In this brave new world, ‘predominant concern should be the pursuit of a financial return on investments’

Donald Macintyre reports on ministerial consultations, preparing new procurement guidelines to stop town halls operating “municipal foreign and defence policies” through “politically motivated boycott and divestment campaigns… against UK defence companies and against Israel”.

He points out that a 2007 survey of local authorities showed that they were investing £300m in BaE alone and cites a press release issued by Conservative Central Office about Leicester City Council, which is facing an application by local Jewish groups for judicial review in the High Court of their boycott of goods from West Bank settlements.

Planned amendments to the Local Government Pension Scheme Regulations 2009 are designed to “make clear to authorities that in formulating these policies their predominant concern should be the pursuit of a financial return on their investments… They should not pursue policies which run contrary to UK foreign policy.”

richard burdenBirmingham Northfield MP, Richard Burden, said he would challenge ministers on this “bluntly crass” and “potentially anti-democratic” policy when the Commons returns in January.

The requirements in the city’s Business Charter for Social Responsibility – currently being reviewed with a view to strengthening its ethical elements – include suppliers’ compliance with the Universal Declaration on Human Rights.

Mr Burden said that the wider issue was that it would prevent councils from pursuing positive goals, such as community cohesion, environmental sustainability and human rights, in line with the best practice of the progressive private sector.

“It’s called corporate social responsibility. The right ethical investment decisions in the long term are often also the right business decisions.”