Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Grocott Excerpts

2nd reading
Tuesday 20th February 2024 Lords Chamber

[Lord Grocott (Lab)]

My Lords, I agreed with so much of what the right reverend Prelate has just said and I apologise if I repeat some of the points he made. My remarks about the Bill will focus entirely on Clause 3(7) and specifically on the Occupied Territories. I shall argue that these provisions in the Bill are contrary to UN Security Council Resolution 2334, as mentioned earlier. I shall argue that the clause perversely gives the illegally Occupied Territories special protection under UK law. I shall also say that the clause undermines British foreign policy, both in respect of the illegality of the occupation and the pursuit of a two-state solution.

On the UN resolution, the clause fails because it gives equal status, with no differentiation between Israel on the one hand and the Occupied Palestinian Territories on the other. Resolution 2334, endorsed by Britain and passed in 2016 by 14 votes to nil, with one abstention, could not be clearer. The resolution:

“Calls upon all States … to distinguish, in their relevant dealings, between the territory of the State of Israel and the territories occupied since 1967”.


As my honourable friend Wayne David said, speaking for the Opposition in the Commons, the Bill

“gives special protection to goods and services from both Israel and the Occupied Palestinian Territories. Moreover, it gives greater protection to illegal settlements in the OPT than it does to any other state in the world except Israel”.—[Official Report, 12/9/23; col. 132.]

That brings me to the point about UK law. It is surely perverse in the extreme to afford special protected status to Israeli settlements that UK Governments of both parties—not to mention the UN resolution—have repeatedly stated to be part of an illegal occupation. How can the Government on the one hand condemn the continued expansion of the settlements while on the other be passing a law that has the potential to help the settlements become more established and prosperous?

Indeed, it is worse than that, because the Government’s justification for the Bill is that it is not appropriate for public authorities to impose their own boycotts and sanctions, except where to do so is positively consistent with UK foreign policy. Well, what could be more positively consistent with UK foreign policy than refusing to indulge in economic activity that might help and sustain the illegal settlements? Sadly, this Bill, by giving special status to the Occupied Territories, goes one step further towards normalising the occupation, thereby making the two-state solution, which has been the consistent policy of UK Governments of all parties for decades, even more difficult to achieve.

Even before the horrors of the war in Gaza, the political prospect of achieving a two-state solution was getting ever more problematic. In April 2017 the International Relations Committee of this House published a report on the Middle East, which had this to say:

“On its current trajectory, the Israeli-Palestinian dispute is on the verge of moving into a phase where the two-state solution becomes an impossibility and is considered no longer viable by either side. The consequences would be grave for the region … If Israel continues to reduce the possibilities of a two-state solution, the UK should be ready to support UNSC resolutions condemning those actions in no uncertain terms. The Government should give serious consideration to now recognising Palestine as a state”.


I agreed with every word of that when I was on the committee seven years ago. I believe that its prognoses and forebodings are utterly relevant today.

There is another serious impediment to the two- state solution that it would be folly to ignore. We have long been aware that the Israeli Government under Mr Netanyahu has been pursuing a policy of settlement expansion, which makes the possibility of a two-state solution much more difficult to achieve. On 21 January this year, he made this policy explicit when he confirmed that he is a total opposition to an independent Palestinian state. He said:

“I will not compromise on full Israeli security control over the entire area west of the Jordan—and that is contrary to a Palestinian state”.


What a time this is to be debating a Bill which fails to distinguish between Israel and the Occupied Territories. It gives me no pleasure at all to say that this seems to be more in line with Mr Netanyahu’s policy than it is with UK foreign policy.

That is perhaps a big part of the problem with Clause 3(7). The truth is that this Bill from the Department of Levelling Up, Housing and Communities has one clause in it that deals with a deeply sensitive part of British foreign policy. Much of my speech has unashamedly been about British foreign policy. If we are to end in law the distinction between Israel and the Occupied Territories, we surely need to hear the views of the Foreign Office.

For obvious reasons, the Foreign Secretary has been intensely involved in the Middle East since his appointment. Earlier this year he said that Britain was ready to bring forward the moment when it formally recognises a Palestinian state. He went on to say that the Palestinian people would have to be shown “irreversible progress” towards a two-state solution. The Foreign Secretary in my view is absolutely right, and that makes me wonder what the Foreign Office thinks of this clause in the Bill. I have been around long enough to know that the Minister is unlikely to reveal anything about this in her wind-up, but to present a Bill to Parliament that includes a clause with reference to one of the most dangerous and tragic parts of the world is at best insensitive and at worst very damaging. I hope that the Government, even at this stage, will think again.

Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Grocott Excerpts

Committee stage
Wednesday 17th April 2024 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, in moving Amendment 10 I will also speak to Amendment 13 and the others in the group. I would particularly like to say how helpful I thought the amendments from the noble Baroness, Lady Noakes, were in helping us to clarify these very broad terms: public bodies and public authorities. I have just been looking back at some of the debates on the Human Rights Act 1998, during which then Home Secretary Jack Straw said that this was an extremely difficult area on which to find an exact definition; he decided to leave it to the courts for further definition.

One of the things we have to consider while discussing this is how much we do want to leave it to the courts, or to ensure that what it says in the legislation is a little tighter than what we have so far. The drafting of the Bill in so many areas is extraordinarily and dangerously loose. I thank the Minister for the letter she has sent me and no doubt others on the question of individual responsibility and personal liability. I am not sure that I entirely understood it; I showed it to one or two legal acquaintances, and they are not sure that they are much clearer than they were before. That perhaps shows some of the difficulties in which we are engaged.

When I first read this Bill, I noticed that it declared in its title that it was about public bodies, and that in Clause 2 it says it is about public authorities. As it happens, I got into the lift with another Member of this House, with whom I worked when he was a Conservative Cabinet Minister during the coalition Government. I asked him casually: “Tell me, do you think that a public body and a public authority are the same thing?”. He said: “Oh no, of course not. The definition of a public body is far narrower than that of a public authority”.

A Bill that starts by having one of these terms in its title, and then goes on to use the other term in the text, raises a number of questions. This morning I reread the impact assessment, which uses the terms interchangeably, by and large preferring “public body” to “public authority”. I worry about how clear those who drafted the Bill are about what they are doing. We then go into “hybrid public bodies”, which the impact assessment talks about, or hybrid public authorities. When I began to read through Lexis and try to understand some of the case law—in which a number of noble and learned Members of this House emerge as those who have made judgments on this—I discovered that functional public authorities and hybrid public authorities raise many of the questions with which we would have to deal, if and when this became an Act. The line between public and private functions for public authorities that are partly public and partly private is a very delicate one, and one on which litigation leaves much room.

We all know what core public authorities are, but hybrid public authorities are a very loose and broad entity. The Minister said on a previous occasion, in another context, that there were well over 100,000 public authorities. No doubt the definition, after a while, becomes extremely unclear. After all, Section 6(3) of the Human Rights Act 1998 talks about

“any person certain of whose functions are functions of a public nature”.

The question of how many functions need to be of a public nature, and how much that affects how they behave in other areas, has been contested in the courts on many occasions. Court cases have ruled that a privatised railway company, for example, is not a public authority, but that a privatised water company and, in a different case, a private provider of social housing are, for certain purposes, public authorities. Rulings have differed on whether private care providers to local authorities are public authorities.

The impact assessment and the ministerial letter refer to “cultural institutions” as coming within this. In the letter that came to us before Second Reading, the Minister talks about museums and galleries that receive significant amounts of public money. Amendment 13 is intended to probe what is meant by significant amounts of public money. I have suggested in that amendment that the bar should be put at 50%, as opposed to whether this was largely public or largely private with public aspects. A court case in 1999 found that the University of Cambridge—

[Lord Grocott (Lab)]

The noble Lord mentioned at one stage whether railway companies are public bodies. A train operating company, for example, is clearly not a public body when it is a private company, but if it goes bankrupt or has difficulties it gets taken over by the Government. If the Government then get it right in due course, it goes back to the private sector. Can bodies oscillate between the two categories? Is that a further complication?

[Lord Wallace of Saltaire (LD)]

I defer to my noble friends on that. Part of my concern about this law is that there will be a great deal of employment for my learned friends to be found in it, if it were to go through.

Indeed, that is one of the things which appears in the delegated powers memorandum, which says at paragraph 4:

“It is intended that the measures will be widely construed”.


Paragraph 12 says:

“The prohibition will apply to ‘public authorities’ in accordance with section 6 HRA 1998; however, interpretations of section 6 HRA 1998 can create uncertainty which means that the Bill may, including as case law evolves, capture a range of bodies that it was not necessarily intended to apply to. It may be necessary to put beyond doubt that certain bodies (that are outside the scope of the intention to ban public bodies from boycotts and divestments) fall outside the definition of ‘public authority’ for the purpose of the Bill”.


I hope that the lack of clarity of that is clear.

The impact assessment does refer to hybrid public bodies and suggests that it is concerned to prevent them pursuing political and foreign policy agendas, “including with public money”. I interpret that as meaning that such hybrid public authorities may perhaps not be allowed to pursue such agendas, including when they are using private money. That is a question that will concern a great many people, in particular the university sector, from which we have received further correspondence on this precise area.

The Minister has not told us enough about the broad last category, cultural institutions, and whether this includes theatres and orchestras on foreign tours, as well as museums and galleries—and why on earth museums and galleries are in there. That is another area where I suspect that sector would prefer a little more certainty.

Universities have been particularly concerned about the impact on their international partnerships, which are, I am assured by my university friends, part of their private functions. Some of these are education partnerships, some are transnational research partnerships —I declare an interest, in that my son is actively engaged in this—and some are with foreign companies and donors. They can be very sensitive and can raise reputational problems, as some universities, including the one I used to work for, have learned to their cost. Again, it would be helpful if we had more detailed guidance on that.

At several points in the impact assessment, and in the memoranda to the Delegated Powers Committee and others, the Government emphasise the importance of ensuring the coherence of British foreign policy, and that it should not allow others to conduct their own foreign policy agendas. I notice the Express reported the other week that the Government have signed immensely valuable trade deals with Washington state and Texas. It seems an interesting contradiction for the British Government to insist that subordinate entities within the UK state should not be allowed to engage in any sort of deal with other countries while they actively attempt to get past Washington to deal with American states. I am not sure whether these are significant trade deals or not; I have the memorandum of understanding with the state of Washington and it seems rather less substantial than the Daily Express suggests.

The Minister may be thinking that precision does not matter so much in the Bill because it is intended to be largely performative and not to lead, in practice, to any serious enforcement. After all, the impact assessment notes how little boycott activity there has so far been beyond discussion, and the Bill is unlikely to be implemented before the coming election. However, we should not be in the business of permitting the Government to put badly drafted law on to the statute book for show. We need much greater clarity, and I look forward to what the noble Baroness, Lady Noakes, will say about the need for clarity in this area. The Minister shares with the House the responsibility to ensure that the Bill does not become an Act without much greater clarity about its terminology and the extent of its reach over the UK’s public and private bodies. I beg to move.