Economic Activity of Public Bodies (Overseas Matters) Bill

Lisa Nandy Excerpts

2nd reading
Monday 3rd July 2023 Commons Chamber

[Lisa Nandy (Wigan) (Lab)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House, while opposing any discrimination or prejudice in the economic activities of public bodies, believing that all such bodies must act without bias or selectivity when making ethical decisions on procurement and investment and recognising the impact selective and biased campaigns have had on the Jewish community in particular, declines to give a Second Reading to the Economic Activity of Public Bodies (Overseas Matters) Bill, because the Bill risks significantly undermining support for groups around the world facing persecution, for example the Uyghur, who are currently victims of grave and systemic human rights abuses, is incompatible with international law and the due diligence of public bodies, undermines the UK’s long-standing cross-party position in respect of the Occupied Palestinian Territories and Golan Heights by conflating these with the State of Israel and running counter to UN Security Council Resolutions, singles out the State of Israel in effect creating the issue it intends to solve, seeks to enforce its provisions by giving unprecedented powers to the Secretary of State beyond those enjoyed by the police and the security services, places unprecedented restrictions on the ability of public bodies, many of them directly elected, to express a view on policy, current, proposed and desired, has potential widespread and negative impacts on local government pension funds, limits freedom of speech and is likely to be subject to repeated and extended legal challenge by reason of its conflict with established legal principles; and therefore urges the Government to bring forward alternative proposals.”

I recognise the Secretary of State’s very touching words on Lord Kerslake. He was Lord Kerslake to some, but Bob to those of us who have benefited over many years from his ceaseless encouragement and advice. His knowledge of central Government and local government was unparalleled. His commitment as a genuine public servant who cared deeply about people will be badly missed. He was taken from us too soon, and I would like to add our voice to the very touching tribute from the Secretary of State.

It is perhaps in the spirit that Bob would have wanted that I approach the Bill—on a note of consensus, on something that ought to be a matter of consensus for Labour Members. I recognise that there are deeply held feelings about these issues, and I want to acknowledge that Members in this debate must be heard. I shall, of course, welcome interventions, but I will seek to balance that with the need of Members on both sides of the House, whether I disagree with them or not, to make their views known.

I want to begin by saying to the Secretary of State that we recognise the problem which he says the Bill is designed to tackle. It is therefore deeply frustrating that the Government have introduced a Bill that is needlessly broad, with sweeping, draconian powers and far-reaching effects. Instead of Members on both sides of the House having the opportunity to come together and welcome long-overdue action, he faces genuine, legitimate, heartfelt opposition from Conservative Members; from groups who face persecution, such as the Uyghur, who thought that we stood with them; from human rights groups; and from local government. I have watched the Secretary of State lose Government Members because of the tone that he has struck in the debate. I hope that as the debate progresses he will listen to some of those concerns.

I say to the House that it does not have to be this way. It is not, in our view, wrong for public bodies to take ethical investment and procurement decisions. In fact, there is a long history of councils, universities and others taking a stance in defence of freedom and human rights. In the case of elected councils, their electors often expect them to do just that. There is a difference between legitimate criticism of a foreign state’s Government and what some individuals and organisations have tried to do in recent years, which the Secretary of State outlined well. To seek to target Israel alone, to hold it to different standards from other countries, to question its right to exist, to equate the actions of the Israeli Government with Jewish people, and in doing so create hate and hostility against Jewish people here in the UK is completely wrong.

There is at least one example of a publicly funded body that has taken a stance against the state of Israel that has effectively cancelled Jewish culture here in the UK. We will always stand against that. Most public bodies would not dream of behaving like that, but even one incident has unacceptable and far-reaching consequences for the Jewish community, increasing hate and hostility at a time when antisemitic attacks have reached a peak, children learn behind gates, and security guards stand outside synagogues.

[Stephen Crabb]

The hon. Lady is speaking really well, and she gave a remarkable Second Reading speech on the Holocaust Memorial Bill.

The hon. Lady is trying to suggest that examples of BDS are few and far between, and that it is a legitimate field of activity for public bodies to comment on foreign policy and express ethical concerns. The trouble is, time and time again, it is about BDS and it is about targeting Israel. When the Welsh Government issued a procurement advice note two years ago, they were trying to single out Israel yet again, and no Labour MP said a thing about it. Is that not the problem?

--- Later in debate ---

[Lisa Nandy]

I can assure the right hon. Gentleman that I feel strongly that BDS offers no meaningful route to peace either for the Palestinians or for the Israelis. I can assure him that when BDS is used as an argument for the total economic, social and cultural isolation of the world’s only Jewish state, not only will I speak out but I have spoken out time and time again. As far as I know, I am the only Member in the House—there may be others, and I apologise in advance if I have missed anyone—who has gone directly to take on those who argue for a boycott, divestment and sanctions against the state of Israel and for a one-state solution. I have taken on that argument, because I firmly believe that it is wrong and unhelpful. As I have just made clear to the House, this might not be every public body—I do not believe for a moment that it is—but one incident is too many. It has profound effects on the Jewish community.

That is why so many people in the Jewish community have fought long and hard for action to tackle this problem, and it is why we support them. In fact, we were sufficiently concerned about it that earlier this year we tried to amend the Procurement Bill to ensure that when councils take ethical decisions, they do so in line with an ethical framework and Government guidance and apply those decisions across the board, not seeking to single out any one country for differential treatment. We believe that that amendment offered clarity and certainty to our elected officials and councils, and security for the Jewish community, and we were disappointed that the Government voted it down. However, we continue to believe that there is not—and never should be— disagreement between us on that principle.

I also do not believe there is disagreement between us on whether we oppose the policy of boycotts, divestment and sanctions against Israel. Opposing that policy is a long-standing Labour position, and it will not change. As I said to the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) a moment ago, it is something I feel so strongly about that I have taken the opportunity to debate with those who expound that policy and who believe in a one-state solution, which we thoroughly oppose. I have made the case that talk of a one-state solution and boycotts, divestment and sanctions against Israel offers no meaningful route to peace for Palestinians or Israelis. Over the past decade, the one bright spot on a very difficult horizon that I have seen on my trips to the middle east has been the co-existence and joint venture projects that have flourished, through which BDS drives a coach and horses.

We on the Labour Benches do not claim that all those who support BDS, despite our profound disagreement with them on that issue, are antisemitic. Our concern is with those who have tried to whip up hostility towards Jewish people under the cover of either BDS or the targeting of Israel, particularly those who seek the total economic, social and cultural isolation of the world’s only Jewish state. That is what we must deal with, in a way that is enforceable—that has real impact and real teeth—and that tackles the problem it is designed to solve.

[Dawn Butler (Brent Central) (Lab)]

Does my hon. Friend agree that we have worked hard to ensure that we are not antisemitic, and that for the Minister to display what he has done in the Chamber does no good to our democracy? This is a very badly written Bill—it is not a good Bill—and the Minister’s suggestion that anyone who votes against it is antisemitic is just a disgrace and something he should withdraw.

[Lisa Nandy]

This is a debate that needs far less heat and far more light, because we are talking about real people—about communities in the UK who are among the most marginalised and discriminated against in our country. I thank the Secretary of State for acknowledging in his opening remarks that Labour Front Benchers are acting in good faith in the approach we have taken, but I would echo a note of caution: we should not in any sense suggest that Members, of all parties in this House, who have expressed profound reservations about the Bill in front of us can be deemed to be antisemitic. They are not. They are participating in democracy and giving voice to real concerns. They are doing what we were sent to this House to do: scrutinise legislation and ensure that it has the intended impact. I encourage Members to continue to do so, because a Bill that is designed to promote and protect community cohesion can proceed only with the broadest possible consent.

[Joanna Cherry]

I thank the hon. Lady for what she has just said, because I also found the Secretary of State’s suggestion that those of us who oppose the Bill are condoning antisemitism, or are in fact antisemitic, to be disgraceful. Has she, like me, seen a public letter to the Secretary of State from a number of British-based Jewish academic experts in the fields of Jewish studies, the study of antisemitism and Israel studies, including my dear friend Professor Francesca Klug OBE, visiting professor of human rights at the London School of Economics? They have expressed the view that this legislation is damaging and wrong-headed and should be withdrawn. Will the hon. Lady confirm that that is a letter from leading British Jewish academics?

[Lisa Nandy]

I am grateful to the hon. and learned Lady for raising those concerns. We are keen that all the voices in this debate ought to be heard; I have heard different views from across the Jewish community, but I have to say to her that the overwhelming view I have heard is that there is a desperate need to tackle this very real problem. The strength of feeling in the Jewish community that we must legislate to tackle this problem is overwhelming. I do not want for one moment to deny that that is what I have heard in my frequent conversations with the Jewish community, but as I will outline, there are serious problems with the Bill that need to be addressed.

[Dr Matthew Offord (Hendon) (Con)]

I am grateful for the hon. Lady for giving way, and for the tone she has struck. As someone who has a significant proportion of Jewish constituents, I speak in defence of them. The BDS movement and its increased presence on university campuses has seen the Community Security Trust state that there has been a 22% increase in campus antisemitism. We are now in a situation where many of my constituents will not go to university because they face such hostility, so the enthusiasm for the Bill may not be about its drafting, but about the aims that it seeks to achieve.

[Lisa Nandy]

That is absolutely right. In fact, the Union of Jewish Students, which has expressed real concerns about the Bill—the very students who have often been the targets of the appalling abuse and attacks that the hon. Gentleman has outlined—is clear that it wants to see this problem tackled. I hope that is a basis on which we can proceed across the House in a debate that, as I have said, needs far more light and far less heat. I remain confident that, with good faith and good will on everyone’s part, we can find a way to tackle what is a very real problem for the Jewish community in this country.

I will take a moment to explain why the Bill does not do what the Government intend it to do. Clause 1 attempts to ban public bodies from taking decisions influenced by

“political or moral disapproval of foreign state conduct.”

We have commissioned legal advice that suggests there are two readings of the clause. I would just say to some Conservative Members that a King’s counsel—a distinguished King’s counsel who happens to disagree about the legal impact of this legislation—deserves a hearing and deserves respect. If in a democracy those who disagree with us are accused of acting dishonestly or in bad faith, we are in a very dark place indeed. That legal advice suggests that on first reading the clause applies only when it relates to specific territories. That would create the absurd situation where public bodies could refuse goods from China because of general disregard for human rights, but could not refuse cotton goods from Xinjiang because of concerns about genocide against the Uyghur population.

The second reading of the clause, which I imagine is what the Government intend, is that public bodies are banned from having any regard at all to human rights violations of foreign Governments unless they are expressly permitted by this Government. There are a few exceptions in the schedule referred to in clause 3—labour rights, bribery and the environment—but not genocide, as my hon. Friend the Member for Walthamstow (Stella Creasy) has said, or systematic torture or grave breaches of the Geneva convention. After the horrors of the second world war, it was British diplomats who held the pen, crafting the international legal system that recognised that some crimes are so grave that they should never be acceptable. What has changed that gives the Government grounds to create two tiers through this Bill—to deem slavery unacceptable, but remain silent on the issue of genocide? Have we given up believing that these things matter?

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

My hon. Friend is making a powerful speech. Does she share my concerns that the Bill will weaken our voice on the international stage in tackling human rights abuses? It will enable many regimes with appalling human rights records, or companies that have track records of labour law violations or environmental recklessness, to continue without consequence, including where those abuses are incompatible with international law.

[Lisa Nandy]

I thank my hon. Friend for raising that concern, which has also been raised with me. I defer to the Chair of the Foreign Affairs Committee, the hon. Member for Rutland and Melton (Alicia Kearns), who I know will make a contribution in due course.

What is not clear to me and other Labour Members is why the Government have sought to draw this Bill’s powers so broadly. It is not just breathtaking in its reach; it is deeply contradictory, because the Bill itself accepts that there will be times when public bodies will take a view about the conduct of foreign Governments on specific grounds, such as modern slavery. In fact, the Secretary of State wrote to councils last year urging them to do so in the case of Russia, and has since signalled his intent to add Russia and Belarus to the list of exceptions allowed by clause 3. Only two years ago in this House, I sat on these Benches as we proudly and rightly passed the Magnitsky regulations, which recognised the power of economic sanctions to direct state conduct and raise global standards. However, the Secretary of State is now proposing a Bill that will prevent—for example—the Department for Business and Trade from taking human rights violations into account when deciding whether to grant export credit guarantees. Surely he can see the problem. The Cameron Government became a signatory to the UN guiding principles on business and human rights a decade ago. The Government’s own action plan makes it clear that businesses have a corporate responsibility to uphold human rights and to monitor those they deal with commercially. After years of promising to hand over powers and spending decisions to Mayors, combined authorities and councils, is the Secretary of State seriously saying that they are not capable of exercising the same duty?

There are other areas of deep confusion in this Bill that we believe will open up the prospect of ongoing legal challenge, and I know that has been raised by Conservative Members. Clause 1 bans action that a reasonable observer would conclude is motivated by moral or political disapproval of a foreign Government, but on these deeply contested notions what constitutes a “reasonable observer”?

Clause 4 is even more problematic. It prohibits public bodies from expressing a view not just about how they intend to act, but how they would have done so had the law not been in force. It is difficult to know how public bodies, particularly those that are elected, should respond to this. In recent years, many councils have, for example, been asked by their own residents not to use Chinese companies with links to Xinjiang. My own council is one of them. Under this Bill, faced with thousands of people signing a public petition, a council would not even be able to give any indication of whether or not it agreed with its own residents. Our legal advice suggests that this extraordinary situation is likely to be incompatible with article 10 of the European convention on human rights.

Clause 3(7) creates even more confusion. It singles out Israel, the Occupied Palestinian Territories and the Golan heights as places for which no exemption can ever be made. The long-standing position of the UK Government is to support a two-state solution along pre-1967 lines that protects and respects the security and right to self-determination of the Israeli and Palestinian peoples. This clause drives a coach and horses through that, according the occupied territories the same protected status as Israel and in effect conflating the two. It contradicts established Government policy, and I find it hard to believe that the Foreign, Commonwealth and Development Office has agreed to this. I note the questions from two Conservative Members, and I am deeply concerned that it appears that the Government and the Secretary of State have not even asked that question. It appears that Conservative Members have seen a circular from Foreign Office officials raising objections to this Bill, yet the Secretary of State has not. I urge him to look closely at that matter before the Bill proceeds.

[Dr Whitford]

The hon. Lady talks about when she has visited Israel or Palestine, as I have done regularly with the breast cancer projects I am involved with in Gaza and the west bank. The thing is that the settlements are illegal under international law, and they have been condemned by the Government in the past. Obviously, companies, pension funds, councils and devolved Governments who try to act ethically and do not wish to purchase settlement goods, which are illegal, would be floored by that clause. How does that match with current UK policy?

[Lisa Nandy]

I hope, as the debate goes on, that there may be an answer to this, but I have to confess that so far I am at a loss as to what it might be. Where does this leave our commitment to international law, given that it cuts across UN resolutions, as Conservative Members have highlighted, and weakens Britain’s stated support for a two-state solution, as the hon. Member has said?

The legal advice we have received strongly suggests that this is likely to be in breach of our international law obligations. Furthermore, it will force the UK courts, which have traditionally been reluctant to adjudicate on issues relating to the Occupied Palestinian Territories, to take a view. All of these confusing and contradictory measures raise the very real prospect of protracted legal challenge. One of the Conservative Members recently called this woolly. Surely the Secretary of State can see that protracted legal challenge over the Occupied Palestinian Territories and the practice of boycott, divestment and sanctions would not be in the interests of community cohesion, which is the very thing this Bill is designed to protect.

[Dawn Butler]

Will my hon. Friend give way?

[Lisa Nandy]

I will not give way, if my hon. Friend will forgive me. A lot of people are wishing to speak, and given that she has made one intervention, I will make a bit of progress.

As if that were not bad enough, it seems that nobody in Government has thought of the consequences for local government pension funds, which is arguably the one area where councils have to have a global outlook. Let me give the Secretary of State a practical example. In recent months, as he will know, three Israeli companies have moved their money outside Israel due to concerns about the financial risks created by the contentious reforms to the judiciary. If a local government pension fund were to do the same, this Bill would open it up to legal challenge, forcing it to prove to a reasonable observer, whatever that is, that its decision was on financial, not moral grounds.

Writing in the Local Government Chronicle, the director of pensions at Westminster Council asks what happens

“where an analyst has anticipated that a company’s value will decrease because of ESG decisions it has made… if that strategy falls within the new law’s definition of not being in line with UK foreign defence policy, and the law therefore states that the fund must remain invested, and the fund therefore loses value, who will pay for that?... The government’s current message is that ‘this is not designed to get in the way of ESG factors, excepting the very narrow area of UK foreign or defence policy’. But this is absolutely not a very narrow area.”

He adds:

“We could end up in a scenario with never ending arguments involving ESG factors versus foreign and defence policy.”

Surely that cannot be the intention of this Government.

[Barry Gardiner (Brent North) (Lab)]

I think I agree with everything my hon. Friend has said this afternoon. She will remember, as I do, how many of us on the Opposition Benches, and indeed in all of the House, spent years of our lives campaigning against the apartheid regime. That was a very strong policy within local authorities and it had real impact at the time, so much so that when Nelson Mandela came to this country to thank people, he included them in those thanks. Does she believe that, had this legislation been enacted at the time, it would have prevented those authorities from taking the action they did to oppose apartheid?

[Lisa Nandy]

South Africa is obviously a different case, but the point my hon. Friend makes remains and is well founded, because this Bill concentrates the decision making and judgment of hundreds of public bodies in the hands of just one person.

[Kit Malthouse (North West Hampshire) (Con)]

The hon. Lady talked about pensions, and there is an additional point. Whatever people may think of BDS or of an investment strategy that is ethical or otherwise, the money that sits in the local government pension scheme—and I am a member of the local government pension scheme—is the members’ money, my money. It is not the Government’s money to direct in one way or another; it belongs to the pension holders, and it is surely for them and those to whom they delegate its management to decide how it should be deployed. As she rightly says, if the Government are getting into the business of managing my pension money and I lose money because of decisions made by the Government, presumably I should be compensated.

[Lisa Nandy]

This is precisely the question that the Government have yet to answer, but we hope that will be forthcoming during this debate. I would add to what the right hon. Gentleman said that the local government pension service is already under a fiduciary duty to take prudent investment decisions based on an assessment of the financial consequence of a number of matters, including environmental and social governance, and when it divests on the basis of non-financial factors, it should follow the Law Commission direction that any financial impact should not be significant and that the decision would likely be supported by scheme members. I am not sure what happens when a local government pension fund is taking decisions that would not be supported by scheme members. We are talking about the pensions of 6 million people in this country, and I think these are important questions that the Government must answer.

I want to turn to one of our chief concerns about this Bill, which is the concentration of the decision making and judgment of hundreds of public bodies in the hands of just one person and the implications of that for some of the most persecuted people in the world. There will be significant effects on the Uyghur in Xinjiang, who are suffering such serious crimes against humanity that the Biden Administration have recognised it as genocide. The Secretary of State will have read the impassioned letter from those groups in The Times about the effects of this Bill. Surely we cannot abandon them to their fate. For the Rohingya in Myanmar, for the Tamils in Sri Lanka and for countless others, the concern is that this bad law prevents not just economic action to uphold human rights everywhere, but solidarity with some of the most persecuted people in the world.

As was said earlier, the Bill goes further and clause 7 grants to the Secretary of State or other relevant body the power to issue notices requiring all information to be handed over, if they suspect that a prohibited statement expressing a moral or political view about foreign conduct is in the process of or about to be made, including information in subsection (8) that would normally be protected by legal privilege. Let me clear about the effect of that: this hands over to the Office for Students, the Secretary of State, and the Treasury, greater powers than those available to the security services. I know there are Members on both sides of the House who are deeply troubled by that, and those who are not should consider for a moment how they might feel about this Bill if their party was not in power.

We should not be here. We have long fought for legislation to tackle what is a real problem, and we are determined to give the Government the opportunity to do the right thing. That is why today we are proposing an alternative that allows the Government and this House to keep our promise to tackle a long-standing issue of deep concern to the Jewish community, but avoids tearing up our commitment to human rights, local democracy and free speech, in a Bill that does not even appear to tackle the very problem it seeks to solve.

[Richard Graham]

The hon. Lady has made a number of powerful points. She will have heard me question the Secretary of State about the fact that the Bill is not country agnostic; it is directed primarily at one country and one issue, which is BDS. The question for her is, in a way, the opposite of that, which is that this problem has come to be because of decisions made by Leicester City Council and Lancaster City Council, which are Labour-run councils acting arguably in cahoots with BDS. What does she think the Labour party can do to take away the perceived requirement to have a Bill that seems, at the moment, largely to argue against BDS’s actions against Israel?

[Lisa Nandy]

I listened carefully to what the hon. Gentleman had to say and I support it, but he should please not try to tarnish Labour Members with a record on antisemitism. There are those of us who stood up not just to those who are supposed to be our opponents, but to those who are supposed to be our friends as well. And we will always do that. I give my word, and I give our word on behalf of the Labour party.

As I am about to outline, we have provided the Government with an alternative. Earlier this year we sought to amend the Procurement Bill to ensure that no single country, especially in the cases that we have been describing and the world’s only Jewish state, can be singled out for different standards from others, and in doing so whip up hate and hostility against the Jewish community. It is a real problem. We provided the Government with a solution. They refused it, but we remain convinced that co-operation and consensus is the right approach to tackle what we accept is a very real problem.

Today, the Secretary of State will hear this refrain again and again from Members on his own Back Benches, and across the House: two important principles—the need to tackle racism and antisemitism, which are a scourge on our society, and the need to stand up for human rights, freedom of expression, democracy and our long-standing position on Israel and Palestine, and act in accordance with international law—and those things should never be seen as mutually exclusive or allowed to be pitted against one another.

We have a number of serious suggestions about the way that this problem can be tackled. We have outlined an alternative approach. We have provided the Secretary of State with a solution, and we urge him to take it. Otherwise, he should know that Labour Members will be compelled to vote against the Bill on Third Reading, as I suspect will significant numbers of his own colleagues. It is an outcome we should all strive to avoid. If a pledge to tackle division, around which there is broad consensus, was derailed by a combative approach and a Government who refuse to listen to the wide range of voices that have expressed their concerns, that would be a crying shame. With good will and good faith on the part of the Government, we can proceed together. We have proposed how. The ball is now in the court of the right hon. Gentleman.