‘The Tories’ anti-boycott bill tried to make Labour squirm – but it backfired’

In the middle of a housing crisis, and with many local authorities facing extreme financial difficulty, you might have thought that Michael Gove’s Department for Levelling Up, Housing and Communities had better things to do than put forward legislation whose main purpose seems to be to try to embarrass the Labour Party.

But you would be wrong.  See the Economic Activities of Public Bodies (Overseas Matters) Bill, which was given its second reading in the House of Commons yesterday.

Anti-boycott bill would limit action even over genocide

The central provision of the Bill is clause 1.  That clause aims to prevent any UK public body (including not just central government and English local authorities but also the devolved governments and public bodies and local authorities in the devolved nations) from taking into account its political or moral disapproval of the conduct of a foreign state when taking procurement or investment decisions.

There is some doubt as to whether the wording entirely achieves that aim, and there is also justified concern, echoed by some Tory MPs in the debate, that it may in practice be difficult to distinguish disinvestment decisions driven by disapproval of oppressive policy from investment decisions driven by the concern that such policy may well generate instability and hence lower profits.

But, quite apart from those serious concerns about its drafting, the wide scope of the clause is also causing political problems for the government.  As is clear from the DHLC’s press release, and Michael Gove’s speech in the debate, this provision is said to be aimed at the boycott, divestment and sanctions (BDS) campaign against Israel.

The Labour Party opposes BDS as a policy. That will not change.

But the government’s bill to tackle this serious issue is deeply flawed and will not address the problem it rightly seeks to solve.

That is why Labour has proposed an alternative 👇 pic.twitter.com/12ORaxHvxD

— Lisa Nandy (@lisanandy) July 3, 2023

However, as a Tory campaigners against China’s conduct in Xinjiang have noticed, and as the former Tory cabinet minister Kit Malthouse pointed out in the debate, it covers conduct not just by foreign states with which the Conservative Party tends to be sympathetic, but also conduct by countries whose conduct is criticised across the political spectrum.

Indeed, it is irrelevant that the foreign state conduct may be a serious and flagrant breach of international law (including, as Alicia Kearns, the Tory chairman of the Foreign Affairs Select Committee, observed, genocide).

During the debate, Tory supporters of the Bill – who were relatively few and far between – tended to emphasise the BDS issue: but some, like former cabinet minister Simon Clarke, expressed a wider complaint against any public body other than central government taking any form of policy stance on international issues.

Indeed, that centralising urge to put local and devolved government in its place, characteristic of so much of the current government’s policy, may well be one of the real drivers behind the wide drafting of the Bill.

Concerns about singling out Israel

Moving on to clause 3, that clause gives the UK government given power to take certain countries and conduct out of the clause 1 prohibition. That will doubtless be done in relation to Russia’s invasion of Ukraine.

But the case of Xinjiang illustrates a difficulty here: for various reasons of realpolitik central government may both condemn foreign state conduct but not want to take the very public step – which might invite retaliation – of excluding that state’s conduct from the Bill, leaving public bodies unable to show their disapproval of that conduct in their purchasing and investment decisions.

Another issue with clause 3 is that it carefully singles out Israel and the occupied territories: they can never be excluded from the prohibition. While it is refreshing to see the current government accept any limitation on the powers it asks Parliament to give it, the reason for this exclusion lacks any principle.

What we have witnessed today in the Chamber is politics at its worst. The Govt are bringing forward a Bill that is flawed, poorly drafted & simply bad. Why? Not because they want to protect Israel & the Jewish community. But because they want to trap Labour.

It is shocking. pic.twitter.com/lSJpe8puq9

— Margaret Hodge (@margarethodge) July 3, 2023

If the aim is to protect a “friendly state”, why Israel and not, say, France or the US? And what if Israel did something that everyone in the UK regarded as utterly indefensible – not, under its present government, a wholly hypothetical question?

The only conclusion is that singling it out is designed to draw attention to Labour divisions on Israel: and as Margaret Hodge pointed out, many avowed Zionists have concerns about singling out Israel for special protection.

A further legal issue arises from the fact that clause 3 lumps together Israel and the Occupied Territories, despite Security Council Resolution 2334 – which requires UN member states to distinguish them.

Creating a ‘thought crime’?

It gets worse.  Clause 4 contains what is may fairly be described as a free speech nightmare: Desmond Swayne, not exactly a woolly liberal, described it as creating a “thought crime”. That clause prohibits public bodies – and decision-makers within them – from making statements that they intend to act in a way that would breach clause 1 or, critically, that they would do so were it lawful to do so.

The effect of that last point is quite startling. Imagine a Tory Mayor being asked at a public meeting by a campaigner for Uyghur rights why her council was still entering into contracts with Chinese companies. The true answer is that the Mayor would like to boycott Chinese companies but has been advised, under the Bill,  that she can’t.

But clause 4 would appear to mean that she can’t give that true answer. Put mildly, it is perhaps not ideal for legislation to stop politicians giving true answers to questions that they are asked.

Moreover, it would be hard to justify such a prohibition under Article 10 of the European Convention on Human Rights, which makes the government’s bald assertion that the Bill is compatible with the ECHR look distinctly questionable. It appears to base that assertion on the point that public bodies do not enjoy Article 10 rights, but that point looks highly dubious when applied to individual decision-makers.

Another blow for devolution

If all that was not enough, the fact that the Bill extends to the devolved governments raises devolution issues.

The government accepts in the explanatory notes published with the Bill that clause 1 and clause 4 modify the powers of the devolved governments and asks for the legislative consent of the Senedd and Scottish Parliament: but it also claims, despite the fact that procurement and public investment decisions are usually regarded as devolved matters, that the Bill falls within an area reserved to Westminster (international relations).

That claim is controversial as a matter of law, and in my view likely to be wrong, with the result if I am right that the Bill would breach the Sewel convention (under which Westminster does not normally legislate for matters within the competence of the devolved parliaments without their consent).

Unfortunately, because the Sewel convention is not policed by the courts, there is no legal way of testing this point, so that the net result will be yet another knock to the solidity of the devolution settlement.

Fortunately, one rule of thumb in politics is that legislation designed to embarrass the opposition has a nasty habit of turning out to embarrass the government. That that is happening was pretty obvious from the debate yesterday.

So this may be an occasion where pressure from Tory MPs – or if not them, from the Lords – secures real changes before the Bill is passed. But we shall see.

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