Campaign group wins right to challenge govt over LGPS divestments

Written by Theo Andrew
11/01/19

The Palestine Solidarity Campaign (PSC) has won the right to challenge a Court of Appeal ruling, which upheld the government’s right to restrict Local Government Pension Schemes (LGPS) from divesting, contrary to UK foreign and defence policy.

The decision, handed down by the Supreme Court, means that PSC can now appeal the Court of Appeal ruling, which would have originally restricted LGPS funds ability to divest from companies on ethical grounds.

In 2016, guidance issued by the Department for Communities and Local Government (DCLG) prohibited local authority schemes from divesting against foreign nations and UK defence industries.

In contrast, the government policy for private sector pension schemes, outlined in its response on trustee investment duties in September, is to “never exhort or direct private sector schemes to invest in a particular way”.

Bindmans LLP partner Jamie Potter, believes the decision is a significant one.

“If the Court of Appeal decision is allowed to stand, it permits the executive carte blanche to impose their own political perspective on the investment of citizens’ money.

“However, if PSC is successful in its appeal, the government will not be able to interfere in the ethical investment decisions of LGPS and their members.”

In June 2017, PSC challenged the DCLG’s policy, resulting in an Administrative Court ruling, branding its policy unlawful. This was then overturned by the Court of Appeal in May 2018.

In 2005, the Palestinian civil society called for a campaign of boycott, divestment and sanctions measures until Israel adheres to its obligations under international law. It is modelled on the successful South African anti-apartheid boycott of the 1980s.

Various local councils responded to the Palestinian call by passing motions to boycott goods from illegal Israeli settlements.

Commenting on the latest ruling, PSC chair, Hugh Lanning, said: “Everyone, including pension scheme members, has a right to heed the Palestinian call and peacefully protest Israel’s violation of human rights – it is their money being invested unethically.

“We look forward to once again challenging the government in court on this fundamental issue.“

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