A High Court judge has ruled that the Government was exceeding its power in trying to direct Local Government Pension Funds to ignore calls for BDS and abandon ethical investing. The Government, he said: “has acted for an unauthorised purpose and therefore unlawfully“.
Sajid Javid, the Secretary of State for Communities and Local Government, has a record of fierce partisanship in favour of Israel. As Culture Secretary he lobbied hard to punish the Tricycle Theatre for declining to accept Israeli Embassy funding. In his current post he attempted to misuse the review of Local Government pension regulations to prohibit funds from taking Israeli Human Rights abuses and other ethical considerations into account when deciding investment priorities. He sought to include
“In formulating and maintaining their policy on social,
environmental and corporate governance factors,
an administering authority…
• Should not pursue policies that are contrary to UK foreign
policy or UK defence policy.”
in the guidance.
The Palestine Solidarity Campaign crowdfunded a judicial review of this manifestly politically motivated and partisan restriction.
High Court judge Sir Ross Cranston heard the review. In his judgement, published on 22 June, he said:
Yet it is clear from the Secretary of State’s own evidence that the parts of the guidance the claimants challenge were not issued in the interests of the proper administration and management of the local government pension scheme from a pensions perspective, but are a reflection of broader political considerations, including a desire to advance UK foreign and defence policy, to protect UK defence industries and to ensure community cohesion.
This led him to conclude
But the flaw in the Secretary of State’s approach is that the guidance has singled out certain types of non-financial factors, concerned with foreign/defence and the other matters to which reference has been made, and stated that administering authorities cannot base investment decisions upon them. In doing this I cannot see how the Secretary of State has acted for a pensions’ purpose. Under the guidance, these factors cannot be taken into account even if there is no significant risk of causing financial detriment to the scheme and there is no good reason to think that scheme members would object. Yet the same decision would be permissible if the non-financial factors taken into account concerned other matters, for example, public health, the environment, or treatment of the workforce. In my judgment the Secretary of State has not justified the distinction drawn between these and other non-financial cases by reference to a pensions’ purpose. In issuing the challenged part of the guidance he has acted for an unauthorised purpose and therefore unlawfully.
Ben Jamal, Director of PSC said: ”Our recent YouGov polling shows 43% of the public think BDS is reasonable. We couldn’t be happier that this right has been upheld by the Court in the month the illegal occupation of Palestine turns fifty years old. PSC will take forward its campaign for justice for the Palestinian people with renewed vigour.”
Jamie Potter, Partner in the Public Law and Human Rights team at Bindmans LLP said: “This outcome is a reminder to the Government that it cannot improperly interfere in the exercise of freedom of conscience and protest in order to pursue its own agenda.”
This goes beyond a welcome victory for BDS campaigners. All supporters of the right to free expression and the right to oppose Government policies will welcome this push back against executive over-reach.