Local Government Pension Scheme March 2016

Thank you for contacting me about the public procurement guidance published by the Cabinet Office on 17th February 2016.

The guidance the Government has issued states that public procurement should not be used as a tool to boycott tenders from suppliers based in other countries, and also highlights the UK's existing obligations on public procurement, such as being party to the World Trade Organisation's agreement on government procurement.

I am also aware of proposed changes to the regulations surrounding the Local Government Pension Scheme (LGPS) in England and Wales, which will include a focus on non-financial factors regarding investments and how these 'should reflect foreign policy'. The Department for Communities and Local Government state that this is to ensure that investment decisions more closely keep in line with formal legal sanctions, embargoes and restrictions which have been put in place by the UK Government. A consultation on the Government's proposed changes to the LGPS recently closed on 19th February, and I am awaiting the outcome of this. 

A number of concerns have been raised around potential changes on investment and procurement policy, which I share, particularly with regard to local authorities and potential boycotts of Israeli settlement goods. 

The Opposition is clear that Israeli settlements on occupied land on the Palestinian West Bank are wrong and illegal. Moreover, they represent a real threat to the creation of two states as a way of ending the conflict and for this to happen there needs to be a peace process. 

The Opposition is, however, opposed to boycotts, the threat of boycotts and the isolation of Israel. It is the absence of a credible political dialogue between the Israelis and the Palestinians that is the greatest obstacle to peace and changing this will require courageous political leadership on both sides. Boycotts could undermine the prospect of a peace process and therefore of a two state solution.

On goods produced in settlements, the previous Labour government introduced guidelines which stated that labels should distinguish between "Israeli settlement produce" and "Palestinian produce". Until these guidelines were introduced, foods were labelled "produce of the West Bank". The Opposition supports clear and accurate labelling and the European Union has recently issued new guidelines for the labelling of products from illegal Israeli settlements in the occupied Palestinian territories. 

On the wider question of settlements, as some have pointed out, the UK Government's own 'Guidance on Overseas Business Risk' for the occupied Palestinian territories states that there are "clear risks related to economic and financial activities in the settlements". This guidance is very clear and the Government will need to explain how it is consistent with the changes it is proposing to make to public procurement and investment policy.

I share the frustration, anger and disappointment expressed by many at the lack of progress on the Middle East peace process. I know from the many letters and e-mails I have received that there are very strong feelings on this matter and every effort must be made to return both sides to meaningful negotiations so that a Palestinian state can be established. I will continue to press the UK Government on this.