Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Oates Excerpts

Committee stage
Tuesday 7th May 2024 Lords Chamber

When it comes to priority countries that the FCDO has stated are potentially at risk of breaching international law, what is the decision-maker reasonably asked to do? I would be grateful if the Minister could provide clarity. At the moment it seems that in this area, for those two aspects, one part of the Bill is contradicting the other.

[Lord Oates (LD)]

My Lords, I share the view of the noble Lord, Lord Deben, that these amendments simply highlight the mess that the Government have got themselves into with the Bill as a whole. The Bill imposes some extraordinary obligations on public bodies, which I presume is the reason for paragraph 6 of the Schedule—it is necessary only because of those extraordinary measures.

Most of the amendments in this group do not deal with the fundamental issue that the Bill is incoherent. Amendment 18, in trying to deal with this issue, potentially gives huge powers to Ministers to profoundly shape or change the nature of the Bill by their powers to set out what should be regarded and disregarded in terms of international law obligations. Amendment 28 pretends that the overall issue with the Bill—which is the reason that paragraph 6 of the Schedule exists in the first place—does not exist. Fundamentally, as the noble Lord, Lord Hain, said, this is a very bad Bill. These amendments just underline why.

[Lord Collins of Highbury (Lab)]

My Lords, I say to the noble Baroness, Lady Noakes, that I wish the Bill was specific and addressed the manifesto commitment of the Conservative Party. The Labour Party has made it absolutely clear that we are opposed to boycotts, disinvestment and singling out Israel. The problem with the Bill is that it is wide. It covers all kinds of issues that will place public bodies in a very difficult position. In the debate on this group of amendments, we have senior legal people all saying basically the same thing: this will end up in court. When that fear of ending up in court occurs—when people read a law and say, “This is so complicated that we don’t know what it means; it will end up with us in court”—what happens then? It is the chilling effect. There will be decisions made not in the interest of the public body but on the basis of it not being sure that it is capable of making this decision. That is the important thing.

I support my noble friend’s amendment on extending the exceptions. The Schedule lays out other obligations on public bodies, not least very positive legislation that this Government have implemented on modern slavery, on other international law issues, on labour-related misconduct and so on. They are naturally there because these public bodies have already been told that these obligations are on them. There will be a lot of confusion. I agree with my noble friend’s point about taking into account potential breaches of international law by the UK but not those by other countries in the supply chain. Most of our experience of labour issues is that those supply chains can be incredibly convoluted. You do not know the origin of certain products. We have had debates in this Chamber about the use of cotton grown in Xinjiang by slave labour and being sold in British shops. Companies have decided to find out where that goes.

My noble friend also raised the Rana Plaza disaster of 2013. I remember it well, and I am sure that the Minister does, too, because many of our retail companies were selling products made in factories that were incredibly unsafe and used child labour. That disaster will stay in my mind. The government response at the time was, “There are potential breaches of international law. We will give the ILO extra money to go and investigate Bangladesh so that it commits to its proper responsibilities”. We did that.

The Government in this legislation are saying, “There are all sorts of factors that we can’t take into account—and even if we can, there are exceptions, the Secretary of State has to be involved, and we know it’s going to end up in court.” That is the problem with this legislation. It is not straightforward dealing with BDS. I wish it were. We will come on to that in the other group.

I have been trying to work out at what point I should read out the guidance on the Occupied Territories in Palestine that the Government have issued to companies. I say to the noble Baroness, Lady Noakes, please read it. The noble Baroness is nodding; she has read it. Great. I shall read it into the record, although it may take longer than the 10 minutes I am allowed.

“The UK has a clear position on Israeli settlements: The West Bank, including East Jerusalem, Gaza and the Golan Heights have been occupied by Israel since 1967. Settlements are illegal under international law, constitute an obstacle to peace and threaten a two-state solution to the Israeli-Palestinian conflict. We will not recognise any changes to the pre-1967 borders, including with regard to Jerusalem, other than those agreed by the parties … There are therefore clear risks related to economic and financial activities in the settlements, and we do not encourage or offer support to such activity. Financial transactions, investments, purchases, procurements as well as other economic activities (including in services like tourism) in Israeli settlements or benefiting Israeli settlements, entail legal and economic risks stemming from the fact that the Israeli settlements, according to international law, are built on occupied land and are not recognised as a legitimate part of Israel’s territory. This may result in disputed titles to the land, water, mineral or other natural resources which might be the subject of purchase or investment … UK citizens and businesses should be aware of the potential reputational implications of getting involved in economic and financial activities in settlements, as well as possible abuses of the rights of individuals. Those contemplating any economic or financial involvement in settlements should seek appropriate legal advice”.


That is the Government’s advice, recently issued. As the noble Lord, Lord Deben, said, we are saying that there is one policy for the private sector and another for the public sector. That is absolutely crazy. There are so many contradictions in this legislation that it beggars belief. I hope that the Minister will think hard about the complex nature of the Bill, and perhaps give it due consideration. I shall not repeat my comments on the next group, but we have often said, “Let’s sit down together and come to a solution that meets the requirements that were set out in the manifesto”. This legislation does not; that is why it is so wrong.

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[Lord Oates (LD)]

My Lords, I am pleased to support the noble Lord, Lord Warner, in his Amendment 20, which, as he set out, would delete Clause 3(7) of the Bill. I do so because what is already a very bad Bill is made worse by this subsection. First, it singles out Israel as the only country which cannot be exempted from the provisions of the Bill, even should a future Government decide that such an exemption should be made. The noble Lord, Lord Mann, has set out why that is potentially problematic in relation to the IHRA anti-Semitism definition. Moreover, Ministers have frequently argued that legislation should not single out individual countries but rather should apply common principles. Clause 3(7) goes completely against that approach and, in doing so, sets a dangerous precedent. Like the noble Lord, Lord Warner, I seriously doubt that it will do anything to tackle anti-Semitism; in fact, it is most likely to be counterproductive.

Secondly, as we have heard, Clause 3(7) conflates Israel and the Occupied Palestinian Territories, contradicting long-standing British-government policy and violating UN Security Council Resolution 2334, which was co-authored by the UK, voted for by the UK, and requires member states to distinguish between Israel and the Occupied Palestinian Territories. As far as I can see—and we have heard a lot about local government and other public bodies not setting foreign policy—the Department for Levelling Up, Housing and Communities is promoting legislation that directly contradicts UK Government policy and the UK-authored Security Council resolution as part of a Bill whose declared objective is to prevent public bodies contradicting government policy.

This contradiction of settled UK foreign policy has serious ramifications which Ministers are trying to avoid by pretending that the Bill is compliant with Resolution 2334. At Second Reading in the other place and in response to Dr Philippa Whitford, who asked why the Bill did not distinguish between Israel and the Occupied Palestinian Territories as required by the resolution, Michael Gove stated that

“they are separated in the Bill. I am afraid the hon. Lady is wrong”.—[Official Report, Commons, 3/7/23; col. 592.]

His claim is apparently that the separation of Israel and the Occupied Palestinian Territories between paragraphs (a) and line (b) of subsection (7) satisfies the requirements of Resolution 2334, but of course that is nonsense. The resolution does not call for the semantic separation of the State of Israel and the Palestinian territories; rather, it

“Calls upon all States, bearing in mind paragraph 1 of this resolution, to distinguish, in their relevant dealings, between the territory of the State of Israel and the territories occupied since 1967”.

It is absolutely clear that the “relevant dealings” of the Bill explicitly do not distinguish between the two, because subsection (7) applies equally to them. I hope the Minister will address this issue, because she seemed herself to stray towards this sort of Govian sophistry at Second Reading in this House.