Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Leigh of Hurley Excerpts

Committee stage
Wednesday 20th March 2024 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords—

[Lord Verdirame (Non-Afl)]

My Lords, Amendments 3 to 5 are in my name. All the amendments in this group have the same objective, which is to find some ways of mitigating the rather unusual and perhaps slightly sinister language of

“political or moral disapproval of foreign state conduct”—

the language that gives the provision its title. Amendments 1 and 2 seek to achieve that objective by retaining that concept but raising the bar for its application. I agree that this approach may be sensible, and it is one that I encourage the Government to consider very seriously.

My amendments go a little further. I tried to think of ways in which the main provision of the Bill—Clause 1 —could operate without the novel concept of a prohibition on

“being influenced by political or moral disapproval of foreign state conduct”.

I note that this is not an attempt to frustrate the Bill. As the Minister will recall, I spoke in support of the Bill at Second Reading and I support the Government’s intentions. I am suggesting this different way forward because I am not really persuaded that the policy objectives require us to introduce this concept in our legislation. I urge the Government to test more proportionate and more focused ways to achieve those objectives.

As I understand those objectives, the core purpose is to ensure that public bodies, when taking procurement or investment decisions, do not impose a de facto sanctions regime or a de facto ban or boycott on a foreign state on the basis of their own judgments about a territorial dispute, the status of a foreign territory or the presence of a foreign Government in a particular territory. It seems to me that that objective can be achieved equally effectively by focusing the duty in Clause 1 on not having regard to territorial considerations, rather than in the current formulation of a duty not to be influenced by political or moral disapproval of foreign state conduct. Subject to the exceptions, it would still be the case that if a public authority were to have regard to a territorial consideration, it would probably do so because of disapproval of a moral or political kind of the foreign state’s conduct in the territory. But it would be better if we can get to the result that the Government are pursuing without that language of political or moral disapproval of foreign state conduct.

I accept that a criticism of the proposals may be that if we remove that expression “moral or political disapproval” from Clause 1, as my amendments would do, and focus instead on territorial considerations, the main provision of the Bill would not substantially improve on Section 17 of the Local Government Act 1988.

The Bill would supersede the Local Government Act in the part where it prohibits local authorities from considering non-commercial matters in relation to decisions about public supply or works contracts, including

“the country or territory of origin of supplies to, or the location in any country or territory of the business activities or interests of, contractors”.

This part of Section 17 of the Local Government Act would be omitted by the effect of a separate clause in the Bill. But Clause 1, even with the amendment I propose, would still go further than Section 17. In particular, the duty not to have regard to foreign state conduct in relation to territorial considerations, such as the existence of a territorial dispute, would still be able to capture indirect bans or boycotts, which I understand is the Government’s main concern.

I look forward to what the Government have to say. Again, I stress that my main concern is to encourage them to think of ways of tightening the language in Clause 1, and mitigating or perhaps altogether removing this notion of

“political or moral disapproval of foreign state conduct”.

[Lord Leigh of Hurley (Con)]

My Lords, I apologise for my not being able to speak at Second Reading, although if I had, I would have agreed with my noble friend Lord Wolfson on much of what he had to say. I also apologise for slightly jumping the gun on the noble Lord, Lord Verdirame, particularly as what he said was so interesting and informative.

I just wanted to question Amendment 1. If one is seeking clarity and certainty, introducing the idea of having a

“primary or sole factor in the decision”

seems extremely difficult to prove, whereas showing that the decision was “influenced” is much easier and, as I understand it, a recognised legal term.

[Baroness Noakes (Con)]

My Lords, I have problems with all the amendments in this group. Amendment 1 in the name of the noble Lord, Lord Wallace of Saltaire, would elevate “political or moral disapproval” to be the sole or main factor, and the noble Lord, Lord Palmer of Childs Hill, wants to introduce the concept of materiality into influence. Both these would just create huge loopholes, which would allow public bodies to conceal their boycott activities within other factors. Clever lawyers would find ways of writing papers which support decision-making in, say, local authorities or other bodies affected by the Bill, by reference to a whole load of other factors, to support the claim that they were not “materially” influenced by their disapproval of a foreign state, or that it was not the sole or main factor. I genuinely have a problem with the watering-down implied by Amendments 1 and 2.

I listened very carefully to what the noble Lord, Lord Verdirame, said about his amendments. I understand that he is trying to find a way through by removing the reference to “political or moral disapproval”, but I am not convinced that his amendments work either. In particular, I am not sure what the restriction to “that territory” in his Amendment 4 will do. Let us suppose that the territorial consideration is Ukraine, because it has to relate to a particular foreign territory by virtue of subsection (3). Does that mean that the decision-maker must have no regard to what is happening in Ukraine itself? It seems to me that “that territory” can be related only to the territorial consideration referenced in subsection (2). In that case, it would be Ukraine. If, say, Russia is the foreign state you have a problem with, it seems that you can take account of its activities only in Ukraine. You could not take account of activities that were not in Ukraine—for example, attacks from other places, such as the Black Sea, or whether it takes children from Ukraine back to Russia. If you thought that Russia was the territory—still restricting it to one territory—you have the problem the other way around; you could take activities only in Russia, but not in Ukraine, which is the fundamental problem. That creates an interpretive problem.

While these distinctions might not matter if we are talking about Russia and Ukraine, if you try and then relate it to a council or other public body trying to boycott Israel, and relate that to the complexities of the different parts of the territory around the State of Israel, you may end up finding some odd conclusions on how the reformulation might work in practice. I am aware that the noble Lord, Lord Verdirame, is a very clever lawyer and I am not, and I may well have completely misunderstood how his amendment is intended to work.

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[Baroness Deech (CB)]

My Lords, I did not come prepared with examples about universities—my memory is not that good. However, there have been very many occasions where violence used by anti-Israel students has forced the university to cancel speakers or to charge Israeli and Jewish societies for their own security when an Israeli or a pro-Israeli speaker comes. There are manifold examples of this, and I have dealt with it over the years. If noble Lords do not know about this, they really should.

The comments that have been made by the noble Lords, Lord Mann and Lord Wallace, and the noble Baroness, Lady Fox, take us to the heart of the Bill and why the drafting is so difficult. What the Bill really means to do is clamp down on anti-Semitism in local authorities and universities, but it cannot say so in direct terms; therefore, it goes much more broadly than it needs to, because it is academically dancing around the subject. If I could rip it up and start again, I would have a couple of clauses saying that anti-Israel activity—anti-Zionist activity, if you want to call it that, or anti-Semitic activity—is prohibited in universities and public authorities, because there are no examples of universities and public authorities acting against Australia, to give a fanciful example. Is anyone banning Australian wine because of what happened to the Aborigines? Is anyone banning New Zealand lamb because of the way the Māoris were treated? Is anyone, anywhere, ceasing to use Chinese products? I need hardly go on.

[Lord Leigh of Hurley (Con)]

My Lords, I will add to this element of the debate, if I may, because I think it is relevant. The noble Lord, Lord Willetts, mentioned at Second Reading that he was on the council of Southampton University. I too am an alumnus of Southampton University.

In March 2015, the university procured the services of a speaker to host a debate questioning the right of Israel to exist. I do not know whether that would be caught by the Bill. I would hope that it is, but I suspect that it is not. I wrote to the vice-chancellor at the time—I had been a very modest donor to the university—and asked, going to the point made by the noble Baroness, Lady Deech, whether there had been any conference at Southampton University questioning the right to exist of any other country. He wrote back and said there had not. Eventually, the conference was cancelled—it received reprobation from the Communities Secretary at the time, now my noble friend Lord Pickles —only because the university claimed it could not go ahead on health and safety grounds. But that was a very thin excuse, and for a university to host a conference dedicated to questioning the right of the State of Israel to exist, and to procure the services of people to run it, is, I hope noble Lords would agree, what we should be addressing.

[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.

Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Leigh of Hurley Excerpts

Committee stage
Tuesday 7th May 2024 Lords Chamber

[Lord Hain (Lab)]

Since this has been raised—and I am not sure who I am intervening on—that was a long time ago. I do not withdraw the fact that there are many features of the State of Israel of which I am critical, not least in its dual citizenship law, where certain citizens are regarded as full citizens and others are not. That is a racist thing to be practising—but the noble Baroness suggested that I was questioning the right of Israel to exist. I have not done that, and I do not believe that, and she should not suggest it.

[Lord Leigh of Hurley (Con)]

My Lords, to bring us back to Amendment 19, I thought it was a probing amendment—but it seems that perhaps it is a serious one, given the endorsements of the noble Baroness, Lady Jones, and others, so let us think about it. I am querying it only because, if it comes back, it might allow the noble Lord, Lord Collins, to refine and consider it further.

I would add to the questions from the noble Lord, Lord Wolfson. For example, let us assume that there is an egregious gay rights violation in some country, and a local council gets very agitated about it, responds to pressure and announces that it will no longer do business with, or procure works or services from, this country, because it abuses gay rights. Under this amendment, it would then have to apply that to every country that does not fully respect gay rights, so if it wanted to buy product from the Middle East then the only place it could go to would be Israel.

[Lord Shipley (LD)]

My Lords, this has been an extremely helpful debate. As the noble Lord, Lord Mann, identified, there is a conundrum in the Bill. The Minister may wish to reflect on the discussion that has taken place. She said after the first group that she valued the expertise of this House and would go away and think about how the Government would respond. I took that to mean that they may make changes on Report, which is theoretically likely to come in about three weeks’ time, but may take longer.

I have concluded, having listened to so many opinions—I am not a signatory to Amendments 19 or 48, though I have huge sympathy with them—from my noble friend Lord Purvis of Tweed, the noble Lord, Lord Collins, the noble Baroness, Lady Jones, and others, that it would be useful if the Minister would consider trying to bring all those opinions together into one place to talk further. That is the only way in which progress on this Bill will be made.

I think that I heard the noble Baroness, Lady Noakes, say that you cannot have local authorities setting foreign policy. I do not think local authorities want to do so, are doing so or have any ambition to do so. However, they are concerned about human rights and doing the right thing in their procurement and investment policies. Nevertheless, the issue must be discussed.

I took Amendment 19 to mean simply that a statement of policy relating to human rights would need to be considered by those seeking procurement or making investments, and that the statement may not single out individual nations and would therefore have to be applied consistently, as has been confirmed. However, it would have to be in accordance with guidance published by the Secretary of State. I find the concerns we have been hearing against Amendment 19 unfounded. The only solution I can see to this is that the offer made at the outset by the noble Lord, Lord Collins, should be taken up by the Minister. It would be really helpful if that could happen, because otherwise the passage of the Bill on Report will get more and more difficult.

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[Lord Collins of Highbury (Lab)]

No, the noble Lord is not right. That is not what I said. We have guidance about specific investment in the Occupied Territories. That is what the Government issue now. Why is that so confusing?

[Lord Leigh of Hurley (Con)]

What, then, is the effect of proposed new subsection 4B(b) if not a blanket ban?

[Lord Collins of Highbury (Lab)]

Do you mean “must have regard to”?

[Lord Leigh of Hurley (Con)]

Proposed new subsection 4B(b).

[Lord Collins of Highbury (Lab)]

We currently have guidance on human rights and investment decisions. On other groups of amendments we will discuss the whole question of environmental, social and governance issues. When a public body is taking into account investment decisions, as a private company would, it takes into account those sorts of policies. We will come on to pension schemes in a later group. The problem we have at the moment is that this debate is on BDS but we are actually talking about ethical investment policies. No one is concerned about those issues when we have general debates about procurement and ethical policy. This comes down to specific targeting campaigns that are not to do with human rights.

I strongly defend the right of Israel to exist. I strongly defend the right of Israel to defend itself. Those two things go together. If a campaign of BDS is saying that Israel occupied territories in 1948—many of these campaigns talk not about 1973 but about 1948—I do not agree with that. Israel exists and has a mandate to exist. We must respect that, and I strongly believe in it. But when we come to human rights and investment policy decisions, the Government are more than capable of giving guidance on that, because they do so at the moment through the UN guiding principles, the Modern Slavery Act and all the other things that we have done. The Procurement Act even has paragraphs in it as well. So it is not impossible to have the sort of guidance that we are advocating in this amendment.

[Lord Leigh of Hurley (Con)]

I simply say that the noble Lord has criticised the wording and language of the Bill quite specifically. If this amendment is to be presented at a later stage, proposed new subsection 4B(b) does not work because it is a blanket ban.

[Lord Collins of Highbury (Lab)]

I am more than happy to discuss the wording of this amendment and this proposal. We are not advocating blanket bans. There must be a reason for a ban. The FCDO issues a list of countries that have human rights issues—some, such as North Korea, have very clear issues—but they are not all countries where you would ban engagement or investment, or say, “That’s the end of the road”. An ethical investment policy needs to look at a range of issues—basically, the ESG issues that we will come on to in later groups. I do not want to go through them now.