Is the UK government the most Stalinist in Europe?

I have received a number of calls today from journalists about the apparent announcement later in the week about whether or not public bodies and councils should be able to invest in Israeli companies. In fact the situation is more more worrying than that. They are suggesting that we should not be able to invest ethically in any way.

I cannot speak for other bodies but I can speak for local government. There are a number of principles at stake here.

The first is one of basic local democracy. We have been given a mandate by the electorate in exactly the same way that the Government has. We put our beliefs to the test in the electoral crucible just as they do. In fact in many ways we are more accountable than the Government. If, for example, Liverpool decided to boycott Israel or anywhere else we would have to debate that in the council chamber and be held to account by our electorate. I have no doubt that in the case of such a debate I would be asked by our local Jewish community to account as to how I had voted.

Secondly we have to ask whose money is it? In practice councils themselves are highly unlikely to have investments in foreign countries or indeed in the stock exchange. We do, however, look after large amounts of money through our pension funds. In fact local government is the only large part of the public sector where pensions are largely funded and not met from current taxation. The government view is that this has been supplied by the public. That is partly true. Like any other employer some of the money for the pension is kept back from the wage and some put in by the employer. BUT once it is paid in it is not part of the public sector any more. It belongs to the members of the fund. It was part of their remuneration package and now it is all theirs. What happens to it is up to them not the Government. I will deal with that again later.

Lastly I believe local government should be coherent with both hands going the same way. We have the lead role for public health. Should we on the one hand have campaigns to deal with drugs, alcohol and tobacco and problems which are partly caused by them such as domestic violence, and then on the other hand invest in companies that produce them? Because Israeli investment is only a very small part of the government concern this is ban on ethical investing and not specifically about Israel. If I can decide where to and how to invest in my own pension why can’t local council workers.

There is however a democratic deficit within the pension funds. I have two small local authority pension holdings but no-one has ever asked me in either of them how I want my money to be invested. Those decisions are made by a small group of councillors acting as trustees through a local authority pension fund. Of course they are heavily guided by professional investors.

If we want to introduce proper democratic control of local authority pension funds the place to do this is at the bottom within  the funds involving their members.  Whitehall butting in and imposing a centralised dictat is a complete mistake. What one government can impose another government with different motives can reimpose or impose more of. This might at present be a small matter but could be a large one in the future.

This is a small matter. The local authority pension funds are well managed and they take into account all issues which affect their members investment. I hope they do a good  job because part of my income in retirement will depend on it. But I have no doubt that if asked how the trustees should invest their money the vast majority of local authority employees and ex employees would choose to invest ethically. But if they didn’t that’s their decision to make.

This government is a bullying government. It preaches localism and practices centralism. As a localist I defend local decision making and local accountability. I oppose the Stalisnism of this Government. I am appalled they intend to impose an autocratic decision which they have not put before their electors in any in any way. I will  fight their proposals to restrict the correct role of local government to the end.

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About richardkemp

Leader of the Liberal Democrats in Liverpool. . Deputy Chair and Lib Dem Spokesperson on the LGA Community Wellbeing Board. Married to the lovely Cllr Erica Kemp CBE with three children and four grandchildren.
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