Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

2nd reading
Tuesday 20th February 2024 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

That the Bill be now read a second time.

[The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)]

My Lords, at a time of increasing global division, the effective communication of the United Kingdom’s foreign policy is vital. In order to achieve our objectives, the nation must speak clearly with one voice. It is for His Majesty’s Government alone to decide the UK’s foreign policy.

I acknowledge that the Bill is being debated at a troubling time. Although some noble Lords may disagree with the Government on certain aspects of this legislation, I hope that everyone in this House will be sensitive to the broader issues with which the Bill deals. It will give effect to an important manifesto commitment. It is vital that public bodies are not allowed to pursue policies, through their investment and procurement decisions, in order to try to legitimise a UK foreign policy that differs from that of HMG.

Some public bodies have tried to declare boycotts and divestment policies that are inconsistent with the foreign policy set by the Government. Local councils have passed motions in support of boycotts. Local government pension schemes are frequently under pressure to divest certain securities. Universities, too, have been pressurised by groups that want to impose their own views about foreign policy.

The campaign that has placed the most pressure on our public bodies is the BDS movement. It deliberately asks public bodies to treat Israel differently from any other country, and its founders have been clear in their opposition to the existence of Israel as a Jewish state. Not only is that at odds with the policy of this Government, which is to promote a two-state solution, but we have seen an increase in anti-Semitic events following on from the activities of the BDS movement. These concerns pre-date the 7 October attacks, but since then the Community Security Trust has recorded the highest-ever number of anti-Semitic incidents, alongside increasing pressure for public bodies to engage in BDS activity.

The provisions in this landmark Bill prohibit public bodies from imposing their own boycotts or divestment campaigns against foreign countries or territories. It is clearly wrong that individuals who have roles of authority in a subordinate public body can act in such ways. It is also wrong that those public bodies can act in a way that, at home, jeopardises community cohesion while sowing confusion among our international allies about UK government policy.

It is particularly noticeable that boycotts and divestment campaigns disproportionately target Israel, especially in recent months in the wake of Hamas’s despicable terror attack and the resulting conflict. These boycotts contribute to the depressing rise of anti-Semitism across the UK, as reported last week by the Community Security Trust, which recorded its highest-ever annual total of anti-Jewish hate across the UK.

This Bill was unamended in the other place. That reflects the care taken in the drafting of this legislation to ensure that it adequately prohibits BDS campaigns in public bodies, applies to the correct public bodies within its scope and provides appropriate enforcement powers. Noble Lords may wish to table amendments in Committee that can improve the Bill, and of course I am open to considering those.

I now turn to the Bill in greater detail. It will prohibit public bodies from implementing boycotts or divestment campaigns against foreign countries and territories that are inconsistent with the legal sanctions, embargoes and restrictions set by HMG. The Bill will apply to public bodies UK-wide. It provides for an enforcement regime with the power to issue compliance notices and to investigate and fine public bodies in breach of the ban.

The main provisions are as follows. The Bill will ban public bodies from considering the country or territory of origin of a product or service, in a way that indicates moral or political disapproval of foreign state conduct, when making a procurement or investment decision. It does not prevent public bodies taking such considerations into account where this is required by formal UK government legal sanctions, embargoes and restrictions. To capture the rare and legitimate occasions when territorial considerations are relevant to a procurement or investment decision, the Bill provides for a number of exceptions to its provisions. For example, the Bill will not prevent public bodies taking into account territorial considerations for reasons such as national security, labour-related misconduct, and legitimate business and financial considerations. It has been drafted to ensure that it does not have a chilling effect on investments or prevent fund managers being able to assess the political risk of investments.

The Bill will work in harmony with the Procurement Act and will support it in better tailoring the procurement framework to our country’s needs. This Bill will in no way hinder our ability, under that Act, to exclude suppliers where necessary, including where there is evidence that a supplier is involved in modern slavery practices. Public bodies covered by the Procurement Act can therefore be confident that they will be free to decide which suppliers are eligible to bid and which is the best bid to meet their requirements, taking into account all relevant factors. However, they must not base such decisions on territorial considerations in a way that indicates political or moral disapproval of foreign state conduct.

The Bill has been drafted so as not to interfere with any individuals’ or bodies’ rights under existing human rights legislation, including the European Convention on Human Rights. The Government are committed to protecting freedom of speech and are not restricting any person’s or private organisation’s right to free speech. This applies to all in their individual capacities as elected officials, and this distinction has been made clear in the Bill’s Explanatory Notes. The Bill will apply only to decisions by a public body related to its investment and procurement functions. It will not interfere with any person’s or private organisation’s rights to express a view or to protest. Accordingly, I have signed a statement of compatibility with the European Convention on Human Rights.

On the type of public bodies that are covered by the Bill, they include the devolved authorities, local authorities, local government pension schemes, universities, government departments and agencies, publicly funded schools, and cultural institutions, such as museums and theatres, which receive significant public funding. The Bill will apply to public bodies across the country. It will cover bodies in Scotland, Wales and Northern Ireland, including devolved bodies with wholly or mainly devolved functions, as well as those with wholly reserved functions. As foreign affairs is a reserved matter, we will not seek legislative consent from the devolved assemblies to apply the Bill’s provisions to devolved bodies.

Moving on to the countries and territories covered by the Bill’s provisions, I mentioned earlier that Israel is a frequent and disproportionate target of boycotts and divestment campaigns. To ensure that the Bill is effective at banning divisive behaviour, it will apply to all countries and territories, including Israel and the Occupied Palestinian Territories and occupied Golan Heights.

Another provision I wish to highlight is one that recognises the need for flexibility when there are fast-moving changes in the global landscape. The Bill includes a power to exclude a certain country or territory from the Bill’s provisions via secondary legislation. In fact, we intend to use this power to maximise our impact on Putin’s capacity to fund his war by exempting Russia and Belarus from the Bill to allow public bodies to continue to stop procurement from Russia and Belarus. This means that public bodies will be able to consider how, in line with UK foreign policy, they can further cut ties with companies backed by or linked to the Russian and Belarusian state regimes while minimising the impact on taxpayers and the delivery of public services.

At the same time, we have seen examples of public bodies making declarations to boycott and divest as far as the law allows. These are harmful even where the law does not allow boycotts and divestments and therefore such declarations ought not to be made. There is concern that recent declarations of anti-Israel boycotts, even when not implemented in practice, have driven and contributed to rising anti-Semitism. For example, in 2019, Leicester city councillors voted to boycott produce originating from the Israeli settlements in the Occupied Palestinian Territories. Similar resolutions were passed by Swansea city council in 2010 and Gwynedd Council in 2014. That is why the Bill will ban public bodies from publishing statements indicating that they intend to engage in activity prohibited by the Bill, even where there is no intention to implement.

I stress that the Bill will apply only to public bodies carrying out public activity. Therefore, it will not prohibit individuals such as elected officials from speaking in favour of a boycott or divestment policy. I understand that some are concerned about how elected officials could differentiate between individuals’ statements that are caught or not caught by the prohibition. I should explain that councillors could place their authority in breach of the ban only if they were making a statement of intent to boycott on behalf of their authority. The Bill will not restrict representatives, including council leaders, from expressing their support for a boycott in a debate or on their personal social media. The Government are entirely committed to protecting free speech, and it is not our policy to restrict what individuals can say. Accordingly, I have signed a statement of compatibility of the Bill with the European Convention on Human Rights.

To ensure that the Bill is effective, we have provided for an enforcement regime that will apply to all public bodies captured by the Bill, UK-wide. The regime gives Ministers and designated regulators the power to issue compliance notices and to investigate and fine public bodies where there is evidence that they have breached the ban. This will be at minimal cost to taxpayers, and we will work closely with regulators to ensure that it does not place any unnecessary burdens on them. We will make secondary legislation setting out factors to be considered or not to be considered in determining the appropriate fine. Public bodies that do not follow the law will also be open to judicial review.

This legislation honours the promise we made to the electorate. It will ensure consistency in the UK’s foreign policy agenda, support public bodies to remain focused on their core duties, and prevent divisive campaigns that target particular sectors of our society to the detriment of our wider community spirit and cohesion. I look forward to working across the House to deliver this important legislation. I beg to move.

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[Baroness Neville-Rolfe (Con)]

My Lords, I thank all those who have contributed to today’s debate in support of the Bill, including my noble friends Lady Noakes and Lord Wolfson of Tredegar, the noble Baroness, Lady Deech, and the noble Lords, Lord Stevens of Birmingham and Lord Verdirame. I hope to convince many more noble Lords to do the same during our Committee discussions. Valuable contributions have been made today from all sides of the House. I would like to address the main themes of what has been a hotly contested debate and some of the questions raised by noble Lords.

Anti-Semitism is often referred to as the world’s oldest hatred; unfortunately, it is still very much alive. Since the 7 October attacks, we have seen a surge in anti-Semitic incidents in the UK. The Community Security Trust recorded its highest-ever total of anti-Semitic incidents in 2023, and 66% of these incidents occurred after 7 October. Many British Jews are understandably scared. Some Jewish schools in London even temporarily closed their doors over security fears.

Now more than ever, the Government should be taking steps to stop behaviour that could legitimise or even drive anti-Semitism. This is what the Bill does. The BDS movement is pernicious and has no place in our public institutions. That is why the Bill has been widely supported by the Jewish community in the UK. It has been endorsed by the Jewish Leadership Council and the Board of Deputies of British Jews.

The reasons for this were persuasively outlined by my noble friend Lord Wolfson of Tredegar, citing some telling examples from the UN, local government, supermarkets and universities. I am very grateful to him for coming to make the case against BDS, and doing it so clearly. Boycott and divestment campaigns undermine community cohesion and can confuse the Government’s foreign policy, so it is vital that we deal with this issue as we promised in the 2019 manifesto.

We have taken care to keep the scope of the Bill narrow, so that it applies only to the procurement and investment decisions of public authorities, as defined in Section 6 of the Human Rights Act 1998. Legislation brought forward in other countries on this issue, such as in some states of the United States, has gone beyond this.

I have read the report on the Bill that was prepared by the Constitution Committee and referenced by the noble Lords, Lord Collins of Highbury and Lord Shipley, and the noble Baroness, Lady Chapman, and I thank the committee for its useful contribution to this debate. I will take the opportunity to respond to some of the points that it raised, and to tackle points that have been raised during this debate.

First, concerns were raised by the noble Baronesses, Lady Chapman of Darlington and Lady Janke, and the noble Lord, Lord Browne of Ladyton, and others, about Clause 4, which prohibits public authorities from making statements indicating that they intend to boycott or divest, or would if it were legal to do so. This provision is a vital addition to the Bill. Such statements can be just as divisive as boycotts that are implemented, and have been widely condemned by Jewish groups. As expressed by the noble Lord, Lord Stevens of Birmingham, it is vital that the prohibition also applies to statements indicating that a public authority would boycott if it were legal to do so. This is because, in 2014, Leicester City Council passed a resolution saying it would boycott produce from Israeli settlements in so far as legal consideration allowed. Community cohesion was, of course, at the heart of the party’s manifesto commitment, and that is essential to fulfilling it.

I explained in my opening remarks that that provision will not prevent elected officials, such as local councillors, expressing their support for boycotts or divestment campaigns. The distinction has been made clear in the Bill’s Explanatory Notes, so it is not necessary to state that in the Bill. The Bill will restrict individuals from making these statements only when speaking on behalf of a public authority, which do not have human rights guaranteed by the European Convention on Human Rights. The clause has been drafted narrowly and will not in any way prevent public authorities making statements on foreign policy that do not express the intent to boycott or divest.

The noble Baroness, Lady Chapman of Darlington, asked what would happen if an academic expressed their support for a boycott at the same time as their university breached the ban, and how that would be investigated. An academic would be considered to be speaking on behalf of the university in the context of the Bill only if they had a role in the university’s decision- making process for public investment and procurement decisions, which I hope deals with her point.

The noble Lords, Lord Hain, Lord Boateng, Lord Davies of Brixton and Lord Oates, and the noble Baroness, Lady Bennett of Manor Castle, among others, raised their concern that this Bill would have prohibited local authorities from boycotting South Africa in the 1980s, and mentioned their own activities at the time. However, the movement to boycott South Africa was successful because of a concerted international effort led by Governments across the world. Although public authorities played a role—

[Lord Boateng (Lab)]

The Prime Minister of Great Britain at the time, Margaret Thatcher, consistently opposed boycotts in every international forum and consistently opposed the role of local government, churches, trade unions and others in extolling the virtue of boycotts. She was totally opposed to boycotts. The Minister really must take care in these assertions, because what she said simply does not bear any examination at all.

[Baroness Neville-Rolfe (Con)]

I was going to say that, although public authorities and individuals played a role, it was by acting in concert with the UK Government that we were able to pressure the South African Government—

[Lord Boateng (Lab)]

The UK Government consistently opposed local authorities. It is simply not true to say that the GLC or any other local authority acted in concert with Margaret Thatcher’s Government. That is nonsense.

[Baroness Neville-Rolfe (Con)]

We will move on. Obviously, I agree that the history of—

[Lord Hannay of Chiswick (CB)]

On that point, if can help the Minister, I represented this country at the United Nations at the time and what the noble Lord, Lord Boateng, says is totally accurate.

[Baroness Neville-Rolfe (Con)]

We will move on. I was just going to say that it was amazing that the change happened in South Africa. I remember visiting it in the 1990s, after the change.

[Baroness Jones of Moulsecoomb (GP)]

I am sorry to intervene, but we cannot let that go. If that was in the Minister’s notes, they are absolutely wrong. I am afraid I think an apology is necessary.

[Baroness Neville-Rolfe (Con)]

I said what I said with due advice and knowledge. I take the points that have been made.

[Lord Hain (Lab)]

I am sorry to detain the House. Not only do I endorse everything that my noble friend Boateng said, but the American Government under President Reagan also opposed boycott action. It was only the Black Caucus in Congress forcing through the loan sanctions in the late 1980s that accelerated the decline of apartheid. Virtually every Government in Europe and right across the world, including white Commonwealth countries, opposed boycott action in every respect. If the Minister’s officials are feeding her this nonsense, she should not simply repeat it.

[Baroness Neville-Rolfe (Con)]

I am grateful for the comments of the noble Lord, Lord Hain. I will certainly look into this further and perhaps we can come back to it on another occasion.

Perhaps me could move on, in the interests of time, to climate change. I would like to clarify that the Bill will ban only considerations that are country-specific. It will therefore not prevent public local authorities divesting from fossil fuels or other campaigns that are not country-specific.

The Bill will not prevent public authorities accounting for social value in their procurement decisions, the reform mentioned by the noble Lord, Lord Collins— of course, we worked together on moving to most advantageous tenders; that is a change that has come about. For example, authorities might structure their procurement so as to give more weight to bids that create jobs or promote animal welfare. Moreover, the Bill contains an exception to the ban for considerations that relate to environmental misconduct, as I think the noble Baroness, Lady Bennett, mentioned.

To answer the question from the noble Lord, Lord Collins, there was official-level engagement with the devolved Administrations on the Bill’s provisions before it was introduced to the other place through the common frameworks working groups process. Senior official engagement on the Bill dates back to April 2022. The Minister for this Bill in the other place, who I saw witnessing our proceedings earlier this evening, has also engaged with responsible Ministers in Scotland and Wales. We intend to engage with Ministers in Northern Ireland now that power has been restored.

The Government have never set out to legislate without consent. We formally sought consent from all the devolved legislatures. Where the legislative consent process is engaged, we always tend to legislate with the support of the devolved Administrations and the consent of the devolved Parliaments. However, as the noble Lord, Lord Stevens of Birmingham, highlighted, boycotts and divestments against foreign countries or territories are a matter of foreign policy. This Bill relates to foreign affairs and international relations, which are reserved matters, but I am sure we will come back to this point in Committee.

I turn to the Bill’s enforcement powers. I start by clarifying that the Bill does not create any new criminal offences, as suggested by the noble Baroness, Lady Janke. They are not criminal offences. Moreover, these enforcement powers are not unprecedented: the regime is based on existing enforcement regimes, such as the powers given to the Office for Students in the Higher Education and Research Act 2017. Clause 7 is a necessary addition to the Bill to ensure that enforcement authorities have the necessary information to assess whether there has been a breach of the ban. It would not make sense to implement a ban with a toothless enforcement regime but, again, I am sure that we will discuss enforcement further in Committee.

The noble Baroness, Lady Chapman of Darlington, and the noble Lords, Lord Wallace of Saltaire, Lord Willetts, Lord Hannay of Chiswick and Lord Johnson of Marylebone, questioned why the ban needs to apply to universities. This ban will ensure that any public authority, including universities in scope of the Bill performing public functions, can maintain their focus on their core purpose rather than taking partisan stances that undermine community cohesion.

It is not appropriate for those institutions to have a corporate view on a matter of foreign policy in the context of their public investment and procurement functions. That risks stifling the academic freedom of individual members of staff to take positions on foreign policy. However, I note the comments made by the noble Lords, Lord Johnson, Lord Willetts, Lord Shipley, and others on the ONS reclassification of universities. I will come back to noble Lords on this issue in Committee, once I have consulted other Ministers.

[Lord Wallace of Saltaire (LD)]

My Lords, regarding public investment and private investment, a lot of our universities have very substantial endowments. Will the Minister clarify that these are well outside the Bill’s remit? When they take decisions on investment and procurement from their private investment funds, they are acting privately and not publicly.

[Baroness Neville-Rolfe (Con)]

That is my sense, but I will obviously check where we are. I would also make it clear that things such as conference centres and so on are obviously outside the remit. I will come back to the noble Lord on the exact definition, if I may, and we can perhaps discuss it in Committee in any event.

I will now address concerns that this Bill represents a change in the UK’s foreign policy. The noble Baroness, Lady Kennedy of The Shaws, and others, will be pleased to know that the Government have been clear throughout the Bill’s passage that nothing in this Bill changes the UK’s position on Israeli settlements. They are illegal under international law, present an obstacle to peace and threaten the viability of a two-state solution. The Government continue to urge Israel to halt settlement expansion immediately.

I reassure the House that the Government’s assessment is that the Bill distinguishes between Israel and the territories it has occupied since 1967. It is therefore compliant with UN Security Council Resolution 2334. The Government believe very strongly in the importance of complying with international obligations under the UN Charter.

[Lord Oates (LD)]

Could the Minister tell us how the Bill distinguishes this, because the clause applies to them all equally? Could she set that out?

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[Baroness Neville-Rolfe (Con)]

The instructions for the drafting were to ensure the distinction and compliance. The Bill sets these out individually and I understand that it is compliant. The Government believe very strongly in the importance of compliance.

[Baroness Blackstone (Lab)]

The Minister says it is her understanding that this applies. I think her understanding is inadequate on this issue because there is nothing in this Bill that makes a clear distinction between the Occupied Territories and Israel itself. Perhaps she could come back to the House, or write to us all, when she has clarified this and set out exactly where this distinction is made.

[Baroness Neville-Rolfe (Con)]

I would be happy to do that and to discuss these clauses in Committee, in the usual way. The Bill does not break international law and will not compel any public authority—

[Baroness Blackstone (Lab)]

This is not just a matter of waiting for Committee; this is a matter of clearing up something very fundamental following questions that have been raised at Second Reading.

[Baroness Neville-Rolfe (Con)]

I made it clear that it is compliant. I will write a letter setting that out in the coming days.

As many noble Lords have said, there has been a rising problem of anti-Semitism since 7 October. I believe we now need this Bill all the more and that it is important to protect community cohesion.

I thank the noble and learned Lord, Lord Etherton, for his kind remarks and his helpful discussion on his concerns with the exception to the ban for considerations that a public body deems relevant to international law. This exception is necessary to ensure that public authorities are not forced to make a decision which could put the UK in breach of its obligations under international law. Public authorities cannot have their own subjective views on what constitutes a breach of international law. They must reasonably consider the decision relevant to the UK’s obligations under international law.

I now turn to China, as the noble Lord, Lord Wallace of Saltaire, and the noble Baroness, Lady Janke, raised the matter. The Procurement Act, which we worked on together, will further strengthen our approach to exclude suppliers where there is clear evidence of the involvement of forced labour or other modern slavery practices. This Bill will not prevent public bodies conducting due diligence and considering the location of suppliers when assessing modern slavery risk and will not prevent public bodies adhering to modern slavery guidelines. We will continue to keep our policy response under review. The Bill’s power to exempt a particular country or territory from its provisions will allow the scope of the Bill to evolve in line with the UK Government’s foreign policy.

Additionally, concerns have been raised around how the Bill will impact the ability of public authorities to protect against human rights abuses. It is the Government’s view that allowing for blanket exclusions of suppliers because they are based in a particular country, for an undisclosed period, is disproportionate and unfair on suppliers from those countries which operate fairly and ethically. However, I can assure Members of the House that the Bill will not prevent public authorities disregarding suppliers involved in human rights abuses on a non-country specific basis. Public bodies should not be pursuing country-specific campaigns.

[Lord Hendy (Lab)]

Can the Minister explain how that works? If a public authority decided that it would not trade with any supplier which banned trade unions or the right to strike, and, subsequently, a tender came in from China, could it or could it not, under the Bill, decide not to accept such a tender?

[Baroness Neville-Rolfe (Con)]

I do not entirely understand the question, but I am happy to research that and come back. The basic point is that public bodies should not be pursuing country-specific campaigns, as foreign policy is a matter for the UK Government alone—but obviously we need to understand the details in the supply chain.

Additionally, the Bill contains an exception to the ban for various considerations where the Government have assessed it appropriate for public authorities to make territorial considerations influenced by moral or political disapproval of foreign state conduct, including considerations relevant to labour market misconduct, which was a concern of the noble Lord.

Bodies that administer the Local Government Pension Scheme are captured by the definition of “public authorities” in Section 6 of the Human Rights Act 1998, and it is therefore appropriate for that decision to be captured. For example, a UN special rapporteur wrote to the LGPS in November 2021 demanding divestment from a number of Israeli companies, and the demand cited its ability to play a “transformational role”. I think we can agree that the role of local authorities is to manage the assets to deliver benefits to members.

The noble Baroness, Lady Young of Old Scone, asked whether the pension fund Nest and the PPF are in scope of the Bill. The only pension funds the Bill will apply to are those in the Local Government Pension Scheme, so they are not within scope.

There was a long conversation about the application of the Bill—which bodies it applies to. It will apply to public authorities, as defined in Section 6 of the Human Rights Act 1998. This definition has been in statute for 25 years and sets the scope for the application of fundamental legislation.

Indicative factors that were relevant to judges’ previous decisions on the issue include the body receiving a significant amount of public funding, the body carrying out acts in exercise of statutory powers and the body providing a public service. I encourage any institution that is unsure whether it is bound by Section 6 of the HRA to seek independent advice, but I have noted various questions on scope that we may come back to in Committee, because there were some useful contributions on that, including from the noble Baroness, Lady Grey-Thompson.

I clarify that the Bill’s Short Title provides a general indication of its subject matter, and it is clear that it applies only to public authorities, as defined in Section 6 of the Human Rights Act.

This legislation delivers an important manifesto commitment. It will ensure that the UK has a consistent foreign policy approach and speaks with one voice internationally. I have not had time to answer every point, but I have been listening carefully. I look forward to working with noble Lords throughout the passage of the Bill to deliver this important legislation and to continue to engage on the various knotty and important issues that have been raised today. I commend the Bill to the House.

Bill read a second time.

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Moved by

[Baroness Neville-Rolfe]

That the bill be committed to a Committee of the Whole House, and that it be an instruction to the Committee of the Whole House that they consider the bill in the following order:

Clauses 1 to 3, Schedule, Clauses 4 to 17, Title.

Motion agreed.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Committee stage
Wednesday 20th March 2024 Lords Chamber

I give fair warning: we are in Committee and I am sure the Minister will be attempting to give us clarity, but I hope we can intervene to ensure that, when something is said, we can better understand the impact and intent of this clause.

[The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)]

My Lords, I thank all noble Lords for their amendments and for their contributions to the debate. I look forward to scrutinising the Bill and these proposed changes in detail during the four Committee days that we have set aside—although this one has been a little truncated. I remain open to listening to noble Lords’ views from all sides, and I hope we can use these sessions to put forward the best possible version of this legislation.

Clarity on all sides is important, and I look forward to further meetings with the noble Lord, Lord Wallace of Saltaire, as the Bill progresses. He knows I enjoy meetings with him on the Bills that we have done together. Probing amendments are also important, as the noble Lord, Lord Collins of Highbury, has just said. We were of course both involved with the Procurement Act and I look forward to discussing how the two pieces of legislation interact and how human rights considerations are respected—as they are.

I hope that, in responding to these six amendments, I can assure the House that Clause 1 as currently drafted is the most proportionate and clear way of fulfilling the manifesto commitment of banning public bodies from imposing their own boycott and divestment campaigns.

Clause 1 sets out three tests that must be met to trigger the ban. First, the ban is narrow. It applies only to procurement or investment decisions. Secondly, the public body must have considered a specific territory or country as part of making its decision. Thirdly, that consideration must reflect political or moral disapproval of the conduct of a foreign state.

I turn first, if I may, to Amendments 3, 4 and 5, tabled by the noble Lord, Lord Verdirame. I am grateful for his general support. However, together, his amendments would alter the scope of the clause. Amendments 3 and 5 would prohibit public authorities from being influenced in any way by foreign state conduct. This would widen the prohibition in Clause 1 to include considerations that relate specifically or mainly to a country or territory in a way that is influenced by approval of foreign state conduct. The current drafting prohibits only disapproval of foreign state conduct, and the inclusion of moral and political disapproval is necessary to ensure that the Bill does not capture legitimate territorial considerations that are not about boycotts and divestment campaigns and would take the Bill beyond the manifesto commitment. An example of this would include encouraging trade with important trading partners. These amendments would therefore prohibit a public authority from favouring goods or services from a particular country or territory, based on approval of that country’s conduct. It therefore captures a broader range of decisions that are not relevant to boycotts and divestment campaigns.

Amendment 4, on the other hand, would narrow the prohibition so that it applied only in the case of disapproval of a foreign state’s conduct within its own territory. It would not apply in the case of disapproval of a foreign state’s conduct outside its territory. I agree with the comments made by my noble friend Lady Noakes: this would effectively allow public authorities to boycott countries whose foreign policy they disapproved of. This could leave a significant loophole—a word I think she used—in the ban and undermine the manifesto commitment.

I will now address Clause 1(7) in response to Amendment 6 by the noble Lord, Lord Wallace of Saltaire, and the concerns raised by the noble Baroness, Lady Janke. This amendment would permit public authorities to engage in boycotts and divestment campaigns as long as they were only a result of pressure from a third party, such as a student union, rather than a result of the public authority’s own moral or political disapproval. Subsection (7) is a necessary element of the Bill, as public authorities such as universities and local authorities are frequently pressured to engage in boycotts or divestment campaigns. For example, student unions at Warwick University and Sussex University have passed motions calling for their universities to divest from Israeli companies. If a university conducted a boycott or divestment campaign because of such pressure, rather than because of its own view of a foreign state, we would want that campaign to be caught. Subsection (7) extends to any person seeking to persuade the public authority. However, for there to be a breach of the ban, an enforcement authority must be satisfied that there is enough evidence that a third party influenced the public authority.

I will address the comments of the noble Baroness, Lady Janke, on decision-making, if she would agree, on group 2 because we are going to be discussing the meaning of a decision-maker for the purposes of the Bill.

Finally, and most importantly, I turn to Amendments 1 and 2, tabled by the noble Lords, Lord Wallace of Saltaire and Lord Palmer of Childs Hill. Amendment 1 would narrow the scope of the prohibition in Clause 1 so that it prohibited public authorities from taking account of territorial considerations only where moral or political disapproval of foreign state conduct is the “primary or sole” factor in the decision. My noble friend Lord Leigh of Hurley asked a question which made this point, while my noble friend Lord Wolfson of Tredegar was concerned that it would increase uncertainty and lead to legal disputes.

Similarly, Amendment 2, tabled by the noble Lord, Lord Palmer, would narrow the prohibition to decisions “materially” influenced by moral or political disapproval of foreign state conduct. Like my noble friend Lord Wolfson, I do not agree with weakening the effect of the Bill in this way. Public authorities buying goods or services, or making investments, should not be influenced by moral or political disapproval of foreign state conduct to any degree, unless—and this is important—one of the exemptions, such as environmental or labour misconduct, applies.

I reassure the Committee that Clause 1 will not capture fleeting and inconsequential remarks made during the procurement or investment decision-making process. The Bill prohibits only considerations that a reasonable observer of the decision-making process would consider a contributing factor to a decision.

[Lord Collins of Highbury (Lab)]

It is precisely that point I want to better understand, because many decisions are going to be complex. While the Minister mentioned the exclusion of things, there could be a combination of issues which would influence the final decision. Somebody might be able to say, “Actually, that combination has become a moral and political thing”. That is what really concerns me. The Minister is very confident that certain things will not be captured, but I do not see that. I would like her to explain in a little more detail that final point she made.

[Baroness Neville-Rolfe (Con)]

We will try to do that. I am also happy to discuss this further, because it is obviously an important point in relation to the Bill and, as we agreed at the beginning, we need to try to find a way that does not create a lot of uncertainty.

The noble Lord, Lord Wallace of Saltaire, commented on the perceived lack of evidence for the Bill, but boycotts have been attempted by several public authorities in recent years. In 2014, Leicester City Council passed a motion boycotting goods from Israeli settlements, as far as the law allows. Several other local authorities have passed boycotting or condemnatory motions, including Swansea Council, Gwynedd Council—

[Lord Collins of Highbury (Lab)]

I am sorry to interrupt, but on that point can the Minister tell us what the FCDO’s advice and the United Nations decisions are in relation to the Occupied Territories?

[Baroness Neville-Rolfe (Con)]

I am certainly very happy to come back to that on a later group of amendments.

[Lord Collins of Highbury (Lab)]

But it is material to what the Minister has just said.

[Baroness Neville-Rolfe (Con)]

I will see if I can come back to it before we finish. I was trying to give the examples that the noble Lord, Lord Wallace of Saltaire, had asked for. There was West Dunbartonshire Council and Stirling Council, and in 2021 Lancaster City Council passed a motion in support of the wider BDS movement.

[Lord Collins of Highbury (Lab)]

I come back to the first point that the Minister made. It is really important that we are clear about this, because one concern we have mentioned—I am not going to make a Second Reading speech—is the impact that this Bill has on the United Kingdom’s foreign policy. If there is a discussion about goods from and investments in the Occupied Territories, she needs to explain why she has evidenced that and how it is supported by the FCDO’s own advice and the Government’s support for United Nations resolutions on that subject.

[Baroness Neville-Rolfe (Con)]

I can certainly provide more detail of the boycotts, if that is helpful.

[Lord Collins of Highbury (Lab)]

No, that is not what I am asking. The first example that the Minister gave was in relation to the Occupied Territories. I really think it is important that we understand why she has referenced that.

[Baroness Neville-Rolfe (Con)]

I was giving a list and I will certainly come back on that question. We have a group relating to the Occupied Territories later on, when we can go into this in more detail. If the noble Lord can give me a bit of slack, I will see if I can get fuller information and come back to that at the end.

I was trying to answer the question on evidence. If I may, I should also like to cite, from September 2023, Islington Council passing a motion in opposition to this Bill, expressing its support for BDS campaigns—which everybody has said that they are very unhappy about—and resolving to:

“Continue to ensure that our own ethical procurement strategy doesn’t include procuring goods and services produced by oppressive regimes”.


I have not covered all the BDS activity in public bodies, but I hope that this demonstrates to the noble Lord that there is a considerable evidence base.

Separately, I note the points made by the noble Lord, Lord Mann, about student unions and the provision of kosher foods in universities. We are going to discuss that point. The noble Lord has tabled some interesting amendments on it in group 3.

[Lord Mann (Non-Afl)]

My point was not in relation to the amendment; it was in relation to the fact that a significant number of people in the Jewish community have said to me that they anticipate one of the key benefits of this Bill being that student unions will not be able to debate and pass BDS resolutions. My understanding of how the Bill is written and how it has been framed is that what the University of Essex student union has done, whereby it deemed its policy to be an educational tool rather than a procurement decision, explicitly would not be covered by the Bill. That is important, because the expectation is coming from multiple sources within the Jewish community that that is what would happen. Can the Minister clarify whether I am wrong on this, because my reading of the Bill suggests that I am right that—whether one calls it a good thing or a loophole—it would not be covered by the Bill?

[Baroness Neville-Rolfe (Con)]

The noble Lord is right—student unions are not covered, and I think that I made that clear at Second Reading. It is private activity. Clearly, what matters is the influence on public bodies, which is what we are discussing today.

To come back on the Occupied Palestinian Territories, obviously the Government recognise the risks associated with economic and financial activities in those settlements. We do not support boycotts of the Occupied Palestinian Territories. Such boycotts are inherently divisive and could lead inadvertently to negative effects on Palestinians as well as undermining the aim of this Bill, which is to ensure that the UK speaks with one voice internationally. That does not change existing government guidance on doing business in those territories. The Government do not recognise the settlements as part of Israel, as the noble Lord knows, and we have already moved to ban those responsible for violence in the West Bank from the UK—there have been some recent sanctions.

I have tried to answer the probing amendments. I hope that this provides noble Lords with clarification and a rationale for the scope of Clause 1, and I ask the noble Lord to withdraw his amendment.

[Lord Wallace of Saltaire (LD)]

My Lords, I am slightly better informed. We have many difficulties with this Bill. I must say that it would be much easier if it were simply a Bill about boycott of Israel and mainly about sanctions. It would be narrower, and we would know what we were talking about. But it is a Bill that is supposed to apply to every single foreign state in the world except for Ireland, which raises very large questions.

I disapprove strongly of the Rwandan Government’s support for M23 in the Congo civil war, and I disapprove very strongly of Myanmar’s behaviour towards the Rohingya, et cetera. Clause 1 is entitled “Disapproval of foreign state conduct prohibited”, which is itself a very uneasy label and not the sort of thing that ought to appear in legislation. I believed that I lived in a liberal democracy in which government’s reach was limited and free speech, as Conservative Peers are always telling us, is entrenched, and one is allowed to dissent. This appears to be extending the reach of government.

I appreciate that this is a DLUHC Bill that is aimed primarily at local authorities, although it is extended to include universities—and whether it includes student unions we will investigate further. As it happens, I had the current president of the Cambridge Students’ Union here last Wednesday, and I showed him a copy of the Bill—and he was convinced that it would apply to student unions; it is quite clear that some people would like it to do so.

There is a great deal more that we need to find out about all this. The closing down of public debate that the Bill implies is something that worries all of us a great deal. I am happy to withdraw my amendment for a moment, but we shall return to all these questions extensively as we move from one imprecise clause to another.

--- Later in debate ---

[Baroness Janke (LD)]

My Lords, very many points have been made about how the decision-maker is established. From the point of view of local government, in local councils there are very many ways of taking decisions that can be individual or corporate. The tiers of responsibility and the trails that decisions make throughout a large organisation would need to be explored if enforcement action was to be taken.

In addition, councillors, committees or even pension committees, as we heard earlier, are advised by experts and independent advisers, so it is not clear where the line of accountability is and who is responsible, who is to be identified for enforcement action. The public authority, as has been identified earlier, is the body that is talked about in relation to Clause 4, but it is not in the Bill and does not relate to any other part of decision-making. I add my plea for further clarification as to how the decision-maker is to be identified and how enforcement is to be pursued in light of that.

As far as pension funds are concerned, as a former member I know that expert advisers do take account of political situations in their evaluation of risk. Again, that may be intimidating for councillors or advisers and inhibit the quality of advice that is given.

[Baroness Neville-Rolfe (Con)]

My Lords, Amendment 7, tabled by the noble Lord, Lord Collins of Highbury, and Amendment 55, tabled by the noble Baroness, Lady Chapman, seek clarity on whether an individual is considered a decision-maker for the purposes of this Bill. It was helpful to hear the introduction from the noble Baroness and her wish for general elucidation. As she implied, it is an important part of the Bill’s provisions. I will try to confine my points mainly to decision-makers, which are the purpose of this group.

A public authority will generally delegate responsibility for decision-making on procurement and investment decisions to individuals within the public authority. The individuals who make the decision on behalf of the public authority will do so in accordance with the public authority’s internal policies and structures. To address the noble Baroness’s question on enforcement, even when an individual is making decisions or speaking on behalf of a public authority, the ban applies only to the public authority itself. There is no personal liability for the individual. Individuals will therefore not personally be responsible for any fines that may be imposed on public authorities for a breach of the ban in Clauses 1 or 4.

On the noble Baroness’s question on pensions—this is something I know about because I have served as a pension trustee, admittedly in the private sector—this is something we can come back to in more detail when we discuss Clause 12, but I will also look at the Local Government Association material that she referenced, which I am sure will be helpful and interesting.

My noble friend Lady Noakes made the point that there are some limited cases where individuals are the public authority in their own right. She asked for examples, so I suppose that examples would be UK Government Ministers, Ministers from devolved Administrations and police and crime commissioners. They could also be individuals such as mayors if they exercise public functions in their own right. Any individual who is a public authority in their own right is already subject to far-reaching and fundamental duties under the Human Rights Act 1998. They could be subject to court action if they restrict others’ human rights, and the duties in the Human Rights Act are much more wide-ranging than the prohibitions in this Bill. It would not be appropriate for these individuals to be pursuing policies that are not in line with the official foreign policy, which is, of course, set by the UK Government. To be clear, local authority councillors and university leaders are not public authorities in their own right.

Amendment 55 would require the Secretary of State to publish guidance to clarify in what circumstances an individual is a decision-maker before the Bill commences. We do not believe that it would be appropriate to publish guidance on this matter, as every public authority is structured differently and has different policies on how its internal decision-making process operates. As it happens, as the noble Baroness, Lady Janke, said, structures vary a lot, and that is the case.

To give the House an example, in the case of local authorities, they will have a scheme of delegations in place, with, for example, a commissioning board, which will indicate who takes procurement decisions. While the decision is made by the individuals on the board, they have been empowered to take those decisions via the scheme of delegations, and it is therefore the local authority that is the legal decision-maker in the context of the ban. This is made clear in Clause 2(1) of the Bill. Even when an individual is making decisions or speaking on behalf of a public authority, the ban applies only to the public authority itself and there is no personal liability for the individual. Therefore, individuals will not personally be responsible for any fines that may be imposed on public authorities for a breach of the ban. The concerns on this issue—

[Baroness Chapman of Darlington (Lab)]

What the Minister is saying is genuinely quite helpful, but I am just trying to apply this to my experience of the real world. If a councillor, say, were to make a statement or cause something to happen at a conference or something like that, the council would be held responsible as a public authority for the actions of that individual. The trouble with that, in a way, is that that would then influence the advice, guidance and training that is given to elected individuals, and then you would get the chilling effect that we are all so concerned about. Just to make sure, have I actually understood that correctly? Is that what the Minister was explaining to us?

[Baroness Neville-Rolfe (Con)]

I think that sounds right but, if I may, I will clarify if I got that wrong. To some extent, it is important in Committee that we actually understand what is happening. That is what, in the spirit of the noble Baroness’s question, I am trying to do. Even if a decision were delegated to individuals in a public authority, such as a commissioning board in a local authority, I think it is clear that the fine would be imposed on the public authority, not the individual.

I should briefly address why universities need to be in the scope of the legislation in response to my noble friend Lord Johnson, the noble Lord, Lord Hannay, and the noble Baroness, Lady Fox. We will come back to this on later amendments. It is an area of particular interest to a lot of noble Lords, not least because of the huge contributions people in this House make to the university sector.

However, the fact is that universities are a frequent target of the BDS movement, and some student unions —to come back to that point—have passed motions pressurising their universities to divest from Israeli companies. The Bill will ensure that universities cannot implement such policies in response to pressure from their student unions, as that would be divisive and could potentially contribute to rising anti-Semitism on university campuses, which is a concern.

[Baroness Chapman of Darlington (Lab)]

The Minister raised it—can she give us one example of where a university has ever succumbed to such pressure from its student union?

[Baroness Neville-Rolfe (Con)]

We will come back to this amendment; as the noble Baroness knows, this is an area of investigation for me, and I am trying to make sure that we have all the answers that we need and can provide the sorts of examples that she and I are used to exchanging in trying to move forward legislation in a constructive way.

On student unions, I will add a point that perhaps I should have made earlier. Student unions are usually charities and can undertake political activity only if it can be shown to support their charitable purposes, in line with Charity Commission guidance. Any questions as to whether political activity was appropriate would be considered in line with the Charity Commission’s normal processes. However, I confirm what I said earlier, that the Bill is narrow, applying to public bodies and, obviously, to investment and procurement. I hope that that addresses the concerns of noble Lords.

[Lord Davies of Brixton (Lab)]

The Minister used the word “pressurised”. Did she do so advisedly—“pressurised” as opposed to “called on” or “suggested”? Is “pressurised” defined in the Bill?

[Baroness Neville-Rolfe (Con)]

I think I used the word “pressure”. Certainly, I was reading “pressure”, but perhaps I blurred the wording and said “pressurised”. I could equally have used “influenced” or some other word. I was trying to explain what we were getting at on the education side of things.

I have a couple of examples of student union pressure, which I mentioned earlier. Warwick student union held an all-student vote in 2020 to pressure the University of Warwick to fully divest from all unethical industries and release all investments. That included divesting from companies in support of a boycott of Israel, and divesting from international companies that are complicit in violations of Palestinian rights. There was also the example of Sussex University, which I mentioned a little earlier.

[Baroness Chapman of Darlington (Lab)]

The thing is, though, as we are teasing out, is it not right that the Bill would not stop Warwick University student union from passing a motion in that regard? It would stop the university from acting on it, but no university has ever acted on these things. That is why we are all scratching our heads a little about what we are going to get from the Bill. It was a manifesto commitment—we understand that—but it is not our fault if the Government cannot turn their manifesto commitment into a usable piece of legislation.

--- Later in debate ---

[Lord Johnson of Marylebone (Con)]

My Lords, my noble friend the Minister was asking whether I was reassured. I appreciate that that was largely a rhetorical question, but I have to say I am not yet totally reassured. But I would be if she were able to furnish us with examples of higher education institutions succumbing to pressure from student unions to undertake BDS-style actions in relation to their investment and procurement decisions. That is really important for us as we make progress with the Bill.

[Baroness Neville-Rolfe (Con)]

I thank all noble Lords, including the noble Baroness, Lady Deech, for their interventions. I observe that, obviously, the Bill will make this boycotting activity by student unions almost pointless. But I say to the speakers that this is a group about decision-makers, and we are ranging widely into the debate about the exact involvement of universities, although that has been helpful in informing the next stage of this Committee.

Returning to decision-makers, perhaps I could just say in conclusion that I trust that this addresses some of the concerns of noble Lords and the noble Baroness. My officials will provide further clarification in the Bill’s Explanatory Notes, as requested by the noble Lord, Lord Wallace of Saltaire. I hope, in the light of the explanations I have given, the noble Baroness will feel able to withdraw her amendment.

[Baroness Chapman of Darlington (Lab)]

My Lords, that was probably a bit more helpful than I had anticipated, in that it fleshed out some of our really quite fundamental concerns. The noble Baroness, Lady Deech, made a very powerful case for why action is needed to prevent some of the antagonism and fear, and those activities that have happened on campuses and elsewhere that we all want to prevent. But this Bill does not do it: it deals only with boycott and divestment decisions. It probably brings into scope people and decision-makers that the Government did not have in mind.

The idea that people who want to campaign on these issues will suddenly stop doing so as a consequence of the legislation is fanciful because, as the noble Lord, Lord Mann, said in his Second Reading speech, they will just change the target from public authorities to others. It will not deal with some of the unpleasantness and the atmosphere on campus. That will not be assisted in any way, and the way the Bill is drafted might actually make things worse. It will not deal with campaigns to prevent certain events or not to have certain speakers. Those things are completely outside the scope of the Bill. We are focusing on universities to make this point, but similar things could be said about local government.

I am very happy to withdraw my amendment, but I think we are going to end up with this discussion on most of the groups, because the Bill is so unsatisfactory and does not actually fulfil the aims that the Government say they wish to achieve. I beg leave to withdraw my amendment.

--- Later in debate ---

[Lord Collins of Highbury (Lab)]

My Lords, I too associate myself with the comments of the noble Lord, Lord Pickles, because the noble Lord, Lord Mann, has done incredibly important work in tackling anti-Semitism and ensuring that we remove it from all of our civil life. I pay tribute to him.

I will not delay the House too long, but the important thing with these two amendments is expectations. This is the problem with the Bill. While I want to avoid going back, we have made a plea—my noble friend Lady Chapman made it at Second Reading—that we want to co-operate with the Government to implement their manifesto commitment. I am afraid that this Bill goes well beyond that and brings into question other issues.

The noble Lord, Lord Mann, is absolutely right to put these sorts of amendments down, because they address the concerns of the community. People often think when we are talking about this Bill that we are talking about consumer boycotts and consumer choice. No, we are not. It is about decisions over investment and procurement, but those decisions can involve the sorts of things that the noble Lord, Lord Mann, is talking about—and we heard an example from the noble Lord just now.

How we manage expectations is really important. I suspect that, when we go into other groups, we will hear lots of concerns about issues that go well beyond the scope of the Bill. So I hope the Minister understands why the noble Lord, Lord Mann, has put these amendments in. They are to probe, but also to say that there is a problem, there is an issue and the Bill does not solve it.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank the noble Lord, Lord Mann, for drawing the House’s attention to two important issues with his Amendments 8 and 9. Like my noble friend Lord Pickles, who it is a real pleasure to welcome to our debate, my noble friend Lord Wolfson of Tredegar and the noble Lord, Lord Collins of Highbury, I am really grateful for all the work that the noble Lord, Lord Mann, has done.

My noble friend Lord Pickles and I worked together in my retail days, when he was a leading influence in local government and I worked to have kosher and halal food in many of the Tescos that were spreading across the country. So there were lots of conversations over food. A focus on community concerns is what much of the probing has been about this evening—but that is for another group.

I remain of the view that we need to apply this Bill to universities as we are doing, and I am committed to having a comprehensive debate and discussion on the impact of the Bill on universities at the appropriate moment later in Committee.

As we have heard, the two amendments in this group would add two stipulations to Clause 1. Amendment 8 intends to ensure that the prohibition applies to a decision made by a university to enter into a commercial partnership with another university or research university in a foreign state. The prohibition in the Bill already covers higher education providers in their public functions, including when their procurement and investment decisions form part of a research collaboration. Decisions relating to a commercial partnership are, however, likely to constitute a private function—for example, a decision relating to a research partnership to develop a new product funded by a pharmaceutical company. The ban applies only to public authorities’ public functions, as we have heard, and private decisions are rightly out of scope of the Bill. I note what the noble Lord, Lord Mann, says, but it would be inappropriate to apply the ban to private functions, and it would take the Bill beyond the manifesto commitment.

We have been clear in the Explanatory Notes that Clause 1 is not intended to prevent a higher education provider deciding to terminate a collaboration with a foreign university on the grounds of academic freedom, if they deem it necessary in line with their statutory duties in Part A1 of the Higher Education and Research Act 2017 or other legislation. The Bill is about ensuring that universities and higher education institutions do not have a corporate view on a particular matter of foreign policy when making their investment and procurement decisions. It is right that the Bill does not stray into decisions that could threaten academic freedom, as helpfully highlighted by the noble Lord, Lord Stevens of Birmingham, who spoke at Second Reading. I am sympathetic to the points that the noble Lord, Lord Mann, is making, and the Government do not support academic boycotts, but this Bill rightly does not interfere with academic freedom or private activity.

I turn to the points made by the noble Lord, Lord Mann, about the Jewish community’s support for this Bill. The Jewish community in the UK is widely supportive of the Bill as drafted. Russell Langer, head of policy at the Jewish Leadership Council, provided the following statement in support of the Bill’s restriction on universities’ economic activities:

“Higher education institutions continue to come under pressure to adopt BDS policies ... This legislation will be a valuable tool in assisting our higher education in rejecting this effort”.


The Bill will sit alongside other measures that the Government are taking to protect academic freedom. The Higher Education (Freedom of Speech) Act 2023 will ensure that freedom of speech is protected and promoted within higher education in England, and it will strengthen existing freedom of speech duties and directly address gaps in the existing law. Without action to counter attempts to discourage or even silence unpopular views, intellectual life on campus for staff and students may be unfairly narrowed or diminished, which is why there was a commitment in the 2019 manifesto to strengthen this.

[Lord Wallace of Saltaire (LD)]

The Minister has just said that we need legislation to silence unpopular views. I have to say that, as a liberal, I find that one of the most illiberal things that we could consider doing. Did she mis-speak?

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

I am not sure that I said exactly that. However, there obviously is a problem in campuses and elsewhere with BDS, and that is what this Bill is about. I shall move on to Amendment 9.

[Baroness Deech (CB)]

If I can help the Minister, what we need to silence is hate speech. The law is reasonably clear. It is not wholly clear—there is a blur between unpopular views and hate speech—but it has been settled for a long time that hate speech is not allowed. My test for this is when you hear something and it uses the word “Zionist” or “Jew”, if you remove that word and replace it with, let us say, “black” or “Asian”, it is then usually pretty clear that what you are dealing with is hate speech or racist speech.

[Baroness Neville-Rolfe (Con)]

I thank the noble Baroness for her intervention. These are difficult issues.

I turn briefly to Amendment 9, which would ensure that the prohibition in Clause 1 applied to decisions relating to the procurement of food prepared in line with religious practices, such as kosher and halal foods. The ban established by the Bill applies to all procurement decisions, including the procurement of food where this is part of a public function. Therefore, if a public authority made a decision not to procure kosher food and that decision was influenced by moral or political disapproval of the conduct of the State of Israel, the Bill would already prohibit this. However, I reassure noble Lords that nothing in the Bill would stop a public authority providing food that accommodated the religious beliefs of its employees or its service users. For example, it would not stop a public authority specifying in a tender that it was procuring halal products. For these reasons, I ask the noble Lord to withdraw his amendment.

[Lord Mann (Non-Afl)]

I beg leave to withdraw my amendment.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Committee stage
Wednesday 17th April 2024 Lords Chamber

[Baroness Chapman of Darlington (Lab)]

My Lords, I am grateful to the noble Lord, Lord Wallace, and the noble Baroness, Lady Noakes, for their amendments in this group. They are incredibly helpful. What we are trying to do here, as the noble Baroness, Lady Noakes, has just said, is elicit some certainty from the Government on behalf of those organisations which might find themselves drawn into the scope of this Bill. Even though they may not consider themselves to be public bodies ordinarily, they might find that they are when it comes to this Bill. We will come later to an argument about whether universities should be treated as public bodies and we feel, as we said at earlier stages, they should clearly not be. But that is not the only area where we feel that the Government have not thought sufficiently about what they are trying to do.

Amendment 11 from the noble Baroness, Lady Noakes, would, as she explained, apply the definition in the Freedom of Information Act. That would settle this to a large extent, in that we are clear about who is and who is not subject to that Act. It would be interesting to hear whether the Government are minded to welcome that suggestion because, from what the Minister has said on previous occasions, all the instances that she has referred to as justifying the need for the Bill would probably be covered. I am not sure why the Government do not just welcome that, to be honest; it does not answer all of our problems, but it would go some way towards that.

The introductory speech of the noble Lord, Lord Wallace, was incredibly helpful and his amendments likewise. He concluded by saying he suspects that the Bill is actually performative in nature and worries that the operability is not at the forefront of anybody’s mind in government. I have no idea how true that is, but I share his concern that it is the job of this House to make sure that we do not pass legislation that is unworkable and just causes confusion.

Our Amendment 14 is probing and I accept what the noble Baroness, Lady Noakes, had to say about it. But we are just trying various ways in this group—and in the next, too—to work out which organisations will be subject to these new rules. The example that has been helpfully provided to me by Universities UK was the one that led to the tabling of our Amendment 14.

If the Government get their way and universities are to be treated as public bodies for the purposes of this Bill, although I very much hope not for any other purpose, their activities that we could argue are clearly outside their publicly funded responsibilities—those conducted, perhaps, with private money or are contracted to private companies—would in no way be subject to the rules within the Bill. There is a reference that makes this clear in the Explanatory Notes, but the amendment that we have suggested would put that explanation into the Bill. As I said, it is to probe exactly what the situation would be because, at the moment, universities are not clear about that and it is important that we give them that certainty.

An example was suggested to me by Universities UK. It is hypothetical but not so outlandish that this situation is not happening very frequently. I declare an interest as chancellor of Teesside University. Here is the hypothetical example: university A is considering a proposal to set up a transnational education partnership in country X. This could involve a partnership with a commercial or state entity in country X and the university board must consider a range of proposals. According to the Higher Education Code of Governance, governing bodies should

“conduct their affairs in an open and transparent manner”.

It is a fundamental duty of university governing bodies to safeguard and promote the reputation of the institution. As the new partnership would involve a significant investment and carry both financial and reputational risks, the board of university A is therefore asked to take a decision on the proposals.

To support its deliberations, the board would receive a paper covering the following: the potential financial exposure and opportunity of each proposal; underlying social, demographic and economic data that underpins a market assessment; due diligence on potential partners, including reputational factors; and a summary of ethical and reputational concerns relating to country X. All aspects of the paper would be deliberated by the board. Following an extensive discussion of the financial and reputational impacts of the proposals, the board decides not to proceed with the partnership opportunity because, on balance, the risks are deemed to outweigh the opportunity.

Can the Minister explain whether, in this example, the transnational educational partnership described constitutes a private or public activity of a university? Would the fact that the board discussion included reference to reputational and ethical concerns of direct relevance to a higher education institution mean that members of the board could be subject to action under the provisions of the Bill?

How can boards fulfil their duty to safeguard and promote the reputation of their institution if they are not able to openly discuss and consider material facts that could impact on said reputation without fear of legal action, even if those considerations are not the sole basis for the eventual decision? How can boards fulfil their duty to conduct affairs in an open and transparent manner if the very fact of discussing issues of demonstrable and material relevance would be actionable under the provisions of the Bill?

I raise this example to tease out some of the grey areas that we might be forcing universities to consider and because I am worried about the chilling effect this may lead to. I do not think there is a situation in which a university would not consider the reputational impact of a partnership. But I can conceive of a situation where that consideration would not be as open and as widely shared as we have come to expect, in the way that we would like things to be done in this country.

In this group, we would like to understand the Minister’s response to the amendment from the noble Baroness, Lady Noakes, in particular, on whether there might be any other way of making clear who is subject to this. In relation to my Amendment 14, I would like to understand exactly how this will work for organisations—not just universities, but others as well—particularly in relation to the example I raised.

[The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)]

My Lords, I am grateful for the thoughtful contributions from across the Committee. On the first day of Committee, which also touched on the scope of this Bill, we heard from the noble Lords, Lord Collins and Lord Wallace, the noble Baroness, Lady Fox, and my noble friends Lady Noakes and Lord Johnson. We discussed the Bill’s application to hybrid public authorities. Today, we have heard in slightly different terms from the noble Lord, Lord Wallace, my noble friend Lady Noakes and, of course, from the noble Baroness, Lady Chapman. I will try and come back on her essay question if I can.

Obviously, we have carefully considered the points raised in these debates. I would like to expand on our view of the scope in relation to Amendments 10, 11, 12, 13 and 14. As noble Lords have said, the Bill will apply to public authorities, as defined in Section 6 of the Human Rights Act 1998. I would like to explain, in response to the concerns of the noble Lord, Lord Wallace of Saltaire, that “public body” is a general term with no single legal definition. The Bill’s Short Title provides a general indication of the subject matter of the Bill, and it is not unusual for the Short Title to use different terminology from the Bill’s substantive provisions.

[Lord Wallace of Saltaire (LD)]

My Lords, I apologise for interrupting. The Minister will be well aware that there is a particular use of the term “public body” by the Office for National Statistics, which means that debt incurred by a public body is counted as part of the national debt. That means that whether or not some of these hybrid public authorities are defined as public bodies matters a great deal to their financial planning. Again, the university sector is particularly concerned about this.

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

I thank the noble Lord for raising that point again. It has been raised before and I am aware of it. We are talking about quite marginal sums here, so it will not be definitive, but I am sure we will come back to that point.

Perhaps I should explain that we have used the HRA definition because it has three important advantages. First, it is one that has been on the UK statute book for over 25 years, as has been explained, and places public authorities under important fundamental obligations that they have to observe. Organisations should also already know how it applies to them. Secondly, over those 25 years, the courts have further clarified its scope and identified a number of relevant factors. These include, but are not limited to, the body receiving a significant amount of public funding, the body carrying out acts in exercise of statutory powers and the body providing a public service. Thirdly, the definition ensures that private activity remains out of scope of the Bill—private activity that is rightly protected by convention rights, including freedom of speech.

--- Later in debate ---

[Baroness Chapman of Darlington (Lab)]

I am grateful to the Minister, but I am completely unclear about what a public body is after listening to that. Could she explain what a public function is? That might help us.

[Baroness Neville-Rolfe (Con)]

That is a good point and a good question. The noble Baroness also gave a good example. I suggest that I take away the distinction regarding the public function and have a look at it, and that I come back on the long example she raised, which she said had been given to her by Universities UK, on 7 May when we are due to debate the university amendment in Committee.

[Baroness Chapman of Darlington (Lab)]

I sort of accept that, but while my example referred to universities we could equally apply it to other organisations as well. I would not want to see that consideration narrowed just to the issue of universities.

[Baroness Neville-Rolfe (Con)]

I agree with the noble Baroness; that is an entirely fair point. We agree that the Bill is complex when it comes to understanding. I want to make sure that, when I answer questions on things such as public functions, I am giving good information that is thought through and thoughtful. I have tried to explain today why we are using the Human Rights Act. That has advantages, which is why the Government have gone down that road.

I should respond to the point about cultural institutions that the noble Lord, Lord Wallace, raised. Some of them are in scope of the Bill in their public functions only, and I set out earlier a number of factors that courts would consider in deciding whether an act was a public act. The noble Lord also pointed out that the Bill contains the power to exclude bodies in its scope from the ban via regulations. The Government do not currently foresee the need to exclude such bodies, but this power will allow the Bill to evolve in line with government policy.

For all these reasons, I have tried to explain why we have presented the Bill in the way that we have. There is a lot of comfort to be taken from using the Human Rights Act, but I look forward to returning to some of the questions that have been asked. In the meantime, I ask noble Lords not to press their amendments.

[Baroness Blackstone (Lab)]

If I may intervene, this definition debate is like walking through a giant sticky pudding. Most Members of the Committee are utterly confused about exactly what public bodies and public authorities are, and about which institutions will be in the scope of the Bill and which will not.

I shall raise a specific example. Could the Minister tell the House about housing associations? They undertake many public functions, which is another term that the Minister introduced but has not been properly defined. They deliver social housing, for example. They do so in partnership with local authorities, often managing the social housing that is owned by local authorities. Will they be in scope of the Bill or not?

[Baroness Neville-Rolfe (Con)]

The answer I must give in the short term is that it depends a lot on the courts. I will look at housing associations; I know they have come up in other Bills that we have discussed, including how they are treated in government finance. The point about using the Human Rights Act definition is that you get a 25-year history of interpretation.

[Baroness Randerson (LD)]

My Lords, the Minister referred to the issues of public funding associated with universities and the national debt, and how that is counted. She said that these were marginal amounts of money. The UK university sector is worth £130 billion a year to the economy and employs three-quarters of a million people. Is that truly the definition of marginal? I declare an interest as chancellor of Cardiff University. Secondly, when we are looking at cultural organisations, does lottery money count as public or private money?

[Baroness Neville-Rolfe (Con)]

The honest answer is that I do not know about the lottery, but I will find out for the noble Baroness and write to her. On universities, of course she is right: very substantial sums of money, rightly, are involved in the education of our children. What I was explaining was that, at the margin of this activity—involving procurement and investment—the sum is relatively small compared with all that is done by universities.

[Lord Stevens of Birmingham (CB)]

May I offer a constructive suggestion on the clarity that might be adduced between now and further stages? Picking up on the question of the noble Baroness, Lady Blackstone, as I understand it, in 2003 the first case before the court to answer the question was Poplar housing association, where it was deemed that Poplar was a functional public authority under the Human Rights Act. That takes us to the useful report that was referred to by the noble Baroness, Lady Noakes, from the Lords and Commons Joint Committee on Human Rights back in 2003-04, entitled The Meaning of Public Authority under the Human Rights Act, which gets to the very matter we have been discussing. Obviously, jurisprudence has developed substantially since then. If the Minister could set out in writing how the Government regard the situation as having evolved since this very clear statement of the answer to the question we are struggling with this afternoon, that would perhaps nail the matter.

[Lord Boateng (Lab)]

The Minister has been enormously forbearing and we are very grateful for that. I wonder whether she could help us in this regard in relation to cultural bodies—here I must declare an interest, as an independent non-executive director of the Royal Philharmonic Orchestra. What would be the position of an orchestra that received some funding—by no means the majority of its funding—from the Arts Council, and which determined that, in the aftermath of an invasion of a sovereign nation by another sovereign nation, it no longer wanted to perform supportively of, say, the Bolshoi Ballet? What would be the position of such an orchestra, or of a board, that made that decision because it saw a real reputational risk, in the aftermath of the invasion of a sovereign country, of appearing in support of the national ballet company of the invading nation?

[Baroness Neville-Rolfe (Con)]

I understand the question. Of course, we now have government sanctions against Russia, so the question is wider. The suggestion made by the noble Lord, Lord Stevens, is a good one, which would perhaps help us to move forward. I have already said that I will look carefully at the questions raised by the noble Baroness, Lady Chapman. The example of the noble Lord, Lord Boateng, is of a slightly different kind, asking rather the same question. Perhaps I can come back on that at the same time.

[Lord Hain (Lab)]

May I also ask a question? I am very grateful to the Minister, who has indeed been generous in responding, even if she has been unable to offer the Committee further clarification. Virtually all training in this country is privately provided, by private organisations, but publicly funded. Where do they fit into all this? They receive public money—from the DWP, say. I remember, as the former Secretary of State, visiting a lot of private providers. Where do they fit in? Do they come under the contractual relationship to which the Minister referred, or are they caught by the Bill?

[Baroness Neville-Rolfe (Con)]

It depends, and it also depends on case law under the Human Rights Act, which I have undertaken to look at and come back to noble Lords.

[Lord Wallace of Saltaire (LD)]

My Lords, I cannot resist suggesting that one definition of a “public function” is somewhere you are served warm white wine and canapés. That is a suggestion of how loose some of these terms can be.

The concern that a lot of us have about the Bill is that we are not entirely confident that the Government have thought through its full implications. The manifesto commitment was specific to boycotts against Israel and was concerned particularly with local authorities and universities. But we have a Bill here with a much wider set of definitions and a universal set of foreign states to which it applies, which raises a much larger number of questions. We also have a whole succession of loose definitions, which the DLUHC memorandum to the Delegated Powers Committee says, in effect, that we should not worry too much about, as we will do this all with regulations. I hope that the noble Lord, Lord Hodgson, would think that it is not necessarily always a good idea to leave everything to regulations. We are asking for greater clarity, certainty and, above all, precision, and a more limited potential scope for the Bill.

The ball is in the Government’s court, and I very much hope that this will be one of those occasions in which, between Committee and Report, the Government will come up with amendments which respond to comments that have been made constructively by us. The Minister will recall a government Bill in the previous Session for which the Government produced 340 amendments between one stage and another. We are not asking for quite that many here; we are just asking for some that begin to provide much greater precision. On that basis, I will happily withdraw my amendment, and look forward to some constructive discussions between Committee and Report.

[Baroness Neville-Rolfe (Con)]

Before the noble Lord sits down, I will repeat the point that the Bill applies only to investment and procurement decisions, as everyone understands. We are trying to find a way forward on a manifesto commitment to ban public bodies from imposing their own direct or indirect boycotts or disinvestment or sanction campaigns against foreign countries. Obviously, we need to discuss a little further how we deal with that, but I reiterate the point that I made about the use of the Human Rights Act, because we are trying to be helpful by calling on existing case law. The concern that I had about the amendments we are discussing today is that they might extend the Bill in a way that was not exactly where the Committee seemed to be coming from. I look forward to further discussions on this key matter.

Amendment 10 withdrawn.

--- Later in debate ---

[Lord Stevens of Birmingham (CB)]

I take the point that the noble Baroness, Lady Blackstone, just made in respect of schools, but I also agree with the point the noble Baroness, Lady Noakes, made about the jurisprudence that has arisen, which has clarified this for a number of institutions, including, I think the right reverend Prelate the Bishop of Manchester will find, the Church of England. In fact, I believe the first case to test whether a body in the Church was indeed a public authority was Aston Cantlow Parochial Church Council, which was trying to exact a chancel repair charge. In the Appellate Committee of the House of Lords at the time, the noble and learned Lord, Lord Hope, deemed that the parochial council was not a public authority. Many details have been laid out by the courts quite clearly over the years, but if the Government could adduce that on to a single sheet of paper in the way that has been described, it would be very helpful.

[Baroness Neville-Rolfe (Con)]

My Lords, as I set out in my response to the previous group, the Government chose to apply the ban to public authorities as defined by Section 6 of the Human Rights Act 1998. It is a great advantage that your Lordships, perhaps in contrast to the other place, scrutinise Bills in this way. I cannot accept that it is a sloppy Bill—it is a good Bill—but I think that concerns have been overstated. My noble friend Lady Noakes just explained why, very eloquently. We need clarity. Most bodies know whether or not they are covered.

There is another good reason for using the Human Rights Act definition—obviously, I am happy to look further at its implications, as I have said—which is that the Government intended to apply the Bill to a broad range of bodies when they are exercising public functions. This was to ensure a consistent approach to foreign policy across the UK’s public institutions, to stop public bodies legitimising divisive campaigns, which can undermine community cohesion, and to allow public bodies to focus on their core purpose when engaging in procurement and investment. That was the intention of the manifesto commitment that I mentioned in the previous group.

These amendments seek, rightly, to probe the scope of the Bill’s definition of public authorities, but they also probe the need for the power to make exceptions to the ban. I will try to address each in turn.

I am very glad that the right reverend Prelate the Bishop of Manchester has joined the debate. The Church of England would be in the Bill’s scope only to the extent that it exercises public functions. We have heard a little about the interpretation of that in the courts.

Before I address the specific amendments, I remind the Committee that the Bill will not create any new criminal offences. That is a very important point. I also take this opportunity to address the point raised by the noble Lord, Lord Boateng, and the noble Baroness, Lady Chapman, which was picked up by my noble friend Lord Deben, on orchestras. Orchestras are very unlikely to be regarded as public authorities. Moreover, withdrawing from an event is unlikely to be regarded as a procurement decision for the purposes of our Bill. The definition of a procurement decision does not include contracts where it is the public authority providing the service.

I can also reassure the noble Baroness who raised the issue that defence contracts are also exempt from the Bill. In addition, for contracts in scope, the Bill already contains an exception to the ban for national security considerations. In practice, if a case is reported to an enforcement authority it will look at whether the public authority had regard to any of the exemptions to the Bill—for example, the national security exemptions —during the decision-making process. Evidence of this might include if the public authority shows that it was following guidance from the UK Government, or became aware, for example, that a supplier was engaged in espionage.

Amendments 26 and 23 probe whether charitable organisations would come under the Bill’s scope. Charities would be captured by the ban only if they were performing public functions. It is the Government’s understanding that most charities will not be covered by the Bill. I hope that provides reassurance to noble Lords.

[Lord Collins of Highbury (Lab)]

I am sorry to interrupt, but I was just checking the relevant parts of the Bill relating to enforcement. The Minister said that no new criminal actions arise from the Bill. What we do have is the ability of the Secretary of State to have enforcement powers that include monetary penalties. If people refuse to pay the monetary penalties, what would that result in?

[Baroness Neville-Rolfe (Con)]

Perhaps I might continue on the points raised in the debate and come back to that point. It is a very reasonable question but I am not going to answer it without advice. However, there are no criminal sanctions in this Bill, which there often are in the Bills we consider in this House.

There may be a small number of cases where charities are delivering public functions; they would therefore be captured in respect of those functions. However, it is important to note that it does not mean that a charity is a public authority just because it is in receipt of public funding.

The Bill will not apply to charities’ private functions. For example, for universities, decisions that are part and parcel of delivering higher education would be public functions so they would be in scope of the ban. If a charity did have public functions in scope of the ban, it would apply only to investment and procurement decisions made within the public functions. That is a point that I need to emphasise. Therefore, the ban would not restrict how such bodies decide, for example, to distribute humanitarian aid, which was the subject of the earlier debate.

[Lord Boateng (Lab)]

I think the Minister, or those who advise her, has misunderstood the point I raised in relation to the orchestra. The orchestra is putting on a concert version of “The Rite of Spring” as part of a Stravinsky festival. That festival is being held in a number of cities throughout the world. It is booked to appear at the new opera house in Dubai. It puts out a tender for ballet companies to provide the dance section of “The Rite of Spring” for this concert version. It specifically precludes in its procurement—so perhaps those who advise the Minister can reflect on this—the national ballet company of a country that has recently invaded a sovereign nation because it does not wish reputationally to be linked with that national ballet company. That is quite clearly a procurement. Is the Minister saying that that would not be covered by the Act and that the fact that the orchestra concerned receives a proportion of its funding from the public purse does not make it fall within the ambit of the Act? It is to that question specifically that an answer would be helpful. If she cannot give that answer, it demonstrates very clearly the concern about ambiguity that all contributors to this debate have articulated.

[Lord Boateng (Lab)]

That is what we want an answer to: is it a public authority for that purpose because it receives public funding?

[Baroness Neville-Rolfe (Con)]

I am glad that we have focused on an individual example because, in my experience, this always helps us to clarify our own thinking. I think that, if the noble Lord, Lord Boateng, will allow me, I will take the orchestra example away, along with the example given by the noble Baroness, Lady Chapman, work out the right approach and get back to noble Lords, perhaps in discussions outside the Chamber.

We all want the same thing: to make sure that the Bill applies to the right bodies in the right way. That is what we are seeking to do, which is why we started with human rights legislation, which is often a popular start, for good reasons, to legislation. However, we have, as we do, scrutinised the detail of legislation today and have come up with some extremely good questions. It behoves us to go away. I am sure we can find good answers and use them to improve the Bill, which is, as I said when I introduced the Bill, what we are determined to do to get a good Bill that leaves this House in the right place and delivers on our manifesto commitment.

I turn now to Amendment 25, which seeks to probe whether a national governing body of sport that is in receipt of public funding would be in scope of the Bill. It raises some of the same questions and issues that we are going to consider. It is possible that a governing body of sport could be in scope of the Bill. If a sporting body is considered to be a public body under the Human Rights Act, on the basis that it exercises some public functions, the ban would apply only to the public functions exercised by that body, but a sporting body being in receipt of public funding would not in itself be enough for it to be considered a public authority. These bodies play a significant public role.

[Baroness Chapman of Darlington (Lab)]

We have got the public function thing again, which the Minister has referred to frequently. She has clarified that public funding is part of what will determine whether the sporting governing body is a public body, but she said that would be relevant only in the conduct of public functions. I am not clear on this, given that at the end of the previous group we were promised a response on what a public function is. I think the Minister said that she would follow up in writing, but she is relying on that term frequently in her response to this group of amendments, which I do not think is helpful, unless she can say something at this stage about what she considers a public function to be.

[Baroness Neville-Rolfe (Con)]

The noble Baroness is right that we need to use the term “public function” with care and to be entirely clear what it means, but the receipt of public funding is another legitimate issue that we need to understand—and understand the scale as well.

[Baroness Chapman of Darlington (Lab)]

As an example, if a young people’s badminton team were to be taking a tour of south-east Asia and felt it did not want to take part in events in certain regions of China and came under some pressure on this from parents or other groups, how would that be? You could say that enabling young people to engage in sport is perhaps a public function. I do not know. How would that be considered?

[Baroness Neville-Rolfe (Con)]

That example would not be procurement or investment, so it would be outside the scope of the Bill. However, the noble Baroness has raised the point. Sporting bodies can be within scope, as I explained, in procurement and investment decisions. The reason for this is that these bodies play a significant role in public life and it would send a very unhelpful signal if we were to single out governing bodies of sport as an exception to the Bill.

[Baroness Chapman of Darlington (Lab)]

I am sorry to keep on about this, but there is then a need to define procurement. In the example that I am, perhaps tenuously, relying on, there would surely be procurement of transport services, accommodation services, catering services and venues.

[Baroness Neville-Rolfe (Con)]

It seems to me that the issue here is boycotting a sporting event, and that is not a procurement or investment decision—but I have already undertaken to look carefully at these individual examples, because we all want to understand exactly what we are talking about and to come to the right outcome.

Amendment 24 would carve out community interest companies. While it is not inconceivable that a community interest company might perform a public function, neither the purpose nor the structure of a community interest company naturally lends itself to that. It is not, by and large, what the Bill is designed for.

Amendment 22 seeks to probe whether schools and early years providers, such as nurseries, are in scope of the Bill. I can confirm that all publicly funded schools will be captured by the ban when they are performing public functions, and some early years providers will also be public authorities on that definition. Other early years providers may be captured to the extent that they are performing a public function. However, I will take noble Lords’ concerns on that issue away, because I think it comes into the same category as the other two examples we will be looking at.

Privately funded independent schools—and I think this will probably apply to private universities—will be captured to the extent that they perform a public function. However, they are unlikely to perform functions of a public nature in scenarios where they are captured as hybrid public authorities, which we discussed on the previous group. The ban will ensure that publicly funded schools remain shared spaces for all, and the Bill will ensure that schools and early years providers can remain focused on their core duties, rather than being distracted by divisive campaigns promoted by BDS and others.

[Lord Deben (Con)]

If a Church of England or Catholic school says it will not buy from a country that is persecuting Christians, that is concentrating on its core responsibility. It is not avoiding it; it is what it is there for, which is to uphold the faith. Are we really going to dictate whether or not it should make that decision?

[Lord Roborough (Con)]

My Lords, the Minister has an advisory speaking time of 20 minutes. May I respectfully suggest that we leave any further interventions until the end to allow the Minister to answer as many of the existing questions as possible?

[Baroness Neville-Rolfe (Con)]

I have already said that I am trying to answer the many questions noble Lords have asked. There have been a great many interventions on me and I have been very patient. I have also made some undertakings to try to clarify some of these points, including childcare, which would cover the schools that my noble friend Lord Deben mentioned.

Perhaps I could turn to Amendment 54, which requires

“the Secretary of State to provide a comprehensive list”,

of the bodies in scope

“before the provisions in Clause 1 can be brought into force”.

The Government are not able to provide a comprehensive list of bodies captured by the Human Rights Act definition. However, I have tried to be clear on the categories of bodies that includes. To repeat, these include: central government agencies and non-departmental public bodies; UK Government Ministers and devolved Ministers; local authorities; administering authorities of local government pension schemes; universities and higher education providers with public functions; publicly funded schools; and some museums and galleries in receipt of significant public funding.

As with any definition, there will be further cases at the margins where it is impossible to generalise without the full facts of a case. That, of course, is where the courts come in. Legislation often uses general definitions—for example, the Human Rights Act from which we have taken the scope or the scope of bodies covered by obligations under public procurement legislation.

Finally, I turn to Amendment 14A. This would remove from the Bill the powers granted to the Secretary of State to amend the schedule to make exceptions to the ban for certain bodies, functions and types of considerations, and to amend or remove regulations made under these powers. I understand concerns about the use of subordinate legislation—the noble Lord knows that—and we are lucky that we have such a good committee to supervise its use. However, these powers are necessary to ensure that the ban can evolve over time and operate as intended, for example in response to emerging global events.

I assure the noble Baroness, Lady Chapman, that the FCDO is fully supportive of this legislation, and all regulations made under this Bill would follow the normal procedure of cross-governmental clearance and, of course, be approved by the Foreign Secretary. In the event that in future the ban has unintended consequences for a certain public authority, it is right for the Secretary of State to have the power to exempt that body, or a function of the body, from the ban via statutory instrument—I think today’s debate shows that that is necessary—and this would be subject to affirmative resolution by both Houses.

These powers will also allow the Secretary of State to exempt certain types of considerations from the ban. For example, Ministers may decide to exempt a narrow type of consideration to ensure the ban can evolve in line with government policy. The powers future-proof the legislation to ensure the ban can continue to operate effectively and mitigate against any unforeseen circumstances.

Before I close, I should perhaps address the point made by the noble Lord, Lord Deben, on the environment. The ban applies only to decisions that target a particular country or territory. For example, environmental campaigns, including ones against fossil fuels that are not country specific, are outside the scope of this Bill. I also reassure my noble friend that the power in Clause 3 cannot be used to remove any exception to the ban in the Bill as passed by Parliament. There is a schedule the noble Lord can look at, which includes environmental misconduct, which we are coming on to discuss.

I hope, finally, to address the point raised by the noble Lord, Lord Davies of Brixton, with regard to why there is a separate clause in the Bill for local government pension schemes. The administering authorities for local government pension schemes are public authorities under Section 6 of the Human Rights Act. Capturing administering authorities of LGPS in a bespoke provision means that the Pensions Regulator can use its existing powers and procedures to enforce the BDS ban for the administering authorities of LGPS. That avoids the Pensions Regulator setting up a separate enforcement system for the Bill. I am happy to have a discussion with him; we often discuss pensions issues which are of limited interest sometimes to the whole House.

I hope that my response to this group of amendments —importantly, alongside the undertakings I gave in response to my previous group which we expanded a little to bring in telling examples—will help the Committee to understand why we have chosen the Human Rights Act definition and I ask the noble Lord to withdraw his amendment. I look forward to further discussion.

[Lord Collins of Highbury (Lab)]

I hope I am able to intervene at this point before the noble Baroness sits down—some of these new rules that have been introduced for Committee stage I find incredibly damaging to our ability to properly scrutinise this Bill; I raised that point at the committee.

The noble Baroness said that the FCDO fully supports this legislation. She may recall that, at the previous Committee day, I specifically raised this question because I wanted to inform the Committee of the precise nature of the FCDO’s advice following United Nations resolutions regarding the Occupied Territories, which are specifically mentioned in this Bill. Perhaps she can take this opportunity to tell us how that advice could potentially impact the sort of investment and procurement decisions that organisations might make. There is advice issued by the FCDO in relation to the Occupied Territories.

[Baroness Neville-Rolfe (Con)]

We are going to be discussing the Occupied Territories in a group two or three later in this Bill and I do not have an answer to the noble Lord on this point today, except to reiterate that this Bill has been collectively agreed. I was particularly talking about the arrangements for regulations which, in turn, had been collectively agreed. I explained the system that when you have a new statutory instrument, there is a write-round which involves all relevant Ministers. In this particular case, that would certainly include the Foreign Secretary.

[Lord Warner (CB)]

Before the noble Baroness sits down, can I ask her to take away the point I was ineptly trying to raise earlier? If a public body—we could take as examples housing, health and care—has an investment decision to make on a new building and/or new services, is it expected to find out more about the sources of the money going to be used to enable it to perform public functions and provide new public buildings? Are they expected to go that far?

[Baroness Neville-Rolfe (Con)]

I am grateful for that point, but I am not sure I entirely understand it, so perhaps I can offer to meet the noble Lord or to write to him and make sure that he gets an answer in good time.

[Baroness Chapman of Darlington (Lab)]

My Lords, I was not expecting this group to elicit quite the debate it did, but it was incredibly helpful and welcome in exposing what the noble Lord, Lord Warner, called “sloppy”. He makes a fair point. The Minister said that she did not like that phrase but, given that we have been unable to agree a definition of a “public function”, unable to elicit a proper definition of “procurement” and have not agreed what a “public body” is by any means, I have to agree with him.

This is not us being mendacious or deliberately creating problems for the Government, although you could argue that is a fair thing for the Opposition to want to do; that is not what we are doing here. Like the noble Lords, Lord Willetts and Lord Deben, we are trying to get to the real nub of how this Bill enables the Government to fulfil the commitments that we all accept they made in their manifesto. We understand that the Government want to stand by those commitments, but we are so concerned that the legislation before us could end up straying into so many more areas. I honestly do not think that when this went into the manifesto, anybody had sporting bodies or schools in mind, yet here we are with the Minister unable to answer some quite straightforward examples, including a very good one from my noble friend Lord Boateng. I regret that.

I agree with my noble friend Lord Collins that, when the Government Whip pops up to try and rescue the Minister from having to take too many more interventions, that is fair enough, those are now the rules, but this place is supposed to be able to spend a bit more time in Committee—

[Baroness Neville-Rolfe (Con)]

I think that is a little unfair. The noble Baroness knows that I am always ready to take interventions and have continued to do so. I am doing my best to do the job that this Chamber does so well. We have used the Human Rights Act definitions and this Chamber has decided that that causes problems. I am sure those are soluble.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Committee stage
Tuesday 7th May 2024 Lords Chamber

[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.

[The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)]

My Lords, I will address the various amendments tabled in relation to international law. If the Committee is content, I will start by addressing Amendment 31, tabled by the noble Lord, Lord Hendy. It is a wide-ranging amendment, as some have said, which would allow public authorities to choose not to procure a good, service or works if their manufacture, provision or supply may have involved a breach of international law. Where a judgment has been made that a party has breached international law, it is for the Government and not a public authority to determine the appropriate response. This amendment would give public authorities too much discretion to engage in boycotts and divestment campaigns and would undermine the legislation.

--- Later in debate ---

[Lord Deben (Con)]

My noble friend is saying that, if a regime controls by force and in the most terrible way the whole economics of a nation, I can advise a private company not to deal with it and remove itself from it, but a public body could not say, “I will not trade with or buy from Myanmar”, unless the Government decide that they will not deal with Myanmar in that sense. I find that morally extremely difficult to take. We are asking private people to do things—I am sure the Government would support that—but we are going to exclude those who are democratically elected or who are looking after, for example, a university. I find that very difficult to take.

[Baroness Neville-Rolfe (Con)]

We are of course dealing with investment and procurement and the public bodies themselves.

Perhaps I should respond to the noble Lord, Lord Collins, who mentioned the Occupied Territories, which we will be coming back to on later amendments. Although the Government recognise the risks associated with—

[Baroness Blackstone (Lab)]

My Lords, I am sorry to interrupt the Minister, but I am perplexed by her view that foreign policy is simply a matter for central Governments. Foreign policy affects the population of the UK; it affects thousands of institutions in one way or another. We live, after all, in a global world. We do not live in a completely isolated country with no contact with the rest of the world. Foreign policy is not just something that can be determined and administered entirely by central government without the engagement, involvement and acceptance of those policies by a very large number of public and private institutions and individual members of this country.

[Baroness Neville-Rolfe (Con)]

I note what the noble Baroness says, but the Bill does not change UK foreign policy. That is for FCDO and the UK Government to decide. This applies only to public authorities and to investment and procurement, which I have continued to emphasise, because I think some of the discussion is needlessly wide-ranging—and, if I may, I will now make progress.

The Government, as I was saying, in relation to the Palestinian Occupied Territories, recognise the risk associated with economic and financial activities in the Israeli settlements, but we do not support boycotts of the Occupied Palestinian Territories. They are inherently divisive and may lead to inadvertent negative effects on Palestinians, as well as undermining the aim of the Bill, which is to ensure that we speak with one voice internationally. None of this changes existing government guidance.

[Lord Collins of Highbury (Lab)]

This is a fundamental point. I have made clear the Labour Party’s position on boycotts. We are talking about investment in factories in illegal settlements in the Occupied Territories. What is the noble Baroness saying to a public body that realises that an investment it had has suddenly transferred from Jordan to a factory in the Occupied Territories? Is she saying that that public body cannot say that the investment is in breach? It causes reputational risk and could fundamentally affect the value of the investment, because it is illegal. What is the noble Baroness saying: that we are going to put it in this Bill, come what may, because that is the foreign policy? It makes no sense to me at all. The Government are talking with two voices. The FCDO is saying one thing and this Minister is saying something completely different.

[Baroness Neville-Rolfe (Con)]

I do not think there is a difference between us and the FCDO. If I may, I will move on to the other amendments, because I am trying, as I always do, to answer the questions noble Lords have asked. There are a number of different amendments in this group, and I think we should look at them in the round. I will turn to Amendments 18, 28 and 29.

I will start with Amendment 28, which is a probing amendment tabled by my noble friend Lady Noakes, which would remove paragraph 6 of the schedule. She said that was a direct approach. I thank her, more generally, for her support for this legislation and for providing this opportunity to explain why this provision was included in the Bill. Paragraph 6 of the schedule makes an exception to the ban for considerations that a decision-maker in a public authority reasonably considers to be relevant to compliance with the UK’s obligations under international law.

Amendments 29 and 18, as the noble Lord, Lord Verdirame, has explained, would remove the existing exception and replace it with a narrower exception that would only allow public authorities to consider international law in a way that is influenced by moral or political disapproval of foreign state conduct, in line with regulations made by the Secretary of State. I would like to thank him, and my noble friend Lady Noakes, and the noble and learned Lord, Lord Etherton, for raising this matter. I acknowledge the noble Lord’s and my noble friend’s valuable expertise in this area— of course, they have the support of the noble Lord, Lord Pannick, who is not in his place, my noble friends Lady Altmann and Lord Wolfson.

There are very limited examples of when this clause might be relevant to public authorities, such as when abiding by sanctions under international law. It is therefore intended as a safeguard. I appreciate the noble Lord’s concern that public authorities could make their own subjective interpretations of foreign policy that are not aligned with the foreign policy of the UK Government. This exception can only be exercised by public authorities in a way that is “reasonable”. It would be up to the enforcement authority, or the courts, to determine whether the exception was exercised reasonably.

However, I appreciate noble Lords’ various concerns on this matter, including the impact on the courts, and the Government will consider these. We will no doubt return to the international law issue on Report. I thank noble Lords for their insightful contributions—

[Lord Purvis of Tweed (LD)]

Can I press the Minister on that? My understanding is that, under the Bill, in the absence of a Minister or the Government coming to a determination that international law has been breached, a decision-maker in a public authority can make the decision that there is the potential of a breach. Therefore, a decision-making body at the moment, for example—because Ministers are warning the Israeli Government that their actions in the West Bank and Occupied Territories are potentially in breach of international law—would be permitted under Schedule 6 to make a decision not to invest.

[Baroness Neville-Rolfe (Con)]

I am not sure that I entirely understand the noble Lord’s question, but I will reflect on it. We will come relatively shortly to a group that will look at these issues more broadly. If I am able to do so, I will come back to him at that point.

As I have already said, various concerns have been raised, which we will consider. I thank all noble Lords for their contributions. I say to the noble Lord, Lord Deben, that we value this House’s expertise, as I said at Question Time only last week. The Government will continue to think carefully about the important points that have been made. I hope the noble Lord will feel able to withdraw his amendment.

[Lord Verdirame (Non-Afl)]

My Lords, I thank all noble Lords who have taken part in this debate. The key driver behind our amendments was a concern about clarity, as the noble Lord, Lord Deben, pointed out. International law is not just a law but an entire legal system, so to say that you cannot breach international law is like saying that you cannot breach Chinese law. The legislative instruction has to be more specific than that. That is the essence of our concern.

I do not think the power we are proposing in my amendments, supported by the noble and learned Lord, Lord Etherton, would be excessive, as suggested by the noble Lord, Lord Oates. We have other examples of that in the legislation. As for the Minister’s comment on sanctions, we already have powers in legislation to deal with sanctions, so there would not need to be an international law exception on such a broad and unlimited basis to cover that situation; we already deal with that in our existing legislation.

I thank those who supported our amendments and analysis, in particular the noble Baronesses, Lady Altmann and Lady Noakes, and the noble Lord, Lord Wolfson of Tredegar. I look forward to the proposals that the Minister said she would consider bringing forward on Report. With that, I beg leave to withdraw.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Committee stage
Tuesday 14th May 2024 Lords Chamber

I conclude by making a final plea to the noble Baroness: sit down with us and try to work out how we can address the manifesto commitment, without widening its scope and creating the legal uncertainty that inevitably leads to court cases. We do not know the outcome of those.

[The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)]

My Lords, I thank noble Lords for their thoughtful contributions today and for their engagement. I particularly thank the noble Baronesses, Lady Drake, Lady Janke and Lady Blackstone, and the noble Lords, Lord Shipley, Lord Willetts and Lord Hannay, who met me and officials to discuss the amendments a couple of weeks ago. During that meeting, noble Lords expressed their concerns regarding the financial and practical matters exception and the application of the Bill to the administering authorities of local government pension schemes. I sympathise with their ask for clarity in this area and I have taken some time to reflect on their comments. I will set out why, on balance, I think the Government’s drafting is sound on these points.

Before I address the amendments, I will set out why it is so important that the administering authorities of LGPSs are captured by the Bill. It is not a manufactured problem, as suggested by the noble Lord, Lord Wallace. Administering authorities come under frequent pressure from external pressure groups such as the Palestine Solidarity Campaign and the BDS movement to engage in BDS campaigns. We saw a notable example in 2021, when a UN special rapporteur wrote to the administering authorities of LGPSs demanding divestment from a number of Israeli companies. My noble friend Lady Noakes referred to this. The demands cited the LGPSs’ ability to play a transformational role.

We have also seen the BDS campaigners take credit for some decisions by administering authorities of LGPSs to divest from Israeli companies. For example, campaigners took credit for a decision by East Sussex Pension Fund to divest from an Israeli company.

Amendment 27, tabled by the noble Baroness, Lady Drake, would ensure that the ban does not hinder the ability of public authorities to consider financial risk and impact in their investments in a way that is influenced by moral or political disapproval of foreign state conduct. The Government agree with the policy intention of the noble Baroness’s amendment, and I acknowledge her expertise in this area.

However, having looked into the matter, we remain of the view that the Bill as drafted does not prevent public authorities being able to assess the financial and political risk of investments. The exception for considerations reasonably relevant to financial value and practical utility ensures that public authorities, including the administering authorities of LGPSs, will be able to make commercially viable decisions. This includes decisions to exclude investments if an assessment of the political and economic risks of an investment’s location could reasonably have an impact on the financial return of the investment.

I am grateful for the contributions of my noble friends Lady Altmann and Lady Noakes, and I confirm to the noble Baroness, Lady Drake, that

“financial value or practical utility”

captures considerations relevant to an investment’s long-term value and financial risk, not just its current value. I hope that my clarifying this on the Floor of the House provides the noble Baroness with reassurance.

[Lord Warner (CB)]

I want to clarify something that the Minister just said. Does this mean that, if my local authority pension scheme, from which I benefit, decided that an investment in Israel was risky and put the members’ money at risk, it could disinvest because it was risky, but not for any other moral grounds? Is that still permitted under this legislation?

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

I will cover that later in my response. There is a point about territoriality, which we will come on to address.

Additionally, the drafting of the guidance referenced in the speech from the noble Baroness, Lady Drake, does not change our view of the scope of this exception. I agree with my noble friend Lady Noakes’ assessment that the amendment could cause some confusion. If we were to accept it, it might raise questions about what considerations relevant to “financial value” and “practical utility” actually capture if they do not capture risk assessment.

I know that the noble Baroness will be disappointed that the Government are unable to accept her amendment, but we did not brush it aside and looked carefully at what she said at our helpful meeting. However, I hope that she is reassured by the Government’s position that the Bill’s current drafting adequately addresses her concerns, with that clarification.

Before I turn to other amendments, I will address the noble Baroness’s point about the impact of judicial review on LGPSs. I will provide a fuller response to the detail in the later group that was referred to in the debate. The Government believe that it is right that companies that have been the target of boycotts and divestment campaigns can challenge these decisions through the courts. There are safeguards in place to prevent undue or nuisance claims. None the less, the number of examples of administering authorities participating in BDS campaigns is relatively small; therefore, we do not anticipate a large burden on the courts.

Amendment 45, tabled by the noble Baroness, Lady Blackstone, would remove management decisions from the Bill’s definition of “fund investment decision”, with a view to ensuring that the ban does not apply to the stewardship activities of administering authorities of LGPSs. I confirm, as we agreed at our meeting, that stewardship activity would be an example of a management decision.

It is right that the ban applies to stewardship. Otherwise, administering authorities could, as part of the stewardship of their investments, ask companies in which they have invested to engage in boycotts and divestment campaigns. If this was allowed, campaigners would be emboldened to lobby local government pension funds to ask companies in which they invest to boycott and divest. These campaigns distract local administering authorities from their core duties and could contribute to community tensions. We believe that allowing this kind of activity would undermine the ban.

The Bill contains an exception to the ban for considerations that a decision-maker considers relevant to the financial value or practical utility of an investment. Therefore, it would not prevent public authorities asking companies in which they invest to consider matters that they consider may affect the long-term value of their investments.

I understand that the noble Baronesses, Lady Blackstone and Lady Janke, are concerned that this position conflicts with the Government’s wider policy on stewardship. We do not consider this to be the case. This is an extremely narrow Bill that will place restrictions only on the ability of the LGPSs’ administering authorities to make territorial considerations in their investment decisions that are influenced by moral or political disapproval of foreign state conduct. LGPSs’ administering authorities will still be able, through effective stewardship, to exert a positive influence on investee companies to promote strong governance, manage risk, increase accountability and drive improvements in the management of environmental, social and corporate governance issues.

Administering authorities are ultimately responsible for setting the investment strategy of their funds, having taken proper advice. This includes setting their asset allocations to achieve a diversified portfolio of investments which overall is suitable to meet liabilities, as well as setting their approach to responsible investment, in line with statutory guidance. The Bill will support administering authorities to remain focused on their core duties, protecting the long-term financial interests of beneficiaries.

Amendment 46A, tabled by the noble Lord, Lord Collins, would provide that a pension fund in scope of the ban can make territorial considerations influenced by moral or political disapproval of foreign state conduct when making decisions in line with certain investment guidelines published by the UN. The Bill will apply only to campaigns that target countries and territories specifically, and therefore will not prevent the adoption of ESG requirements that are not specific to a country, such as modern slavery requirements. For example, to address the point made by the noble Baroness, Lady Janke, the Bill will in no way prevent the LGPS administering authorities divesting from fossil fuels, as long as this policy is applied to all countries and territories consistently. Similarly, the Bill will not prevent the administering authorities divesting from companies implicated in human rights abuses, provided the policy is applied to all countries, rather than identifying particular countries or territories.

The Bill will not prevent LGPS administering authorities making a decision in line with guidelines published by the UN, as long as this does not entail the public authority having regard to a territorial consideration in a way that indicates moral or political disapproval of foreign state conduct. For example, the Bill will not prevent public authorities having a policy to comply with all UN sanctions or UN Security Council resolutions, as that is not a territorial consideration. However, the policy must be genuinely non-country specific—

[Lord Collins of Highbury (Lab)]

Can the Minister specifically address the contribution from the noble Lord, Lord Hannay, in relation to territorial extent? I have in mind, because it was raised in other groups and discussions, companies that attempted to have factories or investments in the Occupied Territories and might then have withdrawn from those investments. I want her to focus on that. If a company decides that it will open a plant in the Occupied Territories and will not have the benefit of legal protection under international law, and it would be contrary to the advice the Government have given, and if a local government pension scheme then said, “Well, that company is putting our investment at risk and therefore we will disinvest”, would that be legal under the Bill?

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

I can confirm that LGPSs will be allowed to divest from, say, the settlements or Israel if the sole reason is that the investment is financially risky. It is if it is caught by the flavour of the Bill that we run into a problem—

[Lord Collins of Highbury (Lab)]

It is important for clarification because the Government’s own advice says “It’s risky because it’s not legal and therefore won’t have that international law protection”. So it is very good if the Minister is being absolutely clear in relation to the Occupied Territories.

[Baroness Neville-Rolfe (Con)]

Perhaps I could just finish on the other points. It makes perfect sense to ensure that, when having regard to ESG requirements, these are applied consistently by LGPS administering authorities and do not single out particular countries or territories—because it is the latter that will breach the ban, as I think we all now understand.

The Bill allows for a number of exceptions, including considerations relating to labour market misconduct, modern slavery and human trafficking. Therefore, the Bill will in no way prevent the administering authorities adhering to modern slavery guidance.

Finally, I turn to the proposition from the noble Lord, Lord Davies of Brixton, that Clause 12 should not stand part of the Bill—

[Lord Hannay of Chiswick (CB)]

I am slightly puzzled by the Minister’s statement that the Government wish to avoid any territorial connection, since the Government themselves have placed large chunks of territorial description in the Bill. Could the Minister enlighten us on that? After all, it is the Government who have put down a Bill that talks about Israel and elides Israel with the Occupied Territories, the Golan Heights, east Jerusalem and the West Bank. Although they have confirmed their view that the settlements in all those areas are illegal, and therefore that investment in those settlements would be illegal too, it is the Government who are specifying this matter territorially. By all means, take the whole lot out—that would be fine.

[Baroness Neville-Rolfe (Con)]

As I was trying to explain, the important point is that it depends on the motivation for the decision. The Bill would prohibit only investment and procurement decisions that would appear to a reasonable observer to be influenced by moral or political disapproval of foreign state conduct, and have a territorial element. It would not prevent public authorities making any other kind of territorial or practical business considerations. I have been trying to clarify this.

As I am conscious of time, perhaps we could turn finally to—

[Lord Warner (CB)]

I am sorry, we are getting very confused, certainly at this end of the House, as to what is the issue of risk. If a country—let us forget the names of the countries in the Bill—has a reputation for unrest and uncertainty, the cautious trustees of a local government pension scheme are highly unlikely to want to put their members’ money at risk. Where we have a situation in, say, a number of Middle Eastern countries where that is the position, they would, quite reasonably, in pursuit of their fiduciary responsibilities, not invest in those countries. So they would presumably be documenting that the reason they were not investing in those countries was the risk at which it would put their members’ money. Is that the position? As long as they show that that the reason they have made investment decisions to disinvest from, let us say, Israel or the Occupied Territories, is because it puts at risk their members’ money, is that okay under this legislation?

[Baroness Neville-Rolfe (Con)]

To confirm, I think that is what I said a couple of minutes ago. The sole reason must be that it is financially risky—that it is business risk guidance, not boycotts. My own feeling is that that is a helpful clarification. I am sure that noble Lords will look in Hansard at what I have already said.

If I might now finish, I would very much like to—

[Lord Thomas of Cwmgiedd (CB)]

Before the Minister sits down, which she has indicated she is very anxious to do, I would like to go back to the, in my view, very unfortunate discussion that we have had about the definition suggested in Amendment 27.

As I understand it, it is accepted that financial risk is included within the wording. What is unclear—no doubt in years to come people will pore over the Minister’s speech, so I want another little bit for them to pore over—is: what about financial impact? I think the Minister said that that gave rise to uncertainty, but it would be helpful to know whether, in looking at the way in which decisions can be made, the financial impact can be taken into account. It would be so much better, of course, if we put the words in the Bill and left it not to accountants but to lawyers to deal with in the future.

[Baroness Neville-Rolfe (Con)]

I can reassure the noble and learned Lord that lawyers have been involved in drafting the Bill, as he can probably imagine. I tried to set out quite clearly at the beginning why we felt that the wording we got was right; that included financial impact. I have subsequently clarified the point about motivation and financial risk.

In the excitement, I have lost my place. I was asked about the effect of removing Clause 12, and was hoping to be able to answer the noble Lord. Removing the clause would mean that the ban would not apply to the fund investment decisions of administering authorities of LGPS. The administering authorities are local authorities, which are clearly a core part of the state and are therefore public authorities for the purposes of Section 6 of the Human Rights Act. That is why they are the only pension funds captured by the Bill. We have seen clear examples of local authorities attempting to engage in BDS activity in the past. It would not be appropriate to apply the ban to funds administered by private entities, such as the Universities Superannuation Scheme.

As I have argued before, council tax payers should be able to expect their local councils to exert time and effort on solving local issues, rather than spending time thinking about boycotts of foreign states when, as the noble Lord has said, the beneficiaries expect the responsible authorities to concentrate on returns and the ongoing viability of their investments in the interests of the beneficiaries. If the Bill were to stand without Clause 12, councils coming under pressure to develop their own policies on divisive international issues would be pushed towards an LGPS loophole to implement BDS campaigns.

The priority for these funds should be to provide stability and good long-term returns for the hard-working local government officials who are their members. We now know that this includes the noble Lord, Lord Warner, the noble Baroness, Lady Janke, and others. The Bill helps the administering authorities not to be distracted from this important purpose, and to focus on returns in a responsible, long-term way. For these reasons, I ask noble Lords not to press their amendments and not to oppose the question that Clause 12 stand part of the Bill.

[Baroness Drake (Lab)]

My Lords, I thank everyone for participating in this debate, particularly those who supported my amendment.

I should make it clear that I have not actually challenged the manifesto commitment; lots of others do, but I have not. I have challenged that the manner of its implementation introduces legal uncertainty and perverse consequences: inviting a wider range of legal challenges and judicial review. It would seem good business to address that.

The Minister says that she hopes I am assured by the Government’s assurances, but it is not me who needs the Government’s assurances; I am not a decision-maker in the Local Government Pension Scheme or in public procurement. Most people know that I am a trustee, but I am not in a local government pension scheme. It is those with the concerns—I know they have them—and the decision-making responsibility who are not reassured by these statements, and were not reassured by the statement of the Secretary of State.

We can stand on these Benches and argue between ourselves as to what “financial” does or does not embrace —I can bore you with 30 years of experience and what legal guidance I have had as a trustee—but that does not matter. We have an uncertainty; we are resting on a government statement that it is not uncertain, but we are already uncertain as to whether it includes impact. We could simply address the issue and put “financial risk” as one of the explicit considerations that need not necessarily fall foul of the Bill. I have not heard a single good reason today why such a simple tweak could not address this issue. I have had wider discussions on a whole range of things. It is not only me but people I have spoken to—who will be engaged in decision-making—who believe it opens up the range for judicial review and legal challenge, and feel it has legal uncertainty. It seems to be good sense, when you are looking at a fund of £360 billion, that when those concerns are expressed, you address them.

The Bill creates a whole new machinery that allows the checking of the integrity of local government pension scheme investment decisions against a new set of criteria. That has opened up new grounds for judicial review and given opportunities or succour to possibly bad-faith actors. Legal proceedings could demand to know all the details of exchanges and engagement in discharging stewardship duties, to see whether an investment decision fell within an accepted category. In a £360 billion local government pension scheme, I would want to nail that. If I was a government department and was going to introduce that machinery—which suddenly introduces a whole new set of criteria for investment decisions—I would want to nail down the range of areas under which local government pension scheme decision-makers could be attacked.

There is uncertainty. I quote from the Financial Markets Law Committee report, which the Government have endorsed and think is a good idea. It says that

“investment decisions have all become more challenging in the context of sustainability and the subject of climate change … Today it is sometimes easier to state the duties than it is to apply them”.

Well, the Bill makes it even more difficult to apply them. It brings a whole new range of criteria and invites legal uncertainty at the same time, because we cannot agree on the definition of “financial value”, but if we added a tweak, such as risk and impact, we could nail some of this. As has been said, why can we not just lock it down and get rid of some of this uncertainty?

We have some guidance on impact. I cannot bring every reference document that I would bring to the table if I was sitting in a negotiating room, but we have very new guidance from the DWP, on its website, on social factors and the impact. These are not the only factors, but it gives a meaning to “impact”:

“the impact of social factors on an investment”

or the “impacts of an investment”. It is a pretty wide range. In fact, on ESG, the statutory guidance to local government says that it can consider any factor that is financially material to investment principles. So we can track from the Government’s own publication what impact means. The Minister referred to having government lawyers; they will have drafted some of those documents.

The explanatory statement to Amendment 46A says that its intention is for there to be the ability to carry on applying ESG factors in the way they have traditionally been applied. We know what that means in local government, because it is set out very clearly in statutory guidance.

On the issue of territorial matters, I tried to give an extreme example—passive funds. Anybody who is a trustee knows what passive funds are. On the logic of this, unless we put “risk” in very clearly, if you have a passive fund that does climate transaction benchmarks, you might be liable to someone saying, “Well, there was a company or a country in there that was screened out; did you individually interrogate the way in which that passive fund that you invested in was screened out?”. I know that is extreme, but this is the situation we get into unless issues such as impact and risk—clearly legitimate factors to take into account, as set out in statutory guidance from the relevant department to LGPS—can unequivocally be taken into account.

The noble Baroness, Lady Altmann, spent a lot of time referring to the Local Government Pension Scheme as a statutory pension scheme; it is not a trust-based scheme. Absolutely—I mentioned that because I wanted to set out that I understood that distinction because it is not relevant to the point I am making. It is not relevant to the point that it is ambiguous and uncertain under the terms of this legislation.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Committee stage
Tuesday 14th May 2024 Lords Chamber

[Baroness Janke (LD)]

My Lords, to answer some of the points made by the noble Baroness, Lady Noakes, the idea that individuals are not targeted is certainly not sufficiently reassuring to make local decision-makers feel protected. Most of what is in the Bill seems to be very much targeted at local authorities and their members.

It is perhaps worth while to point out here, in this unelected Chamber, that councils are directly elected and are accountable to their electorate. They are also obliged to report back to their constituents about such things as decisions that they have made. I was a former leader of a council, and I would have wondered, on seeing this Bill, having been asked why I had made a certain decision, whether replying in a certain way would mean that I was prosecuted, or perhaps that I was not able to reply because I am forbidden to speak about this. There is sufficient lack of clarity in the Bill to make people wonder about that. I do not think that it has been demonstrated otherwise. As the noble Lord, Lord Warner, said, the Constitution Committee sees this as a major threat to free speech. We need some more guidance on this.

I take exception to the idea that, somehow, statements from student encampments are equated with statements issued by locally elected authorities and their officials. They are not the same at all. Local authorities have a constitutional role, and they should be respected as such. The contempt that I have heard from some people in this Committee is unwarranted, given the lack of evidence of councils making such decisions as are prohibited in the Bill.

The idea that prohibiting such statements will have a good effect on social cohesion is much more likely to have the opposite effect. If people are told that they are not allowed to make statements, they are much more likely to try to find other ways of getting their messages across. The idea of oppression leading to better social cohesion seems to me to be a false premise.

I agree with the noble Baroness, Lady Chapman, that there is a complete failure by many of us in this Chamber to explain why Clause 4 is necessary. We have not really heard any good reason, other than the noble Baroness, Lady Noakes, telling us it is for social cohesion.

On the idea that freedom of speech is offended by Clause 4, as the right reverend Prelate said, freedom of speech is a basic right and a cornerstone of democracy. Although we are an unelected House, we fight for democracy—I would hope—and stand by democratic principles, as has the Constitution Committee, as told to us by the noble Lords, Lord Beith and Lord Warner.

The practical issues with the Bill, as to how its provisions are actually enforced, is again something that needs clarity. As the noble Lord, Lord Warner, said at the beginning, we are discovering with the Bill that, the further we go with it, it really lacks clarity. Trying to establish what it is meant to do and how it is meant to do it seems to have defeated us so far.

We need much better clarification about the Human Rights Act. If the Constitution Committee of this House tells us that the Bill contravenes Article 10 of the Human Rights Act, we need to know how it is that Ministers are telling us that it is somehow compliant, as this is clearly not the case.

As the noble Lord, Lord Beith, said, to prevent people talking about issues important enough for them to be calling for a boycott is an outrage. The Explanatory Notes trying to maintain that somehow individual councillors will not be targeted or held responsible is totally inadequate if that is not going to be on the face of the Bill.

The clause deserves to be removed. I very much regret that it disrespects the role and responsibility of directly elected councillors and their officials. It has extreme overreach in trying to gag them and prevent them explaining their decisions, for which they are publicly accountable. I believe that contraventions of the ECHR are matters to be taken very seriously, so I want to hear from the Minister further explanation and further response to the recommendations of the Constitution Committee.

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, Amendment 33 to remove Clause 4(1)(b), moved by the noble Baroness, Lady Chapman, and the amendment in the name of the noble Lord, Lord Collins, to remove Clause 4, undermine the aims of the Bill.

Before I address the amendments, I reiterate that the Government are committed to protecting freedom of speech, which is why the Bill’s provisions apply only to public authorities and not to individuals or companies in their private capacities. I made that clear in my response to the Constitution Committee report in March and set out why the clause is necessary to fulfil the 2019 manifesto commitment.

I also clarify to the noble Baroness that we are not creating any new criminal offences in the Bill for statements about boycotts or handbags or any other kinds of statements. Moreover, statements about one wanting to steal someone’s handbag would clearly not have an impact on community cohesion in the way that statements of intent to boycott may. Statements of intent to boycott can be threatening and intimidating, particularly for those within the Jewish community.

[Baroness Chapman of Darlington (Lab)]

My Lords, we are not talking about a statement of intent to boycott; we are talking about a statement that you would have done something but you do not intend to do it. That is the point that we are trying to make.

[Baroness Neville-Rolfe (Con)]

I think that it is necessary to make these points within the framework of the Bill.

I will move on and explain Clause 4, which, in its entirety, is an instrumental part of the Bill. It prohibits public bodies from publishing statements indicating that they intend to engage in activity prohibited by the Bill. That includes statements indicating that the public body would have acted differently if the legislation had not been in place.

I will deal directly with some points that I feel are misconceptions. The clause will not affect the statements of individuals, unless they are speaking as or on behalf of a public authority. The noble Baroness, Lady Chapman, is not speaking for a public authority in her colourful example; I assure her that she would not be in breach of the ban if she were making a statement of intent to boycott. Even when an individual is speaking on behalf of a public authority, the ban applies only to the public authority itself and there is no personal liability for the individual. Thos includes councillors, to answer the question raised by the noble Lord, Lord Davies of Brixton. For that reason, I reiterate—

[Lord Warner (CB)]

I am very sorry, but I must ask the Minister to address the question about Clause 1(7)(b). If she reads that clause, she will see that it could cover any individual who seeks to influence a decision-maker. That could include, in my interpretation, a journalist writing a campaign statement in a newspaper, asking whichever council it is to take action.

[Baroness Neville-Rolfe (Con)]

I will come on to decision-makers.

I reiterate that it is important that the Bill does not breach Article 10 of the ECHR on the right to freedom of speech, and I have already reiterated the Government’s support for free speech. The reason the Bill is compatible with the ECHR is that public authorities do not enjoy human rights, as the purpose of the convention is to protect individuals from undue interference by the state, of which public authorities form a part.

I gave a full reply to the committee in my letter of 15 March, and we have already added extra provisions to the Explanatory Notes, some quoted by the noble Lord, Lord Beith, to make it clear how the sorts of concerns expressed this evening may be mistaken. He provided an example where a local authority debated a motion to boycott that was ultimately not passed, and asked whether the public authority would be in breach of the ban if it explained that the reason it did not support the motion is that it would be illegal under the Bill. In this scenario, it is the individual councillors who said that this is the reason they did not support the motion in the vote. The public authority has not adopted the motion. Its statement merely summarises the individual councillors’ reasoning. It is therefore not an expression of the public authority’s intention to boycott. Even in the case where the councillor was speaking on behalf of that public authority, such a statement would be in breach of the Bill only if it clearly indicated that the public authority intended to engage in a boycott in the exercise of its public functions or would engage in such a boycott if that were lawful.

[Lord Beith (LD)]

As I say, it is the leader of the council who is being questioned as to why the council did not, in the event, agree to a boycott, although there were speeches in the chamber and maybe some votes cast supporting a boycott. What is he able to say that does not fall foul of the legislation as currently drafted? If he says, “The reason we are not going ahead with this is that it is against the law, and this council does not do things that are against the law”, is that not in breach?

[Baroness Neville-Rolfe (Con)]

The principle is that the person seeking to influence would not be caught by the Bill. The provision is to deal with a situation in which a public authority boycotts because of pressure from someone else, rather than its own disapproval of a foreign state.

[Lord Beith (LD)]

I apologise, but I think the Minister is trying to answer at the same time the points that I and the noble Lord, Lord Warner, made. His point was about the category of people referred to in Clause 1(7), I think. I am talking about a situation, directly following the example that I gave and she has used, in which the leader of the council seeks to explain why the council is not doing what at least some people were recorded as having said that it should do during the debate, saying, “No, we’re not going to do that because this council does not do things that are against the law”.

[Baroness Neville-Rolfe (Con)]

I will take the noble Lord’s example away. I have given him a clear statement and he makes a reasonable point. I think there is an answer to it, but I will not just make it up; I want to give him a clear answer on that. Perhaps I can move on and deal with one or two other concerns.

[The Lord Bishop of Manchester]

I am sorry to delay things yet further. We have had a lot of discussion about theoretical examples of what might happen. I tried to give your Lordships’ Committee a particular example of a case against the then Mayor of London. It was a notorious case and it took months in the courts to decide whether he was acting as a public authority or in his private capacity. Therefore, how can the Minister seem to think it so simple to decide when somebody is acting in a private capacity and when they are acting as a public authority, given that the one case that really got the public attention spent months in the courts before it was eventually determined that on that occasion he had been acting in a private capacity? I am sure that everybody can remember the case.

[Baroness Neville-Rolfe (Con)]

I am afraid that I am not familiar with that case, but I take the right reverend Prelate’s point. The way I have described this shows that in fact this is limited in intent; free speech is possible in a personal capacity. I will come on to say a little more about that and about decision-makers, because I know that we need to clear up those points and I am conscious of time.

The noble Baroness, Lady Chapman, highlighted that Ministers in the Scottish Government would be captured by this provision. As I have explained, as Ministers in the Scottish Government are public authorities for the purpose of human rights, they do not have ECHR protections in their public functions. It is clearly right that this provision should apply to Scottish Ministers to ensure that communities in Scotland are protected from these divisive statements, and foreign policy is a reserved matter. Additionally, Clause 1 applies only in relation to procurement and investment decisions in the exercise of public functions. Therefore, Clause 4 would not apply to statements made by Scottish Ministers about how they tend to act in their private lives.

[Baroness Chapman of Darlington (Lab)]

Can we be absolutely crystal clear on this? The Government are arguing that a Minister in Scotland, the Mayor of Greater Manchester, Andy Burnham, or the First Ministers of Wales or Northern Ireland could not legally make a statement saying, on behalf of the public authorities they are elected to lead, that they do not intend to break the law because they do not break the law. Clause 4 would prevent them doing that.

[Baroness Neville-Rolfe (Con)]

I am not sure that is right. I will seek advice.

[Baroness Chapman of Darlington (Lab)]

It is important.

[Baroness Neville-Rolfe (Con)]

It may be important, and therefore it is all the more important that the noble Baroness’s question is answered fully and accurately. I have made it clear in answer to the noble Lord, Lord Beith, that as only public authorities are subject to Clause 1, Clause 4 is strictly limited to the actions of public authorities and therefore not individuals associated with public authorities.

[Baroness Drake (Lab)]

As chair of the Constitution Committee, I should say that the answer from the Government went on to say that declarations could be as harmful as the boycotts themselves, and that was deployed in defence. It is quite right to clarify the point made by the noble Lord, Lord Beith, on what constitutes a declaration that does or does not fall under the qualification in paragraph 6 of the Minister’s reply to the Constitution Committee. I do not seek to express a view; I am just saying that there is that undefined element.

[Baroness Neville-Rolfe (Con)]

I note the point that the noble Baroness has made. We did reply to the Constitution Committee, but I will reflect further on this point.

My noble friend Lady Noakes said that there had been some confusion due to the use of the term “person”, which I have already referred to. To respond to the point raised by the noble Lord, Lord Hendy, in the context of this clause, the legal term “person” refers only to a person subject to this Bill’s ban. In other words, it refers only to a public authority as defined in Section 6 of the Human Rights Act 1998. The legal term “person” does not have the same meaning as in normal English. This is standard legal drafting.

Additionally, for the purposes of this Bill, decision-makers are public authorities—as explained by my noble friend Lady Noakes and confirmed in Clause 2(1) of the Bill, which I have just referred to. Public authorities will delegate decision-making to individuals, but individuals’ decisions or statements are captured only when they are made on behalf of the public authority. This issue was also discussed in Committee in the other place. It was because we listened to the concerns raised on this point that we revised paragraphs 32 and 33 of the Explanatory Notes. Paragraph 32 states:

“As only public authorities are subject to clause 1, this clause is strictly limited to the actions of public authorities”


and therefore not individuals associated with public authorities. I think that goes three-quarters of the way to answering the question asked by the noble Baroness, Lady Chapman, but I will follow up.

I hope that makes it clear that this Bill is not an assault or restriction on the principle of free speech. Rather, it aims to ensure that the UK speaks with one voice internationally. Public authorities should not be pursuing their own foreign policy agenda or publishing statements on foreign policy. It distracts from their core duties. Clause 4 will support those bodies to remain focused on that purpose. It is a core part of the Bill and meets the manifesto commitment to ban public bodies from imposing their own direct or indirect boycott, divestment or sanctions campaigns against countries and territories.

Briefly to address Amendment 33, and the point raised by the noble Baroness, Lady Chapman, I remind the Committee of just how divisive of community cohesion within the United Kingdom declarations of intent to boycott can be. That includes statements made by public authorities that indicate that they would intend to participate in boycotts and divestments if it were legal to do so. The right reverend Prelate the Bishop of Manchester, who I am very glad has joined our discussions, will have noted what I said about elected officials, including councillors, expressing a view which is not related to the narrow purpose of this Bill. He asked for an example of our concern. We saw a good example in Leicester, which my noble friend Lady Noakes referred to. In its resolution in 2014, Leicester City Council passed a motion targeting the activity of the Israeli state with a boycott

“insofar as legal considerations allow”.

The motion was widely condemned by Jewish groups and was extremely divisive. This demonstrates the need to ban statements of intent to boycott or divest which express—

[Lord Wallace of Saltaire (LD)]

My Lords, we need to be very careful about how we talk about social cohesion at present. As it happens, I spent some time last weekend in Saltaire, which is part of the Bradford local authority, talking with one of Yorkshire’s Christian leaders and one of Yorkshire’s Muslim leaders about how we maintain social cohesion and interfaith co-operation under the current circumstances. It is not easy. These are two people whom I like and trust, and they are very good friends. We have to recognise the impact of the ongoing war, and in particular the response of our younger generation—white and Christian, and south Asian and Muslim—in all their diversity. It is very delicate at present, and simply asserting that stopping debate is a way to maintain social cohesion is not the answer.

[Baroness Neville-Rolfe (Con)]

As the noble Lord knows, the Bill aims to improve the situation with social cohesion. I note what he said, but we have seen examples of councils, such as Islington, passing motions in opposition to the Bill alongside foreign policy statements about Israel and other countries. While this might not be a breach of the ban, it demonstrates a strong interest in public authorities engaging in BDS campaigns. It could demonstrate that the Bill is already be having its intended effect of preventing public authorities making divisive statements.

The point is that, overall, Clause 4 supports the main aims of the Bill in ensuring that the UK speaks with one voice internationally and has one foreign policy agenda, and that public bodies do not introduce policies in that area that risk dividing communities at this difficult time. Accordingly, for this evening, I kindly ask the noble Baroness to withdraw her amendment.

[Baroness Chapman of Darlington (Lab)]

My Lords, this has been a helpful debate, if somewhat frustrating at times. I do not think that it is good enough to be reminded of social cohesion as a way of trying to entice us into supporting this measure. We all want to work hard to improve social cohesion where there are issues, and I know that the Minister would accept that that is our intention too.

There are fundamental problems with this clause. The Minister herself has said that she is unable to answer some quite basic questions that we have asked, and not for the first time this evening—we have asked these questions before. We have used different examples to try to tease out the answers, but the principal question is the same: who will be subject to this measure and what might the effect of that be? We still do not know the answer to that.

[Baroness Neville-Rolfe (Con)]

With respect to the noble Baroness, I have answered the large majority of the questions, but I said that I would take away the underlying question that she is enunciating.