LGPS Investment Decisions

Dear constituent,

Thank you for contacting me about a ruling by the Supreme Court in relation to guidance on Local Government Pension Scheme (LGPS) investment decisions.

In September 2016, the UK Government published guidance on preparing and maintaining an investment strategy statement regarding the LGPS. This guidance included two provisions: that those administering the pension scheme should not pursue policies that are contrary to UK foreign policy or UK defence policy, and; that using pension policies to pursue boycotts, divestment and sanctions against foreign nations and UK defence industries are “inappropriate”.

As you are aware, in April the UK Supreme Court found in favour of the Palestine Solidarity Campaign
(PSC) in its legal challenge to UK Government guidance preventing the LGPS in England and Wales from pursuing boycotts, divestment and sanctions against foreign nations and UK defence industries as part of its investment strategy. The Supreme Court ruled that UK Government guidance in relation to the provisions outlined above were unlawful, on the basis that the issue of them by the Secretary of State exceeded his powers.

In your letter, you raise concerns that this ruling means that pension schemes now have the power to exercise their own foreign policy. You also call on the UK Government to legislate to “close this legal loophole” to prevent public bodies from imposing their own direct or indirect boycotts, divestment or sanctions campaigns against foreign countries, including Israel.

I am opposed to boycotts and the isolation of Israel, which I believe could undermine the prospect of a peace process and therefore of a two-state solution. However, I remain concerned about Israeli settlements in the occupied West Bank and East Jerusalem and I am opposed to the annexation of Palestinian lands. I believe
goods from the Occupied Territories should be labelled so individuals can make their own consumer decisions about what to buy.

More widely, I believe a two-state solution is the only way to peacefully end the senseless cycle of violence and suffering in both Israel and Palestine. I believe it is the absence of a credible political dialogue between the Israelis and the Palestinians that is the greatest obstacle to peace and changing this will require courageous political leadership on both sides.

As your elected representative in Parliament, I welcome your views on this important issue. Thank you once again for contacting me.

Yours sincerely,

Peter Dowd MP