Economic Activity of Public Bodies (Overseas Matters) Bill (First sitting)

Kim Leadbeater Excerpts

Committee stage
Tuesday 5th September 2023 Public Bill Committees

[Brendan Clarke-Smith (Bassetlaw) (Con)]

I have also been on a trip funded by Conservative Friends of Israel, and I am also a friend of James Gurd.

[Kim Leadbeater (Batley and Spen) (Lab)]

I have been on a trip funded by Caabu, who are not giving evidence this morning, but I believe they are later on.

[The Chair]

Are there any more? I do not think there are any more Members!

We will first hear oral evidence from Jo Donnelly, who is the head of pensions at the Local Government Association, and Jon Richards, who is vice-chair of the Local Government Pension Scheme Advisory Board. Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill, and we must stick to the timings in the programme order the Committee has agreed. For this panel, we have until 9.55 am. To begin with, could the witnesses please introduce themselves for the record?

Jo Donnelly: I am Jo Donnelly, head of pensions at the Local Government Association.

Jon Richards: I am Jon Richards, vice-chair of the Local Government Pension Scheme Advisory Board. In my day job, I am assistant general secretary for Unison, the public services union, although I am here specifically in my role as vice-chair.

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[The Chair]

I think this will be the last question.

[Kim Leadbeater]

Q Thank you, Chair, and thank you to the witnesses for joining us this morning. You have said that you are there to deliver on behalf of the members of your schemes. Many of my constituents will have pension funds and some may well have a view on how those funds are invested, which is surely right. How will this legislation affect the ability of fund managers to respond to those concerns of members?

Jo Donnelly: It depends on the terminology. I would interpret “fund managers” as the asset managers: the investment professionals who manage the money in the pension scheme. They are tasked and given a mandate by the administering authority, by the pensions committee, which makes the decision as a collective. There is no individual decision making in the LGPS; it is all done as a collective by committee, which is one reason why there is some confusion for us about who the decision maker is, because that is never an individual in the LGPS.

In terms of fund managers as investment managers, they will continue to operate in line with the mandate that they are given by their client, which is the local authority or, in some cases, the investment pool, if it is one of the eight LGPS pools that exist in England and Wales. As long as those mandates do not breach the law, they will continue to operate as they do now. They make day-to-day commercial decisions about investments, taking into account all the relevant risk factors. If asset managers feel that there needs to be a change in an investment profile because of risk factors, they will make those decisions, normally without having to check that with the client—the authority that has invested the money.

Jon Richards: Can I just add that we have a series of oversight bodies that take those decisions? Obviously there is a pension fund committee in the council, which has the administerial authority. We also have separate pension boards which have half representatives of employers and half of employees, which again matches what we have at national level, where our board is six councillors and six member representatives. The chair is a Conservative councillor, the chair of the employers’ side is a Conservative councillor and I am a trade union official.

We have never had to vote at the national level. We have voting powers, but we have never used them because we have never needed to: we understand that we have a fiduciary duty. That is where we agree with Conservative councillors. We disagree very heavily on politics and all sorts of things, but when it comes to the committee we are pretty clear about what it is we need to do, and also about the need to improve governance to ensure that members’ representatives and members’ views are taken into account when people make those investment decisions.

[Kim Leadbeater]

Q You do not think this legislation will have a negative impact on that process?

Jon Richards: I do not think so. I think there are wider problems with this legislation. There are ways of dealing with governance and how members can feed in and put their views forward at local and national level. The Bill has a series of other difficulties that will cause us significant administrative, governance and legal problems.

Jo Donnelly: I think there are some concerns about the exceptions and how they work. In the schedule, there are exceptions to permit considerations around environmental, social and governance factors, which are obviously now standard practice to consider when looking at investments. But there are some concerns about the wording of those provisions, whether they will allow things to continue to operate, and whether committees will be able to consider specific concerns brought by scheme members.

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[Kim Leadbeater]

Q Thank you for joining us this morning. Like all my colleagues, I abhor antisemitism, and I agree that if further measures are needed to eradicate it from public life, of course we will support them. However, is there not a risk that because this Bill very publicly singles out the state of Israel as a special case, it may provoke greater antisemitism, which is the very thing that none of us want to see?

Russell Langer: I have heard this argument and it is really important that it gets a clear answer, which is that antisemitism is not a response to Government legislation. It is not a criticism of the Israeli Government; antisemitism is the hatred of Jews. And I am really cautious about any argument that this piece of legislation would increase antisemitism. I think that it is an argument that we really need to steer clear of.

Daniel Sugarman: I would add that, from our point of view, the reason why it is right that Israel is singled out here is because, as far as I am aware, Israel is the only country that is regularly targeted for such boycotts via public bodies. No other country is targeted in such a manner. Therefore, it seems correct that there is some acknowledgement of that and some way to ensure that it does not happen.

[Kim Leadbeater]

Q And you do not have any concerns that this Bill could have a negative impact on communities within the UK?

Russell Langer: I think it will have a positive impact on communities here in the UK. Unfortunately, what we see here in the UK—it happens with other foreign issues, but it happens specifically with the Israeli-Palestinian conflict—is that we see a foreign conflict affecting intercommunity relations here in the UK. Worst of all, we then see public bodies—it is a minority, but some public bodies—seeking to then get involved in that debate and make those tensions worse, when I think they should be getting involved to improve the situation. I completely agree with you, but I think I come to a different point.

Daniel Sugarman: It will certainly make things better for Jewish communities—particularly small Jewish communities—who have been in positions where they sometimes feel that, unless they vocally criticise Israel, as Jews, they will not get a hearing. I admit, I do not have a huge amount of sympathy for people who might feel that they no longer have the means to make such Jewish communities feel uncomfortable.

[Steve McCabe]

Q Good morning. When I first heard about the Government’s intentions to legislate in this area, I understood it to be legislation to prevent public bodies from boycotting the state of Israel, which I welcomed. I just wonder whether you think that the Government have made life easier or more difficult for themselves by extending the range and scope of the Bill, or whether it would have been better to have concentrated on preventing the boycott of the state of Israel.

Daniel Sugarman: That is an excellent point, but I think that, had the Government focused specifically on Israel, and not on anything else, we would have seen some of the same people who are raising questions in general—well-meaning questions as to why Israel is singled out specifically in the Bill—and I think that the questions as to why only Israel was being focused on would have been 1,000 times louder. I think it makes sense that the Government have widened the scope for this, while singling out Israel within the wider Bill.

Russell Langer: I would add that part of our reasoning to believe that public bodies should not be boycotting Israel is that it contravenes UK Government policy, and that it is a foreign-policy issue being taken up by public bodies. Therefore, I can understand the wider scope to tie that in to that national picture of public bodies not taking foreign-policy decisions contrary to national Government.

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[Dr Luke Evans (Bosworth) (Con)]

Q Councillors Deering and Jamieson, this question is to both of you. Councillor Deering, you said the point around pensions should not be political. In your experience as councillors, how much of an increase have you seen in talk about, for example, previous slavery, the environmental side, Israel and Palestine, China and Russia? How much more of this debate is happening at a local council level, as opposed to 10 years ago? Was this debate happening then? Is it becoming more prevalent?

Councillor Deering: Well, I do not quite go back 10 years in local government, so I cannot quite answer for that period. I became a county councillor in 2017, I think, but I have been involved in the finance and performance side more or less ever since day one. I would say that the answer to your question is: a bit. Not only is there slightly more of this discussion because of general issues and political issues, but also in part because all councils are under financial pressure and every now and again there is a view expressed by someone—from wherever they might be on the political spectrum—that, “There seems to be an awful lot of money in the pension fund, and can’t that somehow be used?” Obviously that is inappropriate. In our council, everybody understands that, but it is a frustration that is expressed from time to time. Coming back to your question, yes, there is a little bit more of what you asked about, but maybe that is because there are an increasing number of events in the world that might lead to the thought being ventilated.

Councillor Jamieson: The modern world—with the increase in social media, the ability for electronic petitions and so forth—has meant that councils are subject to more petitioning and more demand from groups of the public. It is easier to put these things on the agenda than it was in the past, so I think it is inevitable that we are seeing more of whatever it is that we are talking about compared with 10 years ago; in fact, I can go back 14 years, so compared with 14 years ago.

[Kim Leadbeater]

Q I will pick up on a point that has kind of been covered already. Do you have anything further to add on the issue of freedom of speech, or any further concerns that this Bill will undermine local democracy by restricting what councils and councillors can say and do? You are very fortunate in your area if you have not been impacted by some of the more contentious issues that the Bill covers, but I have some concerns around freedom of speech for local representatives and undermining local government autonomy. Is there anything else you want to add?

Councillor Deering: Personally, I am a very big believer in freedom of speech, and just freedom. If I might make a huge point, it is one of the things that this country is pretty good at, actually. I am very strongly in favour of it and would not want to see it impinged, but we all need to find a way to work together and achieve objectives. I repeat that our institution is not particularly vexed about the issue that underlies your question; we can see it, but I do not know that we are vexed by it.

Councillor Jamieson: If I can come back to this—I am in danger of repeating myself—I do think it is important that there are some tweaks to the legislation. One is that writing the minutes of a meeting that reflect a view expressed in the meeting should not be a reason to be referred to the Pensions Regulator or for judicial review. Also, if the reference to a decision having been “influenced” was changed to “substantially influenced”, that would make life a lot easier.

I also have a big concern with judicial reviews. My biggest area of experience with judicial reviews is in the planning system, where they can be hugely expensive and time-consuming. I really do not like the fact that councils will be subject to judicial reviews, which will make vexatious JRs and so forth much easier. We are covered by the Pensions Regulator, and if the legislation were changed to say that it is the Pensions Regulator that makes the decision, and the Pensions Regulator could then be judicially reviewed if somebody felt it had not made its decision correctly, that would reduce the risk of vexatious JRs. That should also be linked to who can claim that they have been impacted. At the moment, pretty much anybody in the UK is in a household where there is a ratepayer; does that mean that anybody can mount a challenge just on the basis that they are potentially influenced or potentially a taxpayer?

The definition of who can mount a JR should be tightened, then, but ideally we should remove the ability to JR councils for the decisions. We should be monitored by the regulator and complaints should be made to the regulator, which should make that decision. If the regulator makes a decision and a member of the public is not happy with that decision, they should JR the regulator, not the council. I think that would make people feel a lot more comfortable about expressing their views and not having a vexatious JR or worrying about whether a minute in a meeting might contravene the rules or whatever.

[The Chair]

The regulator might consider itself to be an exception to that rule.

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[Chris Stephens]

Q Hannah, I think you were present when I put this question earlier. You mentioned the Union of Jewish Students. As I understand it, your organisation and the Union of Jewish Students are on record as saying that this Bill restricts freedom of expression rather than directly addressing the issue of antisemitism, and you are both on record as saying that it does not address the very epidemic—that is, the evil of rising antisemitism—that it claims it wants to tackle. Could you expand on that further, please?

Hannah Weisfeld: I am not sure whether that is a direct quote—I am not sure whether those were our words or the words of the Union of Jewish Students—but our sense is that the Bill will severely limit freedom of speech, as has been mentioned a lot this morning. Clause 4 already gags the ability of local democracies to express their opinions. That is very troubling in a democratic society—the idea that we legislate against free speech. As Jews, we don’t do well in societies that clamp down on free speech, and I think that there is a really big debate in the community about that. There is a very big debate inside Israel about that, and inside Jewish communities in America, where there has been similar legislation.

I think it is worth drawing your attention to anti-boycott legislation that the Israeli Government passed in the Knesset in 2011. Some very mainstream Israeli political figures—people you will know—came out very strongly against it, such as Ruvi Rivlin, who was the last President of Israel, and Tzipi Livni and Dan Meridor. They were all very clear that clamping down on boycotts and doing so in a legislative way does not help Israel and does not solve questions of antisemitism. Dan Meridor, who was the Likud Deputy Prime Minister, said:

“This law helps in delegitimising Israel, and makes Israel look like a country that prohibits free speech. It is useless. Those who boycott are a small group of people. I oppose boycotts, but they should not be illegal.”

That is the kind of sentiment that we echo.

Going back to the Minister’s question about why we do not support BDS, it is possible to say that we do not support something but that we protect the rights of other people to have that opinion. That is a very important principle in a democratic country, and it is one that we—as an organisation that is committed to Israel, committed to Jewish life in Britain and committed to democracy—want to see being upheld, which is why we have an issue with this legislation.

[Kim Leadbeater]

Q You have talked a little bit about your concern about community relations in the UK as a result of this Bill; I think that that has been heard. What impact will the Bill have on your organisation’s work in Israel and Palestine?

Hannah Weisfeld: I do not know whether people have seen it, but a letter was sent by 14 human rights and civil society organisations in Israel that went both to the Opposition and to the Government. They were very clear—I think this is very important—that the current political climate in Israel, which people may or may not be following closely, is extremely dangerous. It is very, very problematic. There are hundreds of thousands of people protesting on a weekly basis. I read yesterday that the police estimate is that there have been 7 million attendees at protests for 35 weeks—not 7 million individuals, but 7 million appearances at protests—and there are very severe clampdowns on free speech.

In the last year, civil society organisations in Israel have already faced two attempts, I think, to severely curtail their funding and to shut down dissent against the Israeli Government. What our partners in Israel wrote to the Government here and to the Opposition is worth quoting from: “We know all too well the consequences of shutting down dissent and disagreement. Today in Israel, there is significant civil unrest involving weekly protests of hundreds of thousands of people, reservists refusing to show up for military service and companies divesting their funds out of Israel. This legislation is giving in to Israel’s far-right Government’s desire to shut down debate, protest and dissent.” Certainly on the ground in Israel, civil society organisations involved in protests see this legislation as a gift to the Benjamin Netanyahu Government.

I should add that there is huge concern in the Jewish community here about the ascendancy of Benjamin Netanyahu’s Government and the far right. Today, literally about two minutes ago, the Government Minister for Diaspora Affairs was just uninvited from JW3, the main Jewish community centre in London, because of his opinions and because of his far-right position. He was due to have a tour there at, I think, 5 or 6 o’clock this afternoon, but about five minutes ago he was uninvited. That is the depth of feeling in this community: 79% of people who were polled in July said that they disapprove of Israeli Prime Minister Benjamin Netanyahu.

We have a community here and partners on the ground in Israel who are deeply worried about the direction of travel. What this Bill will do is say, “It is business as usual—not only business as usual, but we will give you a gift, which is forever to put Israel and the occupied territories beyond public scrutiny.” By keeping the clause that specifically lists Israel, the OPTs and the Golan Heights, we are saying that despite the fact that there are now Israelis divesting and dissolving companies and moving them outside Israel, there can never be any circumstances in which it is OK for public bodies in Britain to do that. I think that that is very, very troubling, given that I think everybody here is committed to Israel’s existence as a democratic and Jewish state.

[The Chair]

I am afraid that that brings us to the end of the allotted time for the Committee to ask questions. On behalf of the Committee, may I thank the witness for taking a position that does not necessarily conform to some of the other views that we have heard but that makes it absolutely clear what you stand for? We are very grateful for that.

Hannah Weisfeld: Thank you for inviting me.

Examination of witness

         James Gurd gave evidence.

Economic Activity of Public Bodies (Overseas Matters) Bill (Second sitting)

Kim Leadbeater Excerpts

Committee stage
Tuesday 5th September 2023 Public Bill Committees

[Chris Stephens]

Thank you.

[Kim Leadbeater (Batley and Spen) (Lab)]

Q Clause 4 prevents public bodies, and anybody representing them, from saying that they would support a boycott if it was legal to do so. Do you agree that, on the face of it, that feels like a limit on freedom of speech? Is it compatible with free speech for it to be legal to say that you are against something—in this case, any kind of boycott—but illegal to say that you are in favour of it?

Dr Mendoza: I would go back to the question that Dr Harris posed. It is really a question of vires; it is about what a public body collectively should or should not be doing. A public body should not be making decisions in contrast to UK foreign policy on something like a boycott, basically. Individual members—individual fellows or whatever it might be—have every ability and right, still, to say what they like on the subject, but they cannot speak on behalf of their institution or their authority to do that. However, when it comes to opposing a boycott, there are rights and abilities there. That is something that public bodies are not allowed to do, so that would be in keeping with that.

I think there is a clear distinction between the two things. One is something that the body is not competent, or does not have the jurisdiction, to legally carry out; on that basis, what is the purpose of speaking on it? The other—opposing a boycott—is something it can do, because that is the norm and the effective position, in law, for that authority. I therefore see no problem, or indeed contradiction between the two things.

Dr Harris: Again, as I have said, it certainly conflicts with the spirit of free speech, and I suspect also with the law regarding freedom of expression. As I said, the European Court of Human Rights, at least in one case—that of Baldassi in France, which I hope the GLD will have taken on board—certainly does say that a boycott is a protected act of protest. The very interesting thing about that case is that the court said that justification for the restriction of political speech is key; there needs to be a tight justification for it. That is entirely in keeping with the common law in this country, and the political philosophy of this country, that political speech, especially, must merit the utmost protection in law.

I think that there is a point on which the Government are on safer ground. Let us say that they want to avoid the embarrassment of legal challenge—they might reasonably wish to, and I am sure that they do. I would certainly say that the community cohesion point is a stronger justification, and the European court makes that distinction very clearly too. As I have said, BDS, especially in the light of recent events, clearly goes to community cohesion, but it is entirely foreseeable that there may be future foreign policy controversies where that is not an issue and the Bill will still apply to them. That raises the question of proportionality: because it will cover even cases where community cohesion is not in play, is there overreach?

Let me quickly say on vires, because I think it is quite important, that it is entirely right for the law and Parliament to say to subordinate bodies, “This is the extent of your power; you serve the public interest in this way, to this extent, and you use your resources for this purpose.” I think it is entirely right for Parliament to say, as it already does, “If you’re a local government authority, foreign policy isn’t really what you should be spending your money on.” I think it is right to say that to other bodies. However, I think it is extremely provocative for Parliament to say that to universities. This Government and Parliament have done excellent work protecting academic freedom, but there is a second limb to academic freedom, which is the autonomy of academic institutions, and I think it is extremely questionable to challenge that.

[Kim Leadbeater]

Q Can I follow up on the point about community cohesion? Do you think that the Bill will have a positive or negative impact on community cohesion?

Dr Harris: It is a good question. I am not entirely sure. It is obvious that in some areas, where perhaps there is a certain degree of activism in the local authority, it could lead to some members of the community—I mean Jewish members of the community specifically—feeling like there is less pressure, and feeling less victimised and targeted. But as I say, there is going to be a significant number of cases where this justification will not apply because there is not an issue of community cohesion. Take the Ethiopian and Eritrean war: how likely is that to raise questions in this country of community cohesion?

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[Dr Evans]

I have no further questions.

[Kim Leadbeater]

Q Almost reluctantly, I return to clause 4. I have been thinking about the practical repercussions of the Bill, and I have to say that my feeling this afternoon is that this is going to be pretty messy. If we are asking elected officials in council chambers up and down the country to say, “Now I am speaking in a personal capacity, and now I am speaking in my capacity as an elected official,” it feels like that would be very messy. Surely, as advocates of freedom of speech—as a number of members of the panel have said—that can only have a worrying effect in shutting down debate and discussion. That can only have an undemocratic outcome.

Professor Tettenborn: That is a very interesting point, if I may say so. There might be a simple way around it: we could have an extra subsection in clause 4 that said, “Nothing in this Act affects the right of any member of a public authority to speak in a private capacity.” Just saying it out loud provides a safe harbour; it means that people do not have to go to a lawyer to look up a law, or at least they do not have to go to so many lawyers. I think that might be helpful.

Professor Tomkins: I share everybody’s concern that we must take freedom of speech very seriously—I think that that is a very important set of concerns to raise—but there are two things to say.

First, what Professor Tettenborn has just described is already the state of the law. The way in which we approach rights under the Human Rights Act is that rights are stated generally, and any exceptions to those rights must be narrowly tailored and stated specifically. If there is doubt or ambiguity, it falls on the side of the right, not on the side of the exception. That is already, in broad terms, the legal position through the United Kingdom—as it should be, in my view. Adding extra words to clause 4 to deliver that effect will not have any effect, because it is already the legal position.

I remind the Committee that clause 4 is very narrow in scope: all it says is that somebody who is subject to section 1 may not say that they would have made a procurement decision or an investment decision different from the procurement decision or investment decision that they have made, by force of this legislation. It seems to me that all the members of this panel are of the view that that is perfectly compatible with article 10 of the ECHR, for all the reasons that we have rehearsed; and if it is compatible with article 10 of the ECHR, it is also compatible, I think, with our domestic standards with regard to free speech. For all those reasons, and notwithstanding the fact that I take free speech incredibly seriously, I genuinely do not think that there is a free speech issue with regard to this Bill.

[Wayne David]

Q Partly because our two professors are from Wales and Scotland, I want to ask about devolution. Most of would agree, I think, that foreign policy is exclusively a reserved matter, but we are not just talking about foreign policy now; we are talking about procurement responsibilities and public service pension schemes, the responsibility for which is, to a large extent, in different ways, devolved to the devolved Governments. I am mindful of a statement in the House of Commons Library brief that the Bill as it stands will modify

“the executive competence of devolved ministers”,

and because of that the devolved institutions will need to pass a legislative consent motion. That might be politically contentious; therefore, the Act might not automatically apply to the three parts of the United Kingdom we are talking about. Also, in Northern Ireland, public services pension schemes are exclusively in the hands of the Northern Ireland Assembly, which is not currently meeting. How will it agree a legislative competence order? Presumably, unless the Secretary of State takes powers that are not prescribed in the Bill, this legislation will not apply to Northern Ireland. Would you care to comment on that?

Professor Tomkins: With your permission, I will jump in on that. First, I have to say that the question of legislative consent has got a long way out of control. By that I mean this: absolutely, the United Kingdom Parliament should seek and obtain the legislative consent of the devolved Administrations and devolved Parliaments if the United Kingdom is seeking to legislate on matters which it has chosen to devolve to democratically elected legislatures away from Westminster, but that is not what is happening here—

Economic Activity of Public Bodies (Overseas Matters) Bill (Fourth sitting)

Kim Leadbeater Excerpts

Committee stage
Tuesday 12th September 2023 Public Bill Committees

[Alex Norris]

I beg to move amendment 4, in clause 3, page 2, line 17, leave out subsections (2) and (3).

This amendment would remove provisions allowing Ministers to amend the Schedule, via regulations, to add a description of decision or consideration, or amend or remove considerations added under previous regulations.

Clause 3 makes a number of exceptions, set out in the schedule, to the proposed ban on decisions made by public bodies in respect of foreign states—that is, it allows for certain conduct to be in scope for ethical decision making, such as environmental concerns. We support the principle of excepting certain powers from the Bill, and Members will not be surprised to hear that we are pleased to see labour rights there. However, the clause then bakes in a rather unacceptable and significant power grab by the Secretary of State over the ethical procurement decisions that a public body may wish to make.

Looking around the room, I see some Members who have been here longer than me and some who have been here for a bit less time, but I bet everyone will agree that one thing we were not told before we came here was that while we thought we would be talking about great matters of state, we would end up talking about Henry VIII regulations. Whatever happens, all roads lead to this bit of the Bill. I am continuing that unbroken streak, though perhaps not at length, as this argument is made frequently.

Clause 3(2) will provide the Secretary of State or Minister for the Cabinet Office with the power to amend this vital schedule in which the exceptions are laid out. That is an eccentric and totally unacceptable and unnecessary provision. This Parliament is rightly spending lots of time on this legislation. We have taken oral and written evidence from witnesses and will have multiple debates in the Chamber. We have convened this Bill Committee and will go through the Bill line by line, and then this process will be repeated in the other place. That is so we get the provisions right.

What we are being asked to do in the light of clause 3 and the schedule is to divine whether we think the range of exceptions is right. Is it broad enough? Is it too broad? Should we add any more? Should we take any out? That is the purpose of Parliament and parliamentary scrutiny. Yet we are being asked to put a provision in the Bill that the Secretary of State can just change that anyway via secondary means. That creates an unacceptable imbalance between the Executive and the legislature.

The problem is best understood in contrast to subsection (5) because that is a mirroring provision. It allows the Secretary of State to add or remove countries from the list of places that public bodies may boycott. We have not sought to amend that, because we know from recent painful experience that foreign affairs have a habit of moving on, and there must be an opportunity for the Government of the day to make changes swiftly. That is entirely reasonable in the case of foreign affairs and entirely unreasonable in the case of exempted activities, because they will not change quickly. Environmental and labour concerns are anchor issues that will dominate debates long after all of us are gone. The Secretary of State and the Government more generally do not need the power to vary that quickly.

If we do not accept the amendment and we accept what is in the Bill, what all colleagues—Opposition and, frankly, Government Back Benchers too—are being told is, “Do all the due process, but don’t worry; we will just change it later if we fancy it”. That is not good enough in a parliamentary democracy, and we should delete the provision today.

[Kim Leadbeater (Batley and Spen) (Lab)]

I will make just a short contribution, if I may. I associate myself with the comments of our shadow Minister. The matters covered by the Bill relate to issues of fundamental importance: the interpretation of UK foreign policy and the ability of public bodies to respond. We live in uncertain times, and the UK’s position as an influential country on the world’s stage will understandably need to change in response to events in many areas of instability. In those circumstances, it would be fundamentally wrong for Ministers to reserve to themselves the power to amend the schedule in the Bill without returning to Parliament and giving MPs and, indeed, interested parties the opportunity to scrutinise and, where necessary, object to it. That is why I support amendment 4.

[Steve McCabe]

I will speak briefly about subsection (7), and in particular about amendments 5 and 6, tabled by my colleagues. As I understand it—

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[Alex Norris]

I agree. After hearing that testimony, I reflected on one of the things that I love the most about my country—I think about this quite a lot—which is that we stand up for people who need it, whether by providing shelter or by never walking on the other side of the road. I see things through that prism. I think it is a really fundamental British value, and I am concerned that we will lose some of that. Of course, significant matters of foreign policy are the reserve of the Government of the day, but the issue should not just be left to Government Ministers. The outpouring of support for Ukraine, both in my city and across the country, showed that people take that seriously and want to have a role and a say—they want to be part of that process. That is part of building common cause, but I fear that this goes too far and will squeeze some of that out.

Our amendment 2 makes our approach to the matter very clear. If a public body acts only against a particular state—for instance, the world’s only Jewish state—while not applying the same approach to human rights abuses everywhere, such actions would be illegal. Our amendment would not just ensure that there are consistent decisions and that communities are not singled out; it would also strengthen our country’s commitment to stand against human rights abuses all over the world.

Our country has always defended the fundamental, inalienable human rights of all people. Procurement and investment decisions are part of that, and we should not shirk that role when it is the right thing to do. The amendment would ensure that public bodies could still play their part and that the contemptible actions of those who target one state while looking the other way when abuses are committed elsewhere are finally prohibited.

As I said on Second Reading, our amendment could be technically deficient—I am never sure whether we are supposed to admit that in Parliament, but it is clear anyway. If it is technically deficient—after all, I drafted it, and am perfectly willing to say that it is the work of a human being—we are more than willing to work with the Government to find something that works in both principle and substance. I hope to hear from the Minister that there is willingness to meet us a little bit on this, so that we can tackle the problem that we are all trying to address.

[Kim Leadbeater]

I rise to speak briefly but strongly in favour of amendment 2. The UK should be a beacon for human rights, not just here at home but in our foreign policy and our relations with other states. That can be done only on the basis of a consistent application of the principles we seek to uphold. It is not hard to do that when human rights abuses are committed by countries we are in conflict with. However, we must be ready to apply the same standards to countries we regard as allies and friends. That is not always easy, but if we fail to do so, we open ourselves up to accusations of double standards and hypocrisy.

[Felicity Buchan]

Amendment 2 would exempt decisions from the ban that have been made in accordance with a statement of policy relating to human rights, produced by a public authority. The Secretary of State would be required to produce guidance on the content of any such statement, to which public authorities would be required to have regard.

Seventy-five years on from the signing of the universal declaration of human rights, the UK remains steadfastly committed to an open international order, a world where democracy and freedoms grow and where autocracy is challenged. We put open societies and the protection of human rights around the world at the heart of what we do. That includes our membership of the Human Rights Council, robust action to hold Russia to account over its actions in Ukraine and at home, calling out China in Xinjiang, leading the call for the special session on the human rights implications of the conflict in Sudan, and our global human rights sanctions regime.

We continue to work with our partners, civil society and human rights defenders to encourage all states to defend democracy and freedom and to hold those who violate human rights to account. Our annual human rights and democracy reports are an important part of that work. This Government, Foreign, Commonwealth and Development Office Ministers and officials continue to defend individual rights and freedoms, including through regularly raising concerns with other Governments. Our resolve to ensure that everyone can enjoy their rights is unwavering.

The international rules-based system is critical to protecting and realising the human rights and freedoms of people all over the world. We work through the multilateral system to encourage all states to uphold their international human rights obligations and to hold those who violate human rights to account. We are all in agreement that human rights abuses have no place in public supply chains.

I am concerned, however, that this amendment would give public authorities too much discretion to apply blanket boycotts. I also believe that the amendment is unnecessary because of the work that the Government are already doing in the Procurement Bill, which I will address in more detail.

The Procurement Bill already contains a robust regime for the exclusion of suppliers that are unfit to hold public contracts. That Bill sets out a wide range of exclusion grounds that target the most serious risks to public procurement, including modern slavery and human trafficking. The Cabinet Office has strengthened the way in which these terms are defined, so that suppliers may be excluded where there is sufficient evidence that they are responsible for abuses anywhere in the world, whether or not they have been convicted of an offence.

We have mirrored in this Bill the exclusion grounds in the Procurement Bill that pose the most significant risk to public procurement as exceptions to the ban, including for modern slavery and human trafficking. This means that public authorities will be allowed to make a territorial consideration that is influenced by moral or political disapproval of foreign state conduct in so far as it relates to one of the considerations listed in the schedule.

Moreover, there is guidance to help contracting authorities to address human rights risks, and there is well-established practice throughout the procurement process. That detailed and thorough guidance includes sections on managing risks from new procurements and assessing existing contracts, taking action when victims of modern slavery or human rights abuses are identified, and supply chain mapping, and it includes useful tools and training.

For the reasons that I have set out, this amendment is unnecessary, but I am also concerned that it would give authorities too broad a discretion to apply blanket boycotts. The amendment would allow authorities to exclude suppliers from entire nations without proper consideration of whether a supplier itself had had any involvement in the abuse. To exclude suppliers based solely on where they are located conflicts with the open principles of our procurement regime and would in some cases be contrary to the UK’s international obligations, such as non-discrimination requirements set out in the World Trade Organisation agreement on Government procurement.

As I have previously stated, foreign policy is a matter for the UK Government and not an issue for public bodies. It is not appropriate for public bodies to be producing their own policies on human rights in relation to other nations. This amendment would undermine the intentions of the Bill, leaving public authorities distracted by questions and debate about their human rights statements and the foreign policy that lies behind that. Many public authorities with no interest or expertise in such debates would come under pressure to produce statements or to explain why they did not have one. The discretion for public authorities, even acting within Government guidance, would mean a multitude and divergence of foreign policies across our public institutions and a confusing picture on the international stage of what the elected Government’s foreign policy was. My concern is that, were this amendment to be agreed to, every local authority and public body would feel the need to produce such a statement even though they felt that they had no expertise in human rights. I am concerned that it would increase the level of dissension and community friction rather than in any way lessening it.

I just want to clarify that nothing in this Bill affects private individuals and private companies and their ability, clearly, to boycott or divest.

--- Later in debate ---

The simple answer—to get consensus on the Bill and to get those of us who agree with the primary objective, which is to prevent the way in which Israel is being singled out and subjected to this pernicious boycott campaign—is to remove clause 3(7) altogether. I ask the Minister seriously to think carefully about the benefits of doing that, versus the potential disbenefits of leaving it in the Bill when it may well not achieve the objectives that I absolutely accept are her genuine intention.

[Kim Leadbeater]

Regrettably, no Palestinian voices were called to give oral evidence to the Committee—I wish they had been—but a number of respected and representative organisations have submitted written evidence. If we take notice of only one objection that they raised, although that would be a mistake because they raised a number of really valuable points, it should be this: the Bill should not treat Israel, the Occupied Palestinian Territories and the occupied Golan Heights on an equal basis. The exclusion raises serious questions about the UK’s commitment to a just two-state solution and its alignment with established international law principles governing the status of the territories, which—as noted in international law, norms and consensus—are illegally occupied territories. We should take note of such serious concerns, which is why I support amendment 6.

Ordered, That the debate be now adjourned.—(Jacob Young.)

Economic Activity of Public Bodies (Overseas Matters) Bill (Sixth sitting)

Kim Leadbeater Excerpts

Committee stage
Thursday 14th September 2023 Public Bill Committees

[Felicity Buchan]

Amendment 10 would remove clause 7(8), which stipulates that providing information in compliance with an information notice does not breach obligations of confidence or other restrictions on disclosure.

The intention behind clause 7 is to provide a power for enforcement authorities to issue information notices to require information from a relevant public body relating to a decision in respect of the Bill. As drafted, the clause sets out a necessary and proportionate power for enforcement authorities properly to investigate potential breaches of the ban.

I must be clear that the clause does not place an undue burden on public bodies in scope of the ban. Information may be requested only if the enforcement authority is satisfied that a person has made or will make a decision or statement in breach of the Bill and that the information is likely to be useful for the enforcement authority’s investigation. Subsection (8) provides standard wording in order to give assurance to the person complying with the information notice that they will not be breaching an obligation of confidence or any other restriction on disclosure. The Bill is by no means unique in including such drafting; the same caveat is provided for in the Agriculture Act 2020, the Building Safety Act 2022 and the Health and Care Act 2022, for example.

The hon. Member for Nottingham North has said that he is concerned that the subsection would override the privilege between lawyer and client. I can reassure him that it does not. Legal professional privilege is a fundamental common-law right, including for those public bodies captured by the Bill, and specific words would not be needed to override it. The information power therefore does not extend to legally privileged material; I can confirm that I will clarify that point explicitly in the Bill’s explanatory notes. I would also add that Richard Hermer KC has subsequently clarified, in written evidence to the Committee on this point, his view that it is likely that a court would not deem legal professional privilege to be overridden by the clause.

Subsection (8) does not provide a right to extract the information, nor does it give a power to the Government; it simply provides the person who is disclosing information necessary to investigate a potential breach with protection against a claim for breach of confidence or any other restriction. I therefore ask the hon. Member to withdraw his amendment.

[Kim Leadbeater (Batley and Spen) (Lab)]

It is really important that legislation passed by the House be clear and unambiguous. As we have heard repeatedly in this Committee from a wide variety of sources, including witnesses who gave oral evidence and those who submitted written evidence, the Bill fails that test.

This subsection is another example of that. The open-ended reference to

“any other restriction on the disclosure of information”

makes no distinction, for example, between somebody expressing a view in a private and in a professional capacity. That cannot be right. Subsection (8) should be deleted.

[Alex Norris]

I am grateful to my hon. Friend the Member for Batley and Spen for her very effective contribution, with which I agree.

I hear what the Minister says about the intention behind the clause and about whether it is necessary and proportionate. I can probably agree with “necessary”, but there is still a divergence of views between us on “proportionate”. I also hear what the Minister says about commonality with other pieces of legislation. I am willing to accept that clause 7(8) is not a unique provision, but I do not think that that means that it is therefore the right provision. It could be badly drafted here and elsewhere too; that would not be without precedent.