The Blog

The Government's Proposal to Ban Ethical Boycotts Is an Attack on Local Democracy

The government may talk about its support for local decision making and devolution, but, its latest move, to ban councils, public bodies and student unions across England from boycotting unethical companies, flies in the face of its rhetoric.

The government may talk about its support for local decision making and devolution, but, its latest move, to ban councils, public bodies and student unions across England from boycotting unethical companies, flies in the face of its rhetoric.

Under the proposal, expected to be formally announced by Cabinet Office Minister Matthew Hancock later this week when he visits Israel on government business, all publicly funded institutions will lose the right to boycott goods and services from arms companies or Israeli settlements in the occupied West Bank. It would also ban local authorities in England and Wales from pursuing ethical investment policies.

The plan was first trailed last October on the opening day of the Conservative Party conference, when the Communities Secretary Greg Clark announced the measures as part of a plan to stop councils from supporting "politically motivated boycotts and divestment campaigns."

In justifying what is clearly an attack on free speech, Clark stressed that "Divisive policies undermine good community relations, and harm the economic security of families by pushing up council tax." Hancock supported him in adding "We will take steps to stop such outdated policies being pursued through procurement and pension policies."

Despite the hyperbole and alarmist rhetoric, there is no actual evidence to suggest that councils who support boycotts of any kind have either pushed up council tax or seen any measurable increase in community tensions. Of course, the reason for these proposals is nothing to do with concerns about council tax or community cohesion. It is about politics and shutting down dissent.

This is obvious from the initial Conservative Party press release that announced the policy.

Under the ridiculous sub-heading Dangerous Consequences of Hard Left policies, we were told that "The campaign against British defence companies risk harming Britain's export trade." In other words, central government believes that arms company profits are more important than local democracy.

This is one reason why there are campaigns all across the country calling for councils to disinvest from arms companies and those that fuel conflict. A lot of organisations, including Campaign Against Arms Trade, believe that public money should be used for the public good and that it shouldn't go to companies which profit from war.

There is one sense in which Matthew Hancock is correct. Local authority boycott campaigns are certainly nothing new, but this is no bad thing. Throughout the 1960s/70s over 100 local authorities decided to take the step of banning South African goods from their offices and schools.

In 1981 Strathclyde Council went one step further. It announced an end to pension fund investments from companies with South African subsidiaries and banned South African sports teams from its playing fields. The movement grew and Strathclyde was soon joined by Cambridge, Newcastle and Glasgow and most inner London boroughs.

One estimate suggests that by 1985 two thirds of the population lived in local authorities that supported the anti-Apartheid movement.

The Conservative party may have had a very dubious and inglorious record when it came to apartheid, but presumably Hancock wouldn't argue that any of these councils were out of touch with the public or on the wrong side of history? Presumably he wouldn't pretend that it resulted in higher taxes or social breakdown?

At present the rhetoric may be limited to baseless scaremongering about the impact of Israeli boycotts and disinvestment in arms companies, but in the long run these proposals could impact almost all campaign groups.

If we accept the premise that Whitehall should have the right to ban councils from setting their own investment and procurement policies, then the same regulations could easily be used against environmental groups calling for disinvestment from fossil fuels or health charities calling for an end to investment in tobacco.

The question is not even about what one thinks of Israel or the arms trade. At heart it is one of democracy. If the principle is accepted then it will reduce the opportunities for local people and campaign groups to lobby for and create change on their own doorstep.

Councils are meant to be free to make their own decisions when it comes to representing the interests of local people and responding to their needs. Surely, if Ministers like Hancock really believe in empowering councils and promoting local decision making, they should also allow local people to decide where their money is spent?

Andrew Smith is a spokesperson for Campaign Against Arms Trade (CAAT). You can follow CAAT at @CAATuk.