Local councils in the UK are to face new curbs on their powers to divest from or stop trading with organisations or countries they regard as unethical.



The Department for Communities and Local Government (DCLG) has confirmed it is drawing up new guidelines to prevent local authorities from mounting their own “boycott and sanction” campaigns.

The directions, which will be issued early in the new year, are expected to make clear that councils’ procurement and investment policies must be consistent with UK government foreign policy.

“Councils should not be using pensions and procurement policies to pursue their own boycotts and sanctions against foreign nations,” a DCLG spokesman said.

“We are tightening up the rules to ensure taxpayers’ and the UK’s interests are protected.”

The Independent on Sunday reported that the move could prevent local authorities from refusing to trade with, or excluding from their pension fund portfolios, companies involved in the arms trade, fossil fuels, tobacco products and Israeli settlements in the occupied West Bank.

Andrew Smith of Campaign Against Arms Trade said it was a “direct attack on local democracy” with far-reaching implications for all campaign groups .

“Public money should be used for the public good, not to support destructive industries like the arms trade that profit from war,” he told the Independent on Sunday.

“The government is always stressing the importance of localism but this is a direct attack on local democracy and decision-making.

“At the moment the focus may be on arms companies and Israel, but if these changes are allowed to go ahead then they could affect almost all campaign groups.”