Agenda item

Question (a) Ajay Makan to Cllr Diarmaid Ward, Executive Member for Finance & Performance:

 

What steps has The Council taken to engage with Barclays about the bank's investments in and provision of loans to companies complicit in the Israeli state's violations of human rights and international humanitarian law in the West Bank and Gaza, what has the outcome of this engagement been and If this engagement has not led to firm commitments by Barclays to end its relationships with these companies, will The Council commit to tendering for a new banking provider to take over from Barclays at the end of the council’s current contract and make a public announcement to this effect so that Islington sets an example that other local authorities might follow, what would be the penalties for ending the contract with Barclays early?

 

Response:

 

Thank you for your question, Ajay. I share your concerns about Barclays investment practices.

 

The Council has engaged with Barclays Bank on multiple occasions over the last two years, including meeting with the Chief Executive in 2023, and challenging their positions on fossil fuel investments and raising concerns over their environmental record. This has contributed to some positive change, with Barclays committing to halting new investment in some of the most harmful fossil fuel projects, such as tar sands.

 

The Council will seek to begin procurement for a new banking contract in 2025. As part of this process, a working group is being established to draw up tender documentation and evaluation criteria for this procurement to ensure that being an environmentally and ethically best in class bank will score highly. It is also important to include mechanisms for holding banks to account when they renege on their promises or do not deliver in this area. The Council must do this legally, by following public contract regulations which restricts what Councils can and cannot do during procurement.

 

This is a lengthy process that takes approximately 18 months from start to finish to conclude, including any required implementation for any new partner. This implementation is highly complex due to the integration of the Council’s bank into crucial services and back-office functions. As such even if the Council was free to end its contract with Barclays tomorrow, it would not be able to change provider quicker than in that time.

 

The Council will incorporate the most robust criteria possible around social value (including the record on climate and ethical practices) as part of its scoring process. Regardless of who the Council chooses to provide our banking services, it is vital that Barclays do more to address climate concerns. We will continue to ensure that our own ethical procurement strategy doesn’t include procuring goods and services by oppressive regimes. Thanks again for your question.

 

Supplementary Question:

 

Would the procurement process exclude any bank that funds investing in companies that supply arms to Israel, if legally possible to do so? And will you publish any legal advice received?

 

Response:

 

Yes, I will seek robust legal advice and if possible, we will do that and publish the advice received.

 

 

Question (b) Esme Waterfield to Cllr Diarmaid Ward, Executive Member for Finance & Performance:

 

How much of the pension fund managed by Islington Council is invested, directly or indirectly, in companies complicit in violations of human rights and international humanitarian law in the West Bank and Gaza, Will you commit to disclosing the fund's investments in full and, if any are found to be complicit, initiating the process of divestment immediately?

 

Councillor Ward invited Councillor Convery, the Chair of the Pensions Committee, to respond.

 

Response from Councillor Convery:

 

We've had some correspondence over recent months, and your inquiry is indeed well-timed.

 

Last December, at the council meeting, a question was raised regarding whether the pension fund had any investments in companies identified by the Office of the United Nations High Commissioner for Human Rights (OHCHR) as having commercial interests in the illegal occupation of Palestinian territories. At that time, and continuing to the present, we confirmed that there were no directly owned investments in any of the companies listed by the UN body. I was assured that a due diligence exercise would be conducted against the latest list of UNHRC-listed companies, updated and ratified in July 2023, to ensure that there were no indirect holdings in any such companies.

 

By "indirect," I emphasise that our holdings are spread across hundreds of companies through arms-length or pooled funds. We own a small fraction of very large funds, which in turn invest in company equities, debt, and other financial instruments. Therefore, we do not directly own shares in these companies and cannot buy or sell them; only the external fund manager has that authority. Over the past few months, we have closely interrogated the fund managers of these pooled vehicles to identify whether they hold shares in companies listed by the UN body. We have identified 10 such companies, currently valued at £2.6 million, which represents a very small proportion—0.14%—of the pension fund's total value of £1.8 billion.

You may also be aware that, until recently, there was impending legislation, the Economic Activity of Public Bodies (Overseas Matters) Bill, which could have obstructed any attempt by authorities like ours to divest from these companies. We debated that legislation in this chamber last year, expressing our opposition. We were advised by a consultant that any divestment could potentially violate the bill's provisions once enacted, and it would do so retrospectively.

 

However, with the dissolution of Parliament six weeks ago, that bill effectively died, and with the formation of a new Labour government last week, there is now, in my view, no possibility of such legislation being introduced in Parliament in the foreseeable future. The new Attorney General, Richard Hurrah KC, stated that the bill would have had, and I quote, "a profoundly detrimental impact on the UK's ability to protect and promote human rights overseas."

 

Therefore, I believe there is no longer any major legal block to this council's divestment. Although there are some other legal, financial, and regulatory hurdles, I am confident these can be cleared. I will present a report at the next quarterly meeting of the Pensions Committee later this month to begin the process of divesting the pension fund from all those identified companies.

 

Supplementary Question:

 

Can you ensure that the commitment to divest is made public and that all relevant information, including a more comprehensive list of companies beyond the UNHRC list, is disclosed to the public?

 

Response from Councillor Convery:

 

The Pension Committee would be making the decision later this month. We committed to taking legal and technical advice to ensure full compliance, aiming to be as thorough as possible. There were a few essential tests that needed to be met, including confirming support from the members of the pension fund and ensuring that there would be no significant financial detriment to the fund because of this action.

 

While our goal is to run an ethically sound pension fund and use our investments for good, our primary responsibility remains to the members of the scheme, ensuring that all liabilities and expectations are met. On behalf of the entire Council, I express our horror at the violence inflicted on the people of Gaza and our belief that Israel should stop the unfolding humanitarian catastrophe. The Council had called for an immediate ceasefire, an exchange of hostages and prisoners, and expressed support for a two-state solution.

 

We recognised the moral imperative to disassociate our pension fund from companies supplying Israel with the capability to conduct its present war, including defence manufacturers like the U.S. Caterpillar company, known for building military bulldozers used in the conflict. However, we emphasised the need for a legal framework to identify such companies with certainty, using the methodology applied by the UN body. This is an evolving debate, and we believed we were among the first local authorities in the country to take this step, aiming for clear and specific divestment criteria.

 

 

Question (c) Paula Feehan to Cllr Rowena Champion, Executive Member for Environment, Air Quality & Transport:

 

If the British population ate meat-free lunches on weekdays, improved health could save the NHS as much as £2.2B a year and we’d see 11,000 fewer cases of Type 2 Diabetes and 366,000 fewer cases of cardiovascular disease. In addition, if we implemented meat-free defaults in public catering, we could save the NHS £74M a year. Plant-based meals have the lowest environmental impact in terms of greenhouse gas emissions, water use, land use, and pollution, delivering significant health benefits to the planet and our community. 30 towns and cities have endorsed the Plant-Based Treaty, and many are developing Plant Based Treaty action plans to promote and encourage people to eat plant-based foods. Exmouth is transitioning catering at climate meetings and events to 100% plant based. Haywards Heath is building a test case for 100% plant-based catering at events. Edinburgh is trialling carbon labelling in schools and universities, and Lambeth is delivering public information campaigns. In Amsterdam, the city has pledged vegan Fridays in all public institutions. The Chair of the London Assembly’s climate committee has called for a Plant Based Treaty for London. Will Islington become the second London Borough to endorse Plant Based Treaty and develop an action plan?

 

Response:

 

Thank you for bringing the Plant-Based Treaty to my attention, Paula. 

We recognise that livestock farming is a major contributor to greenhouse gas emissions and are working to encourage a reduction in meat consumption and an increase in plant-based alternatives as part of our commitment to a greener, healthier borough. It is our policy for all catering at the Town Hall to be meat free and we continue to develop our approach on this.

 

Our current school meal contractor serves vegetarian or vegan meals for all pupils once a week, and on one other day a week the meat option contains 50% plant-based protein. On two or three days a week there is a vegan meal served. We are renewing our school meals contract and through this procurement are actively encouraging suppliers to increase their commitment to plant-based menus.

We also support the Islington Food Partnership which is a broad coalition of voluntary sector, local authority, NHS and business partners. The partnership delivers the Islington Food Strategy (updated in March 2023) which works towards reducing consumption of products of animal origin. It encourages businesses, including contract caterers to introduce more vegetable options on menus, to introduce plant-based days e.g. meat free Mondays. Thanks again for your question.

 

Supplementary Question:

 

Will the council endorse the treaty or not?

 

Response:

 

There is quite a lot of information within it, but I am more than happy to look into it.

 

 

Question (d) Sheridan Kates to Cllr Una O’Halloran, Executive Member for Homes & Neighbourhoods:

 

It was reassuring to see Islington among the 20 councils appealing to the new government for much needed improvements to local housing funding.

 

However, Rachel Reeves has repeatedly said that her economic approach is to stick to rigid fiscal rules, and her government will have to make “tough decisions” until we have economic growth. These fiscal rules have been debunked as unnecessarily constraining by countless sources from former Bank of England officials to think tanks like the New Economics Foundation.

 

How will you put pressure on her government to provide the required funding now, rather than waiting for private businesses to produce economic growth that may or may not materialise?

 

Response:

Thank you for taking the time to put forward this thoughtful question,

 

We have been really clear with government that there needs to be a fair and sustainable long-term rent settlement and reimbursement of funding lost because of rent caps, and a new Green Decent Homes programme to help us make the investment that we need in existing council homes.

 

We should be able to keep all income from Right to Buy sales to build more council homes and we should be able to borrow money for council-house building at affordable rates in the long term.

 

Government could do more to help provide decent temporary accommodation for people in need by increasing Local Housing Allowance rates by inflation on an annual basis; awarding more Homelessness Prevention Grants; and continuing to build on our successful Right to Buy, buy-back programme in Islington.

 

The measures above would help us build more homes and deliver sustainable investment into our existing homes and wouldn’t breach sound fiscal rules.

 

We will continue to promote these with the new government and secure as much investment for council homes as we can get.

 

Supplementary Question:

 

Can the Council consider exploring the ideas in Stephanie Kelton's book, The Deficit Myth, to better understand the UK central government's spending capabilities, and would you be interested in a discussion on how this could impact funding for housing, social care, and other services, I would be more than happy to come in and speak on this to councillors.

 

Response:

 

­­Yes, I am more than happy to set up a meeting to discuss this further with you.