The Ministry for Housing, Communities and Local Government has won its appeal against a High Court ruling that concluded the Whitehall department had acted outside its powers by banning LGPS investment strategies from imposing political boycotts. Last year, the Palestine Solidarity Campaign won its challenge to 2016 regulation amendments which said administering authorities “should not pursue policies that are contrary to UK foreign policy or UK defence policy”.
However, the ruling was overturned by the Court of Appeal last week.
Assessing relevant European directives, the judges said European Union rules gave national governments discretion over the “precise investment rules” they can impose, as long they do not restrict the free movement of capital.
The ruling added: “The discretion granted to member states in relation to prudential rules does not warrant the inference that they are prohibited from limiting the non-financial considerations that may be taken into account.”
Hugh Lanning, chair of the Palestine Solidarity Campaign, said: “This decision will allow the government to pursue its own agenda at the expense of democracy and the ability to exercise freedom of conscience.”
He said his group would consider an appeal against the decision.
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