Council defends progress on divestment as campaigners ramp up pressure

Protestors demonstrate outside Town Hall ahead of last night’s debate on divestment. Photo: Josef Steen

Islington Council has assured the public it is taking action towards “ethical” pension fund investments amid calls from pro-Palestine campaigners for it to go further.

Last night, councillors debated a motion signed by almost 2,300 people urging the local authority to “disclose and divest” from companies linked to both Israel’s war on Hamas in Gaza and its human rights violations in the Occupied Palestinian Territories.

Ahead of the debate, a demo organised by the Palestine Solidarity Campaign (PSC) was held outside the Town Hall, where Cllrs Paul Convery and Diarmaid Ward addressed the crowd and gave their support for the “struggle that you are championing”.

Cllr Convery, pensions committee chair, said the council was “horrified” by the violence inflicted on the people of Gaza and had unanimously backed an end to the destructive war, and an investigation into alleged war crimes by Israel.

“Our hope must be for a permanent peace in the region, based on a viable Palestinian state and a safe Israel,” he said.

Acknowledging that the campaigners had “rightly raised” the petition, Convery insisted that although divestment had thrown up some obstacles, the council is “getting there”.

Amid public pressure,  Islington’s pensions committee said it was working on ways to withdraw funds from companies listed by the United Nations as complicit in human rights abuses, but also admitted it had been technically difficult.

A woman named Elsha from Islington PSC introduced the debate: “We are witnessing what is by many expert accounts a genocide and still a wilful apathy is getting supplemented in our government.

“As representatives, you hold not just your own conscience, your own ambitions, your own hope, but ours as well, we will do whatever it takes to keep you accountable to our values.

“If any borough is to lead the way for divestment with its impressively long standing commitment to human rights, it is Islington. Let us work together to continue our legacy.”

Cllr Convery had explained that the council’s investments were indirect and part of pooled funds or “units”, held not only by Islington but other co-owners and managed externally by financial companies.

All local authorities have a legal obligation or “fiduciary duty” to ensure their pension funds are profitable enough to deliver the benefit to retirees.

During the debate, Convery added that the council was allowed to consider non-financial ethical matters, but these must not cause “significant detriment” to the fund.

The pensions committee chair said the nature of these pooled funds meant the local authority was unable to sell or buy shares in specific companies without all other investors and fund managers agreeing.

As a result, divestment along those lines was “a long shot”, as the process would be lengthy, expensive and could leave the council open to judicial review.

He argued that the looming changes to council pension funds nationwide, in light of the government’s proposal to reorganise them into so-called “megafunds” next year, had also closed off this route as the “novel” approach to divestment “would not survive the transition”.

But Cllr Convery highlighted that the council had already withdrawn nearly all of its interests in seven arms companies, including the firms Elbit Systems and Palantir, which have links to the Israel Defence Force (IDF).

Plans are also underway to remove holdings in Valero Energy, which is alleged to have been supplying Israel, and he was “fairly sure” at the next quarterly cycle this investment would cease.

“I believe that fully aligns with petitioners’ requests.

“We are determined that we will be running a pension fund where the portfolio is in companies which we feel are both profitable and ethically sound.

“It is a slow process, and I know that people will want us to act and achieve outcomes as quickly as possible, but we are getting there, and I hope [campaigners] will appreciate the efforts that we’re making,” he said.

The petition also revived calls for the council to rule out renewing its contract with Barclays bank over it providing financial services to defence firms selling to Israel.

Cllr Ward, Islington’s finance chief, spoke of his experience working as a teacher and human rights advocate in the West Bank in his twenties, and commended the collaboration from different parties over banking procurement.

“There’s no lawful basis for excluding Barclays from the procurement exercise, but our cross-party working group is determined to create the greatest, most ethical and most human rights oriented procurement process that this country has ever seen,” he said.

While the some of the pro-Palestine campaigners had earlier applauded Convery’s speech on the progress Islington was making, for others the council has much more to do.

Green councillor Benali Hamdache. Photograph: Julia Gregory

Cllr Benali Hamdache (Green) told the Citizen he was “hugely disappointed to see Labour make a U-turn” on its previous divestment plan.

He was also sceptical of the council changing tack based on the Chancellor’s plans for local government pension schemes.

“What we are witnessing right now in Gaza is a genocide, and every elected politican has a responsibiltiy to strain every sinew, flex every muscle to try and stand up against what’s wrong and to try and push decision makers to take action.

“They’re talking about the decision to consolidate pensions, but I don’t think that’s a good reason not to act. We’ve been here before.

“Even if we’re only doing the right thing for two months before Rachel Reeves seizes the reins, I’d rather we be doing the right thing for two months,” he said.

Former Labour Cllr Asima Shaikh, who quit the group benches last year over her party’s response to the war, said: “How is it possible to have an ethical investment policy if you’re unable to have control over your funds, as you seem to be indicating?”

To this, Cllr Convery said there was control, but it was “not transactional”.

“We can’t just drop a company here and drop a company there. What we can do is change the overall focus of our investments,” he said.

Resident Maha Mohamed also appeared in the chamber, having asked the council to publish a letter it said it had sent to Labour last year, urging the national party to commit to restricting export licenses for weapons sales to autocratic and repressive regimes when in government.

Cllr Ward presented a copy of the letter to Ms Mohamed and told her the council stood behind her on the issue, but she said it was “still not enough” as long as the UK government was exporting F-35 jets used by Israel in combat which has led to the deaths of civilians.

Jackson Caines, who recently finished runner-up to Labour’s James Potts in the Junction ward by-election, posted on X (formerly Twitter) praising Islington PSC for putting divestment on the council’s agenda.

“Councillors from the Labour right currently seeking plaudits from local Palestine campaigners and saying they want peace in the region. Have they told their party leader?” he wrote.

The local branch of the PSC was contacted for comment, but at the time of writing had not responded.