Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Winterton of Doncaster Excerpts

Report stage
Wednesday 25th October 2023 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. May I provide a little guidance? If Members speak for a maximum of about eight minutes, we will be able to get everyone in.

[Sir Michael Ellis (Northampton North) (Con)]

I support this excellent Bill and wish to speak against all the amendments. I commend my right hon. Friend the Secretary of State for taking the Bill through the House. I support it for three principal reasons: first, it is genuinely needed; secondly, boycotts are inherently discriminatory and contrary to public policy, especially when engaged in by third-tier local authorities; and thirdly, the BDS movement internationally is inextricably linked to antisemitism. I will explore those three points briefly.

Perhaps I can give the House just two examples of why the Bill is needed. The first is the example of the now bankrupt Birmingham City Council, which threatened in 2014 not to renew a contract with the French multinational company Veolia due to its operations in the west bank. In 2015, Veolia withdrew from the Israeli market as a consequence and the BDS movement claimed that decision as a victory. Of course, that hurt Palestinians as well as everyone else. Another example, shamefully, is that of the supermarket Sainsbury’s. In at least one of its branches, it was put under so much pressure that it removed kosher food products from its shelves following virulent anti-Israel protests. So this is about protecting communities and avoiding antisemitism succeeding. The Bill will prevent divisive behaviour that undermines community cohesion across the country. I am afraid to say that BDS activity has legitimised and driven antisemitism in the United Kingdom, as it exclusively targets Israel.

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[Sir Michael Ellis]

I absolutely agree with my right hon. Friend, who makes his point eloquently.

Israel clearly has a vibrant economy and welcomes everyone. I challenge those both outside this House and in other countries who support the BDS movement to bear in mind that I suspect that they would not be able to function in today’s modern society if they were to personally boycott companies that are already deeply engaged in Israel and do business there. I will give some examples: Apple, Google, Intel, Microsoft, 3M, Alibaba, Amazon, Fujitsu, AOL, Siemens, Bosch, Sony, Texas Instruments, Samsung, Nestlé, Coca-Cola, Western Digital, Xerox, Mitsubishi, Pfizer, Salesforce, Visa, Mastercard, Honda, Ford. I have lists of dozens of companies that do business in the state of Israel. Let us bear in mind that those persons who seek to boycott Israel do so with an air of double standards. That is the very least that can be said about it. I support this Bill and reject all of the proposed amendments.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Jeremy Corbyn.

[Jeremy Corbyn (Islington North) (Ind)]

I have not put in to speak.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call John McDonnell.

[John McDonnell (Hayes and Harlington) (Lab)]

Thank you, Madam Deputy Speaker. May I echo the comments of my right hon. Friend the Member for Barking (Dame Margaret Hodge)? If we descend into accusations that those who do not support the Bill are antisemites, or that those who support it are Islamophobic, I think we are lost, to be honest. It is important that we are careful about our language.

There is a profound misunderstanding about what we are debating. If this is about the BDS movement itself, there are mechanisms that the Government can use to proscribe an organisation. But the debate on this Bill should be about BDS as a method, a tactic. I have supported boycotting, disinvesting and sanctioning a whole range of regimes. I campaigned with and supported the anti-apartheid movement of BDS with regard to South Africa. Actually, a large number of Members on both sides of the House supported that. I also did so with regard to Saudi Arabia and its execution—tragically, it is still doing this—of members of the gay community. I have campaigned with others across the House with regard to Sri Lanka and the persecution of the Tamils, including the murder of a number of my constituents when they visited their families. I am doing the same at the moment with regard to Bahrain because of its imprisonment of the political opposition. It is the same with Russia. I was a founder member 10 years ago of the Ukraine Solidarity Campaign and we have been calling for sanctions against Russia for years—in advance of even the Government, to be honest. It is the same with Iran. I chair the Iranian workers’ movement committee, which supports trade unionists campaigning in Iran, many of whom are unfortunately in prison. There is also the Uyghurs.

On all of those, I have urged the use of BDS because when other representations and diplomacy fail, there are not many options left. One of the options, unfortunately, is the use of arms. In not promoting that, we have tried to find a middle lane, and that is economic isolation to try to influence. To be frank, it did work in South Africa. That is why we have tried to ensure that it is a mechanism that can be drawn upon. I agree, however, with my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) on the Front Bench. The important thing is to ensure that if we use this mechanism, it is used properly and fairly and that we do not discriminate against one particular country. That is what I have not done. I have called for BDS with regard to goods coming from the occupied territories and Iran because they are against the international order.

Having sat in this House for 25 years and listened to speeches from Conservative representatives, I have learned a bit about conservatism, so what I find extraordinary is that this Bill is profoundly unconservative. Those on the Government Front Bench seem to be rejecting many of the individual amendments in front of us. I have listened to Government Members arguing that the Conservative party stands for freedom of speech, support for the law, the rights of property, the democratic rights of this Parliament, local government and other agencies, devolution of decision-making, and support for the action on the environment and human rights.

Let me turn to the amendments on freedom of speech. Amendments 28 and 3 prevent the Government introducing a gagging order on even just talking about this—having a debate about it. That is profoundly unconservative. I cannot believe that Government Members are not supporting those amendments. On the issue of rights of property, I say to the Conservative Member whose constituency I cannot remember that we are both members of the local government pension fund. The Government are overriding the rights to my property, which is my pension fund. I cannot believe that the Conservatives are doing that. That is my stored wages for over 20 years of service in local government over which I now lose control, and the amendment simply says that the members of that pension fund will be allowed to decide.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the hon. Gentleman for keeping within time, but I am now going to impose a time limit of eight minutes, just to ensure that everybody gets the chance to speak.

[Caroline Lucas]

The speech we have just listened to from the hon. Member for Brigg and Goole (Andrew Percy) shows exactly why this is not the right time for this Bill and this debate. The speech from the right hon. Member for Hayes and Harlington (John McDonnell) that he criticised was a perfectly reasonable one making the case for the tools of boycott, sanctions and divestment. To suggest that those tools are intrinsically antisemitic is clearly and evidentially wrong. The vast generalisations that the hon. Gentleman has deployed again show why this Bill is deeply unhelpful and the timing downright dangerous.

The brutal attacks on Israeli civilians by Hamas on 7 October have filled every right-thinking person with horror and underscored the urgent need to stand against violence. We do that, in part, by defending and advocating human rights. These principles need to guide our response to the collective punishment of the civilian population of Gaza, too, and to any other unlawful action being perpetrated by the Israeli or Palestinian authorities, or by Hamas.

I am struggling to understand why, as one of the leading global champions of human rights, the UK would want to send a signal that it thinks that human rights matter only selectively—that would be the impact of the current wording if the Bill passes. It would say to the world that some people’s rights matter less than other people’s. Frankly, the timing seems designed to make political capital from a horrendous situation, and the Government should be ashamed. This is a new low, and it is reckless, provocative and deeply damaging. The Government risk igniting the situation further by bringing back this Bill with the clause singling out Israel and the Occupied Palestinian Territories. This legislation, in effect, applies restrictions on the right to freedom of expression and debate, in a way that risks polarising views even further. At any time, let alone in this most sensitive of contexts, enshrining in law such partiality towards the conflict is beyond irresponsible.

I have tabled three amendments to the Bill: two on the ability of public bodies to make decisions about their activities on environmental grounds and one to exclude fossil fuels from the Bill’s provisions. First, on fossil fuels, there is a worrying lack of clarity from the Government about what it may or may not be permissible for public bodies to do should the Bill be enacted. My amendment 15 is intended to clear that up and protect the right of public authorities to divest from fossil fuels.

Earlier this week, Friends of the Earth published evidence that at least £12.2 billion of local government pension funds is invested in fossil fuels. The clarity that I seek to provide with my amendment is needed because fossil fuels are obviously not covered by the environmental misconduct exemption in respect of illegal activities, because obviously extraction currently happens legally. It is needed because decisions to divest could easily be brought into the scope of clause 1 because a fossil fuel company, especially in the case of state oil and gas firms, could easily meet the threshold for association with a foreign Government. Majority state-owned or controlled oil or gas firms such as Saudi Aramco, Equinor, Petrobras and Gazprom, or other companies that are highly associated with a foreign Government, would obviously be considered to be affiliated with certain countries, which would affect decisions about things like pension funds.

The ability of pension schemes in particular to divest from fossil fuels under current legislation and guidance is well established and compatible with fiduciary duty. The consideration of whether to divest often includes the discussion or consideration of individual states as examples of why divestment is desirable. Campaigners will often publicly cite examples of states where fossil fuel extraction is taking place as a reason to divest from fossil fuel assets, even if the divestment sought is much broader. This is reasonable and entirely responsible given the financial risks associated with things such as carbon bubbles and stranded assets, let alone the climate crisis more broadly, and it is currently lawful. But if the legislation is passed, such consideration runs the risk of being judged to have been influenced by the political or moral disapproval of foreign state conduct and thus bring divestment decisions within the Bill’s scope. If the Minister does not intend fossil fuel divestment to be covered by the Bill, it must be explicitly excluded, not left to run the kind of risks that I have outlined.

On environmental misconduct, some sorely lacking clarity needs to be injected into the Bill, hence my two amendments. The Bill has an exemption that is limited to environmentally harmful behaviour that

“amounts to an offence, whether under the law of a part of the United Kingdom or any other country or territory”.

Much environmentally destructive activity takes place entirely legally; indeed, that could even be the rationale for a boycott or a divestment campaign. During the passage of the Environment Act 2021, the limitations of due diligence measures that targeted only illegal deforestation were made clear—for example, because a significant proportion of deforestation due to soy or palm oil in Brazil or Indonesia respectively could take place legally, or because it would be incredibly difficult to distinguish between legal and illegal deforestation.

My amendment 8 would expand the environmental grounds on which a public body is allowed to make certain economic decisions beyond activities that are currently simply an offence. Without it, the exemption is unworkable at worst and will undermine good practice at best. Let me explain. Several pension experts who gave evidence in Committee warned that the Bill will impact on environmental, social and governance investment decisions and cut across pension schemes’ fiduciary duty. Those experts included the Northern Ireland Local Government Officers’ Superannuation Committee and the Local Government Association. It is now standard practice to consider ESG factors when looking at investments, and there is widespread concern that the environmental misconduct exemption is so weak that it does not provide the exemptions that Ministers claim it provides. In turn, this is a threat to adherence with things such as the United Nations principles for responsible investment or, indeed, the sustainable development goals. It fails to recognise that investors often consider divergence from best practice, and not simply breaches of law, and it fails to reflect the fact that in countries with, for example, opaque legal systems, the establishment of whether an offence has occurred may not be straightforward.

There is also a risk that a campaign directed at persuading public bodies to boycott or divest on environmental grounds could end up coming within the scope of the legislation. That could happen if, for example, case studies are judged to constitute the criticism or disproval of a foreign state, or if they identify where an environmentally harmful activity such as logging in the Amazon is taking place. The Government are fond of claiming that they have the very best environmental credentials, so why would they want to scupper the potential for public bodies to demand higher environmental standards—for example, in their supply chains or from their pension fund managers—with a poorly worded reference to “environmental misconduct”?

My amendment 8 would tackle that and provide for a proper exemption. My amendment 9 would extend the definition of “environmental misconduct” to include damage, regardless of whether it was legal or illegal, as well as species, habitats and the natural world. It replicates word for word the definition of “natural environment” in the Government’s own Environment Act 2021; as such, I hope that it provides the consistency and clarity that are not currently afforded by the current wording. I would be especially interested to know why Ministers did not use that wording in the first place, given that it is already in the 2021 Act, and why they are not aiming for a consistent definition of “natural environment” across different legislation.

To conclude, my amendments are designed to properly protect the exemptions that Ministers claim are in the Bill, in line with definitions in other legislation.

[Nicola Richards (West Bromwich East) (Con)]

I rise to speak in favour of the motion and to support the Bill.

The events on 7 October mean that we are debating the Bill in a different context. We are doing so against the backdrop of the murder of at least 1,400 Jewish people and the kidnapping of hundreds in Israel, as well as a 641% rise in antisemitic incidents in the UK. The Bill is not on its own a solution to antisemitism or the key to solving every problem in the middle east. However, I will explain why it will not only provide much-needed reassurance to the Jewish community here, but benefit both Israelis and Palestinians. I will set out why the BDS movement is harmful internationally and discriminatory towards Jewish communities here in the UK, and why it is vital that Israel is named in the Bill.

I am not Jewish. I grew up in Dudley, where we do not have a Jewish community—I grew up hungry to know more about history and politics—but I when I was young my father worked for an Israeli company, ISCAR. He moved around jobs as a salesman, so I remembered his work by which country the company originated from. For me, Israel was just another one of those places where he had travelled for work. ISCAR was set up by Stef Wertheimer, a German-born Jew who fled the Nazis in 1937. He started a small metal shop and tool-making company called ISCAR in 1952.

Stef believes that capitalism is better equipped than politics to solve the conflict. He believes that, if economic disparity is at the core of the tension between Arabs and Jews, he might have a solution. In 2019, it was reported that of ISCAR’s 3,500 employees, more than 1,000 are of Druze or Arab origin. In the eyes of the BDS movement, that normalisation is problematic and should be boycotted.

My right hon. and learned Friend the Member for Northampton North (Sir Michael Ellis) has already mentioned SodaStream, a successful Israeli company that exports its products across the world. It had been providing jobs to countless Israelis, as well as once employing about 900 Palestinians who relied on the company for their livelihoods. But in 2015, it was forced out of the west bank because of the BDS movement, leading to those Palestinians losing their jobs. That harms the very people the BDS movement claims to support. Ali Jafar, a shift manager from a west bank village, who worked for SodaStream for two years, summed it up when he said:

“All the people who wanted to close”

the factory

“are mistaken…They didn’t take into consideration the families.”

It is those families we should think about when voting on the Bill.

When SodaStream closed its factory in the west bank, it moved to Rahat in the Negev desert. On the final day of Ramadan, it organised the largest Iftar celebration in Israel: almost 3,000 Israelis and Palestinians came together to break bread at the factory. The BDS movement remains against SodaStream’s factory in the Negev desert because it has found new reasons for doing so. It said:

“SodaStream is still subject to boycott by the global, Palestinian-led BDS movement for Palestinian rights. Its new factory is actively complicit in Israel’s policy of displacing the indigenous Bedouin- Palestinian citizens of Israel in the Naqab (Negev). SodaStream’s mistreatment of and discrimination against Palestinian workers is not forgotten either.”

Why are the integration successes of companies such as SodaStream and ISCAR not told? Because they show normalisation; they show neighbourly relationships and peace between peoples. I have been struck by the stories of the Hamas hostages and their families. Some of them had lived in Gaza and moved when the occupation ended in 2005, but still have Palestinian friends there. We do not hear about those kinds of relationships. Extremists do not want to portray any kind of normal life, success or quality of existence, whether they are from Hamas or the BDS movement—neither promotes peaceful coexistence.

The BDS movement boasts that, in 18 years, it has done 18 years’ worth of “turning darkness into light”—that is quite some sugar-coating if you ask me, Madam Deputy Speaker. The BDS movement has an anti-normalisation charter that forbids

“the participation in any project, initiative or activity, local or international, that brings together (on the same ‘platform’) Palestinians…and Israelis…and does not meet the following two conditions: (1) The Israeli side publicly recognizes the UN-affirmed inalienable rights of the Palestinian people, which are set out in the 2005 BDS Call, and”—

this is the most important part—

“(2) the joint activity constitutes a form of co-resistance against the Israeli regime of occupation, settler-colonialism and apartheid.”

That is evidence, if it were ever needed, that the BDS movement does not want peace. BDS ignores or rejects the Jewish people’s right to self-determination and occasionally calls for the eradication of Israel, the world’s only Jewish state, so if BDS’s objective is not peace, what is it? At its core, it is antisemitic. The Anti-Defamation League has assessed that BDS’s campaigns often include allegations of Jewish power, dual loyalty, and Jewish/Israeli culpability for unrelated issues and crises.

I will now explain why this has such a negative impact on the Jewish community here in the UK. The Jewish Leadership Council has made the case that public bodies in the UK are more likely to interact with people than the Government are, and that it is therefore important they are trusted by all communities. The JLC believes that most relationships between Jewish communities and public bodies are usually positive, but that this is undermined when those bodies seek to involve themselves in international matters and support BDS movements.

The events of the past few weeks will, I hope, give many people a better understanding of why Israel is so important to the Jewish community. Having worked in the community, visited Israel a number of times and worked with holocaust survivors, I thought I understood, but for many in the Jewish community around the world, repeating that 7 October was the biggest loss of Jewish life since the holocaust brings with it unimaginable pain and a new understanding.

Israel’s very existence was borne of the need for a safe haven for Jews. The events of 7 October were never meant to happen. Hamas knew they struck at the heart of Israel and, therefore, the heart of the Jewish community. When a movement seeks to single out the world’s only Jewish state as a unique evil, it is clear why that could be regarded as antisemitic. There are no comparable campaigns about any other state on this scale—none that mobilise as many people and seek to divide and maintain division, rather than strive for peace.

If they were to have their way, supporters of BDS might claim victory; however, they cannot claim with any credibility to be supporters of a two-state solution. Boycotts harm Israel, they harm Palestinians, and they harm any prospect of peace. The Bill is not a barrier to peace: the BDS movement, and opposing the Bill, are barriers to peace. I applaud the Government for their strong stance in taking action against BDS and for bringing this Bill before the House, and I will be wholeheartedly supporting it.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I will now announce the results of the ballot held today for the election of the Defence Committee Chair. Four hundred and thirty-three votes were cast, three of which were invalid. There was a single round of voting with 430 valid votes. The quota to be reached was therefore 216 votes. Robert Courts was elected Chair with 249 votes. He will take up his post immediately, and I congratulate him on his election. The results of the counts under the alternative vote system will be made available as soon as possible in the Vote Office and published on the internet.

[Zarah Sultana (Coventry South) (Lab)]

I rise to speak to the amendment in my name, as well as amendment 13, tabled by my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner). Both relate to how the Bill will impact public bodies’ rights to make ethical decisions on matters relating to international law and human rights, so that is the subject I will begin with.

Gaza, the United Nations has said, has become a “hellhole”. Israeli bombs have decimated whole neighbourhoods. In six days alone, 6,000 bombs were dropped on the besieged enclave—more bombs than NATO forces dropped in an entire year of intense fighting in Afghanistan. An Israeli military spokesperson was frank about the purpose of the bombing:

“the emphasis is on damage and not on accuracy”.

Nearly 6,000 Palestinians have been killed, including nearly 2,500 children. Last night was the deadliest so far, with 700 people dead. This is happening to one of the most densely populated areas on earth, where 2.3 million people, half of whom are children, are trapped in an area no bigger than the Isle of Wight.

Even before the recent violence, Gaza had been besieged for more than a decade and a half, with access by land, air and water blockaded. Back in 2010, even Conservative Prime Minister David Cameron called it a “prison camp”, but now Israel has imposed a total siege, cutting off water, fuel, electricity and food. The UN says hospitals will run out of fuel today, and incubators with premature babies will stop working. Israel’s evacuation order demanding that 1.1 million people flee their homes was described as

“impossible…without devastating human consequences”

by the United Nations, and the World Health Organisation has called it a

“death sentence for the sick and injured”.

Indiscriminate bombing, collective punishment and forcibly displacing people are “clear violations” of international law—not according to me, but according to the United Nations Secretary-General. This is in no way downplaying or denying Hamas’s appalling attacks on Israeli citizens, which I absolutely condemn, and I again echo the call for the release of hostages. Just as I and no Member here can imagine the fear and anguish of families who have seen loved ones taken hostage, I cannot imagine the terror of Palestinian families facing constant Israeli bombardment. On this question, the United Nations Secretary-General said yesterday: “International law is clear”. Yet in this House, people do not want to accept that. Hamas’s crimes in no way excuse what we have seen since.

That is relevant to this debate because these clear violations of international law have been given the green light by political leaders here in the UK and beyond, even with an Israeli defence official promising to turn Gaza into a “city of tents”. The Prime Minister has still refused to acknowledge these clear violations of international law and, unlike a growing number of his counterparts across the world, he is still refusing to call for an immediate ceasefire. That is utterly shameful, and it goes to the heart of the problem with this Bill and the need for these amendments.

Israel’s brutal war on Gaza is not an isolated example. For example, the Saudi-led war on Yemen, which I have spoken about repeatedly in this House, has claimed the lives of more than 150,000 people. It has included war crimes such as the Saudi bombing of a school bus, which killed more than 40 children and a dozen adults. That war has also been waged with the British Government’s support, including considerable military equipment and assistance.

Let us find some historical examples. Perhaps the most notable is the Government’s support for the apartheid South African regime, which people should be absolutely ashamed of and embarrassed about. The then Prime Minister, Margaret Thatcher, called the African National Congress and Nelson Mandela “terrorists”, and Young Conservatives proudly wore badges calling for him to be hanged. In each of these cases—whether it is Israel’s war on Gaza, the Saudi war on Yemen or apartheid South Africa—violations of international law and gross injustices have been committed with the support and complicity of the British Government.

If the Bill is passed unamended, on these matters and more, public bodies such as local councils and universities will not be able to make ethical procurement or investment decisions. Local democracy will be sidelined, and they will be forced to ignore questions of human rights and international law. The case of South Africa shows most clearly why that would be such a mistake.

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[Michael Gove]

My hon. Friend is absolutely right and I thank him for his thoughtful contribution.

I recognise the sincerity and commitment of my opposite number, the right hon. Member for Ashton-under-Lyne (Angela Rayner). Both she and her predecessor, the hon. Member for Wigan (Lisa Nandy), have been brave and forthright in calling out antisemitism wherever it occurs. I thank her for her work and the conversations we have had formally and informally on this issue. It is for that reason that I say, with respect, that I disagree. I understand the intent of the proposal from Labour’s Front-Bench team, but I disagree, because—as they acknowledge in their own amendment for ensuring that people cannot adopt, through an ambiguous form of words, a means of preventing people from accessing kosher or halal food—there is the potential, as lawyers have been clear, for an ambiguous form of words to be used in order, without mentioning Israel by name, to make it clear that a boycott campaign is directed against Israel. I think we all have a duty to be clear about that.

The BDS movement is clear in what it upholds: an evil campaign not just to eliminate the state of Israel but to target Palestinians who work with Israeli institutions. It has been crystal clear in recent weeks in its total failure—not just a failure, but a conscious desire not to express a shred of sympathy or regret for the loss of innocent lives. It is clear about what it wants to do to sow division. It is clear that its actions lead to, and have always led to, an increase in antisemitic attacks.

Those who speak for the Jewish community in this country have been clear as well. They respect the diversity and plurality of opinions in this House. They respect the motives, they respect the feelings, they respect the strong emotions that these issues engage. But they have also been clear that they wish this legislation to pass, they wish it to pass unamended, and they wish it to pass now. I honour them in their suffering, and it is for that reason that I urge the House to reject the amendments and to pass the Bill.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Does Chris Stephens wish to press new clause 1 to a Division?

[Chris Stephens]

No, Madam Deputy Speaker. I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

Clause 3

Exceptions

Amendment proposed: 14, page 2, line 17, leave out subsections (2) and (3).—(Angela Rayner.)

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.

Question put, That the amendment be made.