Government crackdown in council divestment
The government’s controversial new pension regulations came into effect at the beginning of November, banning local authorities in England and Wales from divesting from the arms trade and companies complicit in Israel’s oppression of the Palestinian people.
The seed for this undemocratic policy was sown a year ago in an incendiary Conservative Party press release claiming that local council divestment campaigns are the product of “militant actions of left-wing councils, spurred on by trade unions and the Labour leadership, which threaten to poison community relations and harm Britain’s economic and international interests.”
What seemed like just inflammatory rhetoric soon translated into new regulations on local government pension scheme investments. The proposal said local authorities would not be able to disinvest pension funds from the defence industry or as part of ‘politically motivated’ boycotts. If they did, central government could ‘intervene’ and redirect their pension investments. In other words, the government could override pension scheme members’ decisions and decide their investments for them.
The government quietly released the proposal for a consultation that ended in February 2016. But the public mobilised, and over 23,000 individuals submitted responses, rejecting the government’s plans. Hundreds of trade union branches registered their protest, along with UNISON, which represents 4.6 million local government pension scheme members. Local councils in Newcastle and York passed resolutions opposing the policy.
Altogether, 98% of respondents rejected the government’s proposal. But that didn’t stop it from rolling the proposal into regulation only days after releasing the damning consultation results to the public. The whole episode shows the government’s utter contempt for public opinion, and even more so for the rights of the pension scheme members who can now be cut out of decision-making over their own money.
This new policy also shows how far the government will go to crush any dissent over its deadly promotion of companies who profit from war and destruction. Take the examples of Israel and Saudi Arabia, both receiving a consistent flow of weapons from UK-based arms companies. Arms exports to these countries are a clear violation of the UK government’s own export control criteria that prohibit selling arms to countries that will use them for breaches of international law. While there is no doubt that British-exported weapons have been used in military attacks on civilians by both these countries, resulting in thousands of deaths, the companies involved continue to get special treatment by the UK government.
In light of government failure to implement its own export controls, it’s not surprising individuals and local councils take action and withdraw financial support from the companies complicit in these war crimes. Just as it is reasonable for pension funds to be divested from fossil fuel companies, it is perfectly legitimate for pension scheme members and their local communities to divest from the arms trade.
Are these examples of ‘politically motivated boycotts’? Absolutely. So were campaigns for disinvestment from companies complicit in South African apartheid in the 1980s - campaigns motivated by internationalism, anti-racism and respect for freedom and human rights. Margaret Thatcher similarly cracked down on local council divestment action in the 1980s, calling them divisive, although it’s hard to think of anything more divisive than apartheid and war.
Thatcher’s crackdown ultimately failed and so will this one. Just a few weeks before the regulations came into effect, Jeremy Corbyn MP tabled a special form of Early Day Motion, calling on the new regulations to be annulled. It has already gained support from 85 MPs across parties, and there is still time for others to sign. But more fightback will be needed to protect our right to withdraw consent from companies profiting from militarism at home and abroad.
For more information, see waronwant.org/protectlocaldemocracy