It could also prohibit local authorities from divesting from companies like Elbit Systems, an Israeli company with several factories in the UK making drone components exported to Israel and used in attacks on Palestinians.

Under the new policy, if a local council was invested in one of these companies and decided to take its money elsewhere, the central government could step in and reconfigure the investment strategy, even going against the will of the pension holders themselves. This an attack on local democracy, and tens of thousands of members of the public agree.

BDS Movement

We boycott and divest from these companies because there is documented evidence of their complicity in human rights abuse and other violations of international law. It is because thousands of people in the UK and around the world have decided that it is our right and our moral obligation to withhold our support from companies involved in harming people and the environment.

It seems that the government not only wants to take decision-making powers out of the pension holders’ hands, it also wants to define for us what issues we are allowed to care about. So, if you want to make sure your pension is not invested in an arms company producing weapons used in war crimes, because you’re concerned about human rights abuses, sorry, too bad, the government will ignore your concern and veto your decision. End of story.

We call for BDS because the UK government engages in the arms trade with Israel despite its own stated recognition that Israel uses weapons imported from the UK in its oppression of Palestinians, and that Israel systematically violates international law in continuing to build settlements and maintain the Apartheid Wall. If UK law was enforced the result would be a a de facto ban on arms exports to Israel because it is known that Israel uses weapons for internal repression and to assert territorial claims over the occupied Palestinian territories.

Listen to John Hilary discussing the banning of local authority boycotts:


However, the UK government has failed to act on this and, true to form, continues its efforts to silence protest over its failure to hold Israel to account. In the face of this government inaction, ordinary citizens have been compelled take up campaigns focused on the UK-Israel arms trade, demanding simply that the UK government enforce its own policies and ban arms exports to Israel.

Local councils have passed resolutions aimed at this complicity in recent years, notably Swansea, Gwynedd and Leicester whose boycott and divestment resolutions were held up as lawful in a high court challenge this summer. It is exactly this type of action that the government is trying to prevent, and because this action at local council level is lawful, just, and effective, this policy shows how the government is using sneaky means to prevent local council actions from gathering momentum.

If the government enforced international law and compelled its companies to respect human rights, there would be no need for ordinary citizens to step in and take further action. Investment decisions should remain in the hands of pension holders either way, and when the government refuses to respect international law, pension holders must maintain the right to withhold support from those companies. 

Unfortunately, this attack on local democracy is part of a larger package of attacks on the trade union movement, charities, students, and all those advancing a progressive agenda. And when it comes to local councils, if the government is giving itself the power to intervene in the democratic process over the arms industry, just imagine the industries next in line shielded from public debate. There is much to be done, but the fightback has begun. We must stand together and defend against these attacks on democracy.

Take Action: Protect Local Democracy

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