The Bill seeks to remove the possibility for public bodies, including councils, to campaign against, boycott, seek divestment from, or sanction a particular territory internationally, unless endorsed by the Government’s own foreign policy.
About the LGA
The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross party membership organisation, representing councils from England and Wales.
Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.
This briefing will focus on currently tabled amendments to the bill, on which the LGA has a view. You can find a full account of the LGA’s position on the legislation as introduced in our submission to the bill committee and our briefing on the second reading of the bill .
- Amendment 2: The LGA would welcome the addition of this amendment, we believe this appropriately addresses our concerns around the bill’s potential to stifle proper and appropriate discussion in pension committee meetings.
- Amendment 3: The LGA would welcome the addition of this amendment, in lieu of amendment 2, as we believe this goes some way to address our concerns around the bill’s potential to stifle proper and appropriate discussion in pension committee meetings.
- Amendment 4: The LGA has some concerns about the practical workability of this amendment. Although some LGPS funds do consult directly with members, via various methods, on investment themes – it is not yet widespread practice and could be challenging to resource and manage if the amendment resulted in significant pressure on funds to make use of this element of the legislation.
- Amendment 16: The LGA welcomes this amendment as it would greatly reduce the restrictions the bill places on local authorities.
Amendments 2, 3 and 16
Amendment 2 - Page 3, line 13, leave out Clause 4
Amendment 3 - Clause 4, page 3, line 18, leave out paragraph (b)—“(b) that the person would intend to act in such a way were it lawful to do so.”
- Member's explanatory statement: This amendment would remove the prohibition on a person publishing a statement indicating that they would have acted in a way prohibited by clause 1 if it were legal to do so.
Clause 4, page 3, line 24, at end insert—“(4) This section does not apply to— (a) a local authority, (b) an elected mayor of a local authority (c) a mayor for the area of a combined authority, (d) the Mayor of London, (e) the London Assembly (f) the Scottish Parliament, or (g) Senedd Cymru.”
- Member's explanatory statement: This amendment would exempt elected bodies from the prohibition on making public statements indicating that they intend to, or would intend to if it were lawful, act in a way that would contravene section 1.
LGA view on Clause 4
- The LGA would emphatically welcome the addition of amendment 2, but also feel that amendment 3 would go some way in addressing our concerns (in lieu of amendment 2) around clause 4 and the bill’s potential to stifle proper and appropriate discussion in pension committee meetings.
- The LGA would also welcome amendment 16 as it would greatly reduce the restrictions the bill places on local authorities and, similarly to amendment 2, it would address our concerns that the bill would stifle proper and appropriate discission in pension committee meetings.
- Our concern is that if a councillor says that they, as an individual, would support a boycott, then under the unamended legislation, publishing this in minutes could constitute an offence. Where the individual councillor’s view is not supported by the committee collectively, then it shouldn’t be a breach of the law for them to express their views.
- And that this could stifle appropriate and proper discussion at committee meetings about concerns relating to relevant investments’ risk factors. Geopolitical and territorial factors are relevant to the risk of making, or retaining, certain investments.
Clause 12, page 8, line 4, at end insert “(1A) But section 1 does not apply in relation to a fund investment decision made by such a manager if the decision has been approved by a majority of those voting in a ballot of the members of the fund; and section 4 does not apply to any statement—(a) made for the purpose of preparing for or explaining the purpose of such a ballot; (b) concerning a decision which has been approved by such a ballot.”
- Member's explanatory statement: This amendment would allow a local government pension fund to act in a way prohibited by clause 1 if the decision to do so is approved by a majority of scheme members and would prevent statements about or following such a ballot being prohibited by clause 4.
LGA view on Clause 12
- The LGA has some concerns about the practical workability of this amendment. The views of scheme members are important when pension committees are considering investment decisions, however they are balanced with other factors that are relevant, according to Law Commission advice on the fiduciary duty. Although some LGPS funds do consult directly with members, via various methods, on responsible investment themes – formal balloting of members would be challenging to resource and manage if the amendment resulted in significant pressure on funds to make use of this element of the legislation.
- Day to day decisions on implementation of the LGPS fund’s investment strategy are frequently made by that fund’s pool or by their asset/investment managers. It is standard practice for asset managers to regularly review the companies their funds are invested in, and to respond to a diverse range of dynamic risk factors when making decisions around investments.