Controversial pension reforms consultation to close this week
The last chance to consult on proposed government reforms to local authority pensions, which critics say will hinder their ability to ensure money is ethically invested, will close this Friday (19 February).
The consultation, which opened on 25 November 2015, covers proposals to revoke and replace the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2009 with new regulations.
It aims to help local authorities save £660m a year by collective investment and passive fund management, according to the government.
The consultation states that “using pensions and procurement policies to pursue boycotts, divestments and sanctions against foreign nations and the UK defence industry are inappropriate” and that guidance published ahead of the new regulations coming into force “will make clear to authorities that in formulating these policies their predominant concern should be the pursuit of a financial return on their investments”.
However, pressure groups have raised concerns that these regulations could hinder campaigns to stop local government pension funds from investing in areas such as fossil fuels, arms, tobacco companies, and Israeli settlements in the West Bank.
Communities and local government secretary Greg Clark MP says in the consultation release: “Divisive policies undermine good community relations, and harm the economic security of families by pushing up council tax. We need to challenge and prevent the politics of division.”
Ryvka Barnard, senior militarism and security campaigner for pressure group War on Want, who are signatories to the ‘Boycott, Divestment, Sanctions’ campaign which encourages pension funds to divest from Israeli companies, said: “This is the latest in a sustained government assault on democratic rights and freedoms, following the Lobbying Act, Trade Union Bill, Prevent and much else.
“So much for George Osborne’s so-called ‘Devolution Revolution’, this proposal is a cynical attack on local democracy.”
The regulations may also hinder the work of campaigns such as Go Fossil Free UK, which aims to put pressure on local councils to divest their pension funds of fossil fuel investment.
Other proposed changes include changing the definition of a stock lending arrangement in the regulations, removing conditions on the choice and terms of appointment of investment managers, and encouraging local authorities to invest more efficiently by pooling assets with each other.
The government invites bodies including county, district and borough councils, fire and rescue authorities, police and crime commissioners and the LGA to take part in the consultation.
Those still interested in responding have until 11:45am on 19 February. They should e-mail: LGPSReform@communities.gsi.gov.uk.
View the full consultation here.