It follows a review over the last two years by the pension fund
Merseyside Pension Fund will not hold investments in companies that manufacture weapons forbidden by international treaties signed by the UK government. This is following a decision by Wirral Council’s pensions committee which oversees the fund and its over 140,000 members.
It follows a review over the last two years by the pension fund which has been looking how and where it makes its investments and developing new policies to help guide any approach in the future. A campaign around the issue has intensified in recent months with protests outside local authority meetings following the Israeli military offensives in Gaza.
This has led to contentious meetings and disruption on several occasions with the public being escorted out. A meeting on December 12 was no different after committee chair Cllr Brenda Hall gave repeated warnings to members of the public shouting down from the public gallery.
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A report published before the Pensions committee said they had received 161 letters about the issue with 119 being from local taxpayers and 42 from pension fund members. The report also said not all of the companies raised by the campaign group were in the aerospace and defence sector.
Redington, a consultant who explored the issue for the local authority, produced a report which said that for some companies, civil aviation was their main focus while some produced parts for weapons such as armour, engines or fuselage. Other businesses in the sector are also based in Wirral providing employment and paying Business Rates.
The Local Government Pension Scheme advisory board have offered guidance to councils overseeing pension funds, particularly in relation to Israel and Gaza. They said it was not “not appropriate for investment decisions to be driven directly by the political views” of politicians local or national in overseeing a fund.
Nigel Giffin KC also said it was incorrect to suggest “it would be unlawful for administering authorities to invest, or continue to invest, LGPS funds in undertakings engaged in certain activities with a bearing upon Israel’s conduct in and in relation to Gaza or the other Palestinian territories.” However officers said they would provide a further report on any investments that may be linked to a number of suspended licences to Israel linked to the war.
During the meeting, councillors unanimously approved the recommendations put forward by officers. However a change calling for a report on the steps required and the implications of divesting from companies supplying arms to Israel was voted down.
Officers said one American company Textron would have be excluded as a result of the changes approved but more recent advice suggested that “it no longer produces controversial weapons.” However Director of Pensions Peter Wallach said he’s not checked that this new information was correct yet.
Councillor Tony Cox said legal advice had to be followed and argued 42 letters from members out of 140,000 was a small number given public awareness of the issues, adding: “We have got to be realistic here. That suggests that the vast overwhelming majority believe that this isn’t something that is top of their agenda at this point in time.”
However Councillor Ann Ainsworth raised concerns about the suggestion 75% of scheme members would need to support any change that could significantly affect the pension fund, arguing this threshold was too high. Officers was based on legal advice to avoid challenges in court.
Cllr Chris Carubia said the issue was not simple and disinvesting from companies was complex with many issues outside of Israel and Palestine. He said: “To just say disinvest in that company. It’s not that simple. That company may invest in a single chip that might be 0.01% of that company’s whole remit.”
However Cllr Pat Cleary said the recommendation was a good step forward but didn’t address the concerns raised by members of the public attending the meetings. He said: “It’s very easy to come up with not to do something,” adding: “Until we get to grips with this and until we address the issues they are concerned about then we’re going to go around in circles for a long time.”
