Public Service Pensions and Judicial Offices Bill [Lords]

Robert Jenrick Excerpts

Report stage
Tuesday 22nd February 2022 Commons Chamber

I very much look forward to hearing the Minister’s response to the various issues that I have raised today. Although we have some outstanding concerns with the Bill, which I have outlined, we do broadly support what the Government are attempting to do and we recognise the need to put the remedy in place as quickly as possible.

[Robert Jenrick (Newark) (Con)]

I rise to speak to new clause 1, which is in my name. The new clause empowers the Secretary of State to issue guidance to authorities that administer public sector pensions schemes that they may not make investments that conflict with the United Kingdom’s foreign and defence policy.

The new clause will resolve a long-standing issue that arose out of the Public Service Pensions Act 2013 and the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016. The issue was whether the Secretary of State had, under their general power to issue guidance provided under the 2013 Act, the ability to guide those who administer pension schemes, particularly local government pension schemes, away from making investment decisions that were contrary to the United Kingdom’s foreign and defence policy.

In 2020, the Supreme Court found by a split decision that the 2013 Act did not confer on the Secretary of State the necessary power to issue that guidance. The purpose of the new clause is to change that by explicitly laying out in law the Secretary of State’s power to offer the guidance to administrators of pension schemes within the public sector, including the local government pension schemes, that investment decisions—by which I mean both investments into a position and divestments from a position—should not conflict with UK foreign and defence policy.

There are multiple reasons for doing that. First and foremost, public service pension schemes that are paid for by the taxpayer by one means or another and underwritten by the state are clearly the preserve of the UK Government and, as such, it is perfectly legitimate that the UK Government have a say in regulating how public pension schemes manage the money that is provided to them by we the taxpayers of the country.

[Peter Grant (Glenrothes) (SNP)]

May I just probe the right hon. Gentleman’s last point a wee bit? My bank account is stuffed full of what was previously taxpayers’ money. Neither I nor my wife have had any significant income for years that did not come one way or another from the taxpayer. Is he suggesting that the Government should have some say as to how the bank can invest my money to make sure that I get it back when I need it? Is he suggesting that the private pensions that I am lucky enough to have should be subject to Government direction as to where they do and do not invest?

[Robert Jenrick]

I shall come on in a moment to my own personal views with respect to boycott, divestment and sanctions, but this new clause has no bearing on the actions of private citizens. This is about public sector pension schemes. The broader issue, which I will mention in a moment with respect to tackling BDS within public institutions and the public sector, is all about the public sector; it is not about limiting the freedom of speech or action of the individual.

[Dr Matthew Offord (Hendon) (Con)]

Will my right hon. Friend give way?

[Robert Jenrick]

I would like to make some progress, but I will give way.

[Dr Offord]

Is my right hon. Friend aware that, only this morning, Hertfordshire County Council was considering a petition submitted by individuals to ask it to divest from its pension scheme? Does he agree that it is the responsibility of elected representatives to ensure that pension schemes have the best and most profitable outcome to allow the members of that pension scheme to receive the best possible income?

[Robert Jenrick]

Yes, I do, and I will give some other examples of local authorities considering the same actions that my hon. Friend describes.

The argument that I wish to advance is that, for too long, we have seen public pension schemes pursue pseudo foreign policies.

[Andy Slaughter (Hammersmith) (Lab)]

Will the right hon. Gentleman give way?

[Robert Jenrick]

I will make a bit of progress and then I will return to the hon. Gentleman.

All too often, the foreign policy of these public pension schemes is, I am afraid, exclusively focused on re-writing the UK’s relationship with the world’s only Jewish state, Israel.

[Christian Wakeford (Bury South) (Lab)]

Will the right hon. Gentleman give way on that point?

[Robert Jenrick]

I will come back to the hon. Gentleman. I appreciate his interest.

The latest example of the politicisation of public pension schemes is by Wirral Council, which is currently considering realising almost £5 million-worth of investments in seven companies. This pet project of a small minority who seek to hijack the money of hard-working taxpayers for their own political ends is of no interest to the public pension scheme holders of the Wirral, or indeed, I suggest, to the public pension scheme holders and rate payers of Hertfordshire.

The politicisation of public sector pension schemes, such as that seen by Wirral Council, is also to the detriment of the UK Government’s relations with states abroad. Supreme Court Justices Lord Arden and Lord Sales established in their judgments that, because the schemes are managed by councils that are part of the machinery of the state, receive taxpayer funding and are underwritten by state regulation outlined in the 2013 Act, they are liable to be identified with the British state. It is perfectly reasonable for an individual, an organisation or a nation abroad to look to these decisions and believe that they are the British state’s intentions. It would be wrong that, owing to a minority of an extreme and well-organised clique, the UK Government’s relationship with an ally has the potential to be undermined. Ultimately, central Government must reclaim their constitutional responsibility for the conduct of the UK’s international affairs. It is for this House to be the place in which those decisions are debated, as I am sure we will see later today. Public service pension scheme trustees must return to their primary duty of achieving maximum returns for scheme members.

[Andy Slaughter]

The right hon. Gentleman said earlier that this is public money. He will be aware that the Supreme Court, in making a judgment on the previous guidance, specifically said that it is not public money when it is employee or employer contributions; it comes from the rightful employment of the employees themselves. Why does he think that his new clause is different from that? As he has gone on to the specifics, while I am not talking about BDS here, does he think there is a possibility that decisions on investments, say, in illegal settlements, which the Government advise against on economic grounds, could also be caught by his new clause?

[Robert Jenrick]

The hon. Gentleman makes an important point. The Supreme Court raised two central arguments. One was whether the 2013 Act explicitly gave the Secretary of State the power to issue guidance with respect to investment decisions that conflicted with UK foreign and defence policy. The second point that some Supreme Court Justices raised was whether it was within the remit of the Secretary of State to speak to all public service pension schemes, including those that are funded and unfunded, particularly the Local Government Pension Scheme.

This new clause explicitly provides the Secretary of State with the power to issue that guidance. Were it to pass, and were this ever to be litigated and reach that court, I expect that the Supreme Court Justices would see clearly the intention of this House, which is that the Secretary of State should be able to issue guidance and that that guidance should be applicable to all public service pension schemes. I hope that answers the hon. Gentleman’s point, which is an important one for us all to be clear on if the new clause is passed.

The new clause does nothing to stop private individuals making individual choices about their consumer habits. They remain at liberty to invest in or divest from, purchase from or boycott whichever companies they wish and for whatever reason they so choose. It does, however, make a distinction between the liberties of the private individual and the obligations of public bodies in receipt of public money, and it is grounded in the principle that public money should be spent in accordance with the wishes of the UK Government as expressed by this House.

[Christian Wakeford]

I am one of those fortunate Members who sit on a local pension board. One of the issues that is often feared, particularly by smaller Jewish communities, is that, rather than focusing on community cohesion, it is about bringing in foreign policy matters that often bring division, when they really want to be settled and to be able to progress and thrive within their local community. Does the right hon. Gentleman agree that the worst thing that could happen would be for the BDS movement to have a say within pension boards and pension funds, and that the best thing we could do is to accept this new clause and bring stability to Jewish communities across the country?

[Robert Jenrick]

I am grateful to the hon. Gentleman for his support for this new clause, as I am to all those hon. Members across the House who have indicated theirs, and for his long-standing interest in the issue. He makes an extremely important point.

Let me be clear: it should not be assumed that someone expressing their support for Palestine is antisemitic. Of course that is not the case. Many are genuinely moved by the cause of Palestinian statehood and are concerned at Israeli settlements and the actions of the Israeli Government. It is the policy of this Government to pursue a two-state solution. However, one does not have to look very hard to find a pattern of antisemitic behaviour in connection with campaigns promoting a boycott of Israel.

Successive studies have shown that the single best statistical predictor of anti- Jewish hostility is the amount of BDS activity, which comes as no surprise when one inspects the ethical inconsistency within the movement. Why does its concern for humanity, and for the welfare of Muslims in particular, expire at the Jordan river? The BDS movement is mute on neighbouring Jordan or Lebanon, where the Palestinian minority really are second-class citizens, and fell silent when thousands of Palestinians were killed at the hands of the murderous Assad regime.

There has been no call for a boycott of ICICI Bank in response to the egregious human rights abuses being committed against Muslims in India, or for divestments from Huawei following the verdict by an independent tribunal in London that a genocide is being committed against the Uyghur Muslims. That selective concern for humanity, and specifically for the welfare of Palestinians, poses some alarming questions. Why is Israel held to a higher standard than every other country in the world?

[Andrew Percy (Brigg and Goole) (Con)]

rose—

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[Stephen Crabb (Preseli Pembrokeshire) (Con)]

rose—

[Robert Jenrick]

I will give way to my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) and then to my hon. Friend the Member for Brigg and Goole (Andrew Percy).

[Stephen Crabb]

My right hon. Friend is making a powerful speech and I commend him on how he has gone about bringing forward this new clause to close a specific loophole on public sector pensions. In the context of his point about the wider boycott, divestments and sanctions movement, does he agree that it is a pernicious movement that singles out Israel time and again, to undermine the UK-Israel bilateral relationship and the very notion of the integrity of the Israeli Jewish state? I very much hope the Government will accept his new clause, but does he also accept that there is a need for a broader piece of work by the Government to address the BDS movement in its entirety when it comes to public sector choices?

[Robert Jenrick]

My right hon. Friend makes a series of powerful points, which I entirely agree with. In particular, I agree that, were this new clause to pass, it should merely be the beginning of a wider effort to tackle BDS within the public sector and that we as the Government should make good on our manifesto commitment to a full BDS Bill, which I hope will be in the forthcoming Queen’s Speech.

[Andrew Percy]

My right hon. Friend is making an excellent speech. The founder of the BDS movement is, of course, somebody who denies the right of Israel to exist—an antisemitic act in and of itself, given that Israel exists in international law. My right hon. Friend says that BDS is the biggest single indicator of antisemitism in this country; I take him back to last year, where we saw the highest number of incidents of antisemitism ever recorded in the UK. The biggest month for those was May last year, following the flare-up of the Israel-Gaza issues. That is a worrying trend, and one that is in part promoted by those who do exactly as he says: single out Israel for treatment they do not apply to other countries and support the BDS movement. That is why we must see this new clause passed and why the Government must move forward quickly on those other issues.

[Robert Jenrick]

I am grateful to my hon. Friend for his intervention and for the work he does on antisemitism. He is absolutely right that we cannot stand idly by and see levels of antisemitism in this country continue to rise. We must take every opportunity to tackle the issue, and this is one way that we can do so—there are many others. None of us wants to see month after month pass with the Community Security Trust reporting ever higher numbers of egregious antisemitic attacks in this country.

I will make two final points. First, the BDS movement does absolutely nothing to advance the cause of peace. It is because it sees Israel as a colonial endeavour that it views the Israel-Palestine question as an insurmountable framework of conflict between the occupiers—in their eyes—the Israeli Jews, and the occupied—in their eyes—the Palestinian Muslims. That is why it apportions blame for the conflict entirely at Israel’s door and denies the agency of other actors such as Hamas and Hezbollah, both of which we as a country have rightly chosen to proscribe. The sad reality is that many who practise BDS have no intention or interest in brokering a two-state solution.

[Scott Benton (Blackpool South) (Con)]

My right hon. Friend is making an excellent speech and I commend him on tabling this new clause. Does he agree that the BDS movement has consistently opposed efforts from Israelis and Palestinians to negotiate a peaceful settlement? He referred earlier to Wirral Council and its pensions committee; does he agree that it would be entirely inappropriate for a local authority to be judge and jury on such complex matters as where businesses should and should not invest in contested territory in the middle east?

[Robert Jenrick]

I agree strongly with both my hon. Friend’s points. On his second point, the motion before Wirral Council is to ask its pensions officer to be the arbitrator of which business it should or should not be investing in within Israel and within settlements. Pity this poor individual, who, instead of going about his normal work as a respectable, hard-working local government officer, must suddenly spend hours, days, weeks or months attempting to understand the intricacies of the Israel-Palestine question and provide advice to a committee of local councillors. It is frankly an absurdity and an abuse of that individual. We should not be seeing this. These questions should rightly be taken forward by the United Kingdom Government.

BDS is ultimately yesterday’s war. In the middle east today things are rapidly changing, and thank goodness for that. As a result of the Abraham accords, we see Arab nations—Gulf states—coming forward to recognise the state of Israel and work with it through science, technology, education and commerce. If Bahrain, the United Arab Emirates, Jordan, Egypt and other nations can do this—even those countries, such as Saudi Arabia, that have not explicitly recognised the state of Israel but are none the less working with it on security matters and other issues—then we as a country should not be tolerating this kind of activity, and certainly not within the public sector. I urge hon. and right hon. Members across the House to support the new clause. I am grateful to the Government for indicating their support. I hope that in the Queen’s Speech later in the spring we will see a wider BDS Bill that makes the UK one of the first countries in the world to really grapple with this issue.

[Peter Grant]

As I said on Second Reading and in Committee, the SNP supports the intention behind this Bill and we will support it on Third Reading. The intention is to clear up a mess of the Government’s making. I also repeat that, as I said in Committee, I do not have any doubts at all about the sincerity of the Ministers who have led for the Government at various stages of the Bill. I am convinced that they want to get it right and to finish up with an Act that is as fair to everyone as it is possible to be. However, my concern with the Bill currently before us is that even after the Government’s amendments are added in, sizeable numbers of current or former public sector employees will lose out. Given where we have been forced to start from and the scale of the mess that the Government made of this previously, I am not sure that it would ever be possible to produce a Bill that would be fair to absolutely everyone, but the Bill as it stands can still be improved. To that end, we will support such amendments as Opposition Front Benchers want to press to a vote, particularly new clauses 8 and 9.

One of the issues I raised on Second Reading has certainly come to pass: the extraordinary number of amendments the Government had had to table to their own legislation during its passage through the House of Lords. We now know that including the 61 amendments they tabled in Committee and the 28 further amendments tabled today, by the time the Bill gets its Third Reading later on the Government will have had to amend their own legislation no fewer than 212 times. In fact, Members who attended the Bill Committee will have seen the spectacle of the Government tying themselves in knots trying to remove two entire clauses from the Bill and replace them with two entirely new clauses. It was only the speedy intervention of the Clerks and the Chair that prevented the Government from presenting us with a Bill that had all four clauses included despite the fact that some of them were completely contradictory to the others. Eventually the Government had to whip their own Members to vote down two clauses that the Minister had already moved, presumably by mistake.

That incident served only to highlight what many of us on the Opposition Benches have been saying from the beginning—that the Government still cannot reassure us that they are genuinely fully in control of this Bill. I worry that they are very quickly running out of last chances to put it right. There is still a danger that the Bill that receives its Third Reading later today will have flaws and weaknesses that neither the Government nor anybody else have spotted yet. Most of today’s Government amendments are part of the process of picking up flaws or ambiguities in the original Bill, and we will not oppose them. We have some concerns about new clause 7, which provides for a lessening of parliamentary scrutiny in some cases. The Minister has not yet convinced me that that is an appropriate thing to do. I hope that when he winds up he will explain why new clause 7 is appropriate and why, in some cases, parliamentary scrutiny should be diluted in any way.

As I indicated earlier, we will support new clauses 8 and 9 in the name of the hon. Member for Hampstead and Kilburn (Tulip Siddiq). New clause 8 would provide a means of compensating scheme members who, through no fault of their own, stand to lose out as a result of the Bill. The Bill rights a wrong for a very large number of people in public pension schemes but goes in the opposite direction for some, and we should not forget about them. The new clause does not commit the Government, or indeed the scheme employers, to any additional expenditure, but it would require the Chancellor of the Exchequer at least to recognise that this is an issue and to look at whether there are realistic and reasonable ways of resolving it.

New clause 9 would require the Government to review how the Bill operates in the real world—as opposed to the assessment, as with any Bill, before discussions on it began—with regard to equalities. Given how many substantial changes the Government have already had to make to the Bill, it is prudent to accept that, once it comes into force, it might have consequences that the Government have not foreseen, which the new clause would attempt to protect against.

New clause 1, in the name of the right hon. Member for Newark (Robert Jenrick), is a different matter altogether, and the SNP is minded to oppose it. We have heard some of the arguments in favour of it—they are similar to comments made on Second Reading—which simply do not wash. I will not get into an argument now about the BDS movement. If the Government genuinely think that that organisation is a threat to peace and stability in the middle east or elsewhere, they could bring forward legislation to address it—they have had over two years of this Parliament to do so, and they still have time—but this is not the Bill for that.

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[Peter Grant]

I certainly cannot agree with the right hon. Gentleman. As I have made perfectly clear, how the British system works is that Ministers have the authority to take policy decisions, and Parliament is right to hold Ministers to account for that. Parliament has the ultimate right to decide what becomes law. If nobody else is allowed to discuss it, and councils are not allowed to express views in the interests of the people they are there to represent, the whole system starts to fall flat on its face.

It is as plain as the nose on my or anyone else’s face that decisions on foreign policy can easily have a disproportionate impact on residents in some parts of these islands. Certainly, decisions on defence policy can have a significantly greater impact on some places than others. Remember that councils are directly democratically elected by local people to represent their views. Are we suggesting that they should not be allowed to debate matters of foreign policy simply because they do not have the right to take the final decision? If that is what Government Members are saying, why is it that almost every Tory MP who pops up on their hindlegs at Prime Minister’s questions to ask a planted question invites the Prime Minister to interfere in local democratic decision making? We have had two examples today, with the right hon. Member for Newark expressing his views on possible decisions by councils that, with respect, are nothing to do with him, because they are not the council area he represents.

I do not know whether Wirral Council or Hertfordshire will take the right decision, but I am happy to trust the good people of the Wirral and Hertfordshire to sort out councillors who get it wrong too often. That is what local elections are about. I do not like to see the Government, having substantially stripped back the powers of local authorities, then deciding to give local authorities the power to take decisions they agree with, but taking away the power for local authorities to do things that might go in a different direction.

Among all this, we are losing sight of the vital fact that as a matter of law, the trustees of a pension fund are a completely different organisation and a completely different entity in most cases from the organisation whose current and former employees are members of that fund. My wife has for many years been a trustee of the Fife Council pension fund, as well as having clocked up nearly 30 years as a councillor. The decisions that the trustees of the pension fund make are completely different from the decisions many of the same people will take as members of Fife Council. Nobody believes that the decisions of the pension fund reflect the views of the council; the council is not allowed to try to whip pension trustees, for example.

[Robert Jenrick]

Will the hon. Member give way?

[Peter Grant]

I will give way once more, but I am aware of the time.

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[Robert Jenrick]

As a matter of law, what the hon. Member is saying is not correct. Pensions within the public sector, as elsewhere, are regulated. They were regulated by the Public Service Pensions Act 2013, and they will be regulated by this Bill. He has been speaking for more than 15 minutes, and it is not clear to me whether the SNP is in favour or against BDS. It is important that he makes clear his position.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am keen that we do not just have a whole debate about BDS. I want the amendments to be addressed, and there are a few other speakers trying to get in.