Councillor Bob Deering and Councillor James Jamieson gave evidence.

We will now hear evidence from Councillor Bob Deering, the executive member for resources and performance at Hertfordshire County Council, and Councillor James Jamieson, the immediate past chair of the Local Government Association, who joins us via Zoom. We have until 10.55 am for this session. Can the witnesses kindly introduce themselves, so that we have it on the record?

Councillor Deering:

My name is Bob Deering. As you have just said, I am the cabinet member for resources and performance at Hertfordshire County Council, which essentially means money.

Councillor Jamieson:

Good morning. I am James Jamieson. I am a councillor in Central Bedfordshire. As noted earlier, I was the chairman of the Local Government Association until July, when my four-year term expired. Previously, I have been the leader of Central Bedfordshire Council.

Just before we get into the questions, I think Bob Blackman would like to make a declaration of interest.

Thank you, Chair; apologies for being late at the beginning. I want to put on record that I am a vice-president of the Local Government Association; obviously, we have witnesses here from the LGA. I am also the secretary to the all-party parliamentary group on British Jews, and I chair the all-party Britain-Israel parliamentary group. I am an officer of Conservative Friends of Israel, and I have been on trips to Israel sponsored by the Conservative Friends of Israel. I have also been on trips to the west bank and on others sponsored by other groups.

Thank you.

Q Can you tell us about previous attempts by councils to pass motions to boycott Israel? Do you agree that this legislation will help local councils to remain focused on their core functions, rather than being distracted by BDS campaigns, and give them clarity that they should avoid BDS campaigns?

Councillor Deering:

I do not know whether it will disappoint you, but in Hertfordshire we have had very little agitation—if I can use the word—of this type. Ahead of me coming here today, we did the best that we could to check our records, and we think that there may have been some form of question or petition that may have come through in 2022 related to Israel. We then had something post the Ukrainian issue that related to Russia. We think that that is just about the limit of our experience in recent times, so maybe we do not have a lot of experience to draw on. We would say that that is a good thing, because in Hertfordshire we are trying to manage our finances in an objective and hopefully sensible way for the benefit of the residents of Hertfordshire, not for any particular lobby group, whichever it may be. My answer to your question is yes: what you are looking at here probably would be helpful.

If I may just add a rider, there is some crossover between what you are looking at here and procurement. I think we would be keen that no grey area emerges across those two areas of interest.

Q Councillor Jamieson, is there anything you wanted to add to that, or are you happy with it?

Councillor Jamieson:

I would also reflect that my personal experience in Central Bedfordshire is that we have not had motions of this nature relating to countries. Interestingly, we have had, on occasion, motions that would not be covered by this Bill, but which I would say were of a broader political nature and did not focus on what local government should be doing, which is delivering for our residents locally. My own personal view is that that is what councils should be focused on. Foreign policy really should be a matter for Government.

Q There are exceptions in the Bill that permit investment decisions, such as labour market misconduct or environmental misconduct. Do you think that those are appropriate and are the right balance to strike?

Councillor Deering:

That is quite a big question. I am conscious that you will be taking evidence from all sorts of people. I might provide you with a neutral answer, if I may. We can see why they are there. Again, I do not wish to be repetitious or boring, but really we simply try to run our finances as best we can. In principle, we do not want awkward issues to come up that make it difficult for us to run our finances in the way that we think is best for our residents.

Councillor Jamieson:

I do think that it is important that pension funds—as is currently the regulation for pension funds—can take into account issues that would be of concern to their pension holders. That is right, and that is a carve-out, albeit it also has the carve-out—I cannot remember the exact wording— that effectively it must not have a significant financial impact. I think that is right. For instance, with things around the environment, people might have concerns when investing in certain companies. Local government has a public health duty and I could completely understand if certain councillors wanted to avoid investments in businesses that they deemed were harmful for public health. A classic example would potentially be the tobacco industry. I think it is important that we can still make those decisions.

One final, holistic question: are you supportive of the Bill and whyQ ?

Councillor Deering:

I think we are. I think we would support it for the central reason, which is that this country’s foreign policy, it seems to us, should be made by Government and should therefore be a coherent, unified foreign policy, rather than being fragmented across goodness alone knows how many organisations across the country, thereby becoming disparate. So yes, we are supportive.

May I come back on something the previous witness has just said in relation to pensions? Our experience is that if we find that there is some degree of pressure, it is more likely to come in relation to pensions. Our pension fund is valued currently at about £6 billion, which is a lot of money. We have 115,000 members and 400 employers. We take our responsibilities for our pension extremely seriously and I have been on our pension committee for a number of years. We have from time to time had situations where people, exactly as has just been said, come along and say that we should not be investing in x or we should not be investing in y because. There is a degree of difficulty with that because we understand always where people are coming from, but clearly, in the pension world, we have a fiduciary duty to deliver—to put it loosely but broadly—the best pension we can for all the prospective beneficiaries of our pension scheme. That comes up from time to time.

At Hertfordshire, we have an extremely good pensions committee. It is cross-party, as you would expect, but it is not party political. The reason I have come back to this is because, of course, environmental, social and governance is an issue in all investment these days. All the advisers that advise us in relation to our pension investments have some facility to advise on ESG. It might be thought that that strays into that area—tobacco, coal or whatever it is—but ESG works its way through to value and you start to realise that, actually, it is an investment criterion because it affects the value of what you are investing. I thought I should just say that because that is probably our biggest experience in this area.

Q Just a point of clarification: the Bill only prevents decisions being made on the basis of moral or political disapproval of states as opposed to banning fossil fuels or environmental matters. It does not cover that.

Councillor Jamieson:

I am speaking personally here. This is not an LGA view, just to be clear. I think the principle of this legislation is absolutely fine and, in many ways, helpful because it enables people on a pension committee to be very clear that they cannot consider countries when looking at this. However, my caveat is that there are some details in the regulations that need clarifying and those are quite concerning. It is not the principle but some of the details and we just want to make sure that some of those are right.

Q I would like to start by putting on record the thanks of Members of the Opposition Front Bench to Councillor Jamieson for his leadership of the Local Government Association. It is safe to say that it is a broad family of all parties and none, so that leadership in a single person is an exceptionally tricky job and I think you did a very good job of it. As I say, we are grateful for your leadership and your candour with us when we have asked you questions in the past. Thanks again for your and Councillor Deering’s presence.

We speak a lot in this Parliament about transferring power from here to local communities, namely our local councils. The Bill very much transfers power from our local councils to this place. How do colleagues in the local government family feel about that?

Councillor Jamieson:

Thank you very much for your kind words. As I should have mentioned in my little statement a moment ago, I am very vexed—and was very vexed as chairman of the Local Government Association—by the underlying trend of giving powers to local government with one hand and taking them away with multiple hands. I can genuinely understand why it is being done, but I do not like the fact that it is another example of central Government just eating away at the freedoms and devolution of local government, but there are far more contentious areas than this one in which I would argue that the Government have taken back powers.

Councillor Deering:

My view is very similar. I do not know that in Hertfordshire we feel particularly that this is a power grab from us; I think we understand the rationale of the Bill, or the proposal. If we had more experience of problems in the area, maybe we would feel differently, but I think we would say that we are fairly relaxed about this.

Q Clause 4 will restrict your ability not only to act, but to talk about whether you would have been inclined to act. That is quite a significant fetter on your free speech. How do you and your colleagues feel about being told by central Government what you can and cannot say?

Councillor Deering:

My answer is very similar. Again, it could be because our experience of problems arising is quite limited, but we are broadly relaxed about the point that you are making. We can see the overarching objective of the proposed legislation.

Councillor Jamieson:

This was one of the areas of detail about which I had a concern, because I think it only right that in a committee meeting people should be free to express views. The key question is what the decision of that committee is. That is what should be held to account, rather than the views that are expressed and rightly debated in the meeting.

We have two concerns. One is about the freedom to express those views in an appropriate manner during the meeting. The second concern is that we publish minutes of meetings. If those minutes faithfully record what somebody has said, would that breach the rules on expression of views? Those are two details that need to be sorted out, because we do want debate in a meeting. People should be able to express their view; the point is that when they come to make a decision, it is the decision that should be held to account, not what people said in the meeting.

Six members of the Committee have indicated that they want to ask a question, so I will initially confine them to one question each. I am sure that members of the Committee have enough intellectual flexibility to be able to get everything they want to find out into a single question.

Q James, in your former role as chairman of the LGA, were you aware of circumstances that were discussed and debated by local authorities, or decisions that were made, that would be in contravention of the Bill when it becomes an Act?

Councillor Jamieson:

I think the key question is the one that I have just spoken about. I am not particularly aware of any decisions, but I am aware that there have been debates. The key point that I am worried about is that I do not want those debates to be caught out, because it is right to debate things.

Q Can I just follow up on that point? There was an issue about Leicester. I wonder whether that was something that the LGA considered.

I think that counts as a second question.

Well, it is a clarification.

I did say that I was not going to allow second questions, but can somebody give a quick answer?

Councillor Jamieson:

I will have to come back to you on that, Bob. I do not have the details of the Leicester discussion.

Okay.

Q As I understand it, any financial penalties for a local authority that falls foul of this legislation will fall on the council, which means that they will fall on the council tax payer. Do you think that that is fair? Is that likely to deter highly motivated individuals or groups?

Councillor Deering:

I think it is my turn to go first, isn’t it? Do I think it is fair? That is a very good question. I think ultimately it is the decision that Parliament will make on this on this Bill. As a broad matter of principle, I do not think it is inappropriate that if a standard is set and there is a failure to meet the standard, some consequence will follow, but it is for Parliament to determine quite what that standard will be and quite what the consequence will be. As a principle, I do not think we would have any difficulty with that. On the second part of your one question, I would not think that this issue would deter people from coming into public life in local government. That would be my personal view.

Councillors Deering and Jamieson, this question is to both of you. Councillor Deering, you said the point around pensions should not be political. In your experience as councillors, how much of an increase have you seen in talk about, for example, previous slavery, the environmental side, Israel and Palestine, China and Russia? How much more of this debate is happening at a local council level, as opposed to 10 years ago? Was this debate happening then? Is it becoming more prevalentQ ?

Councillor Deering:

Well, I do not quite go back 10 years in local government, so I cannot quite answer for that period. I became a county councillor in 2017, I think, but I have been involved in the finance and performance side more or less ever since day one. I would say that the answer to your question is: a bit. Not only is there slightly more of this discussion because of general issues and political issues, but also in part because all councils are under financial pressure and every now and again there is a view expressed by someone—from wherever they might be on the political spectrum—that, “There seems to be an awful lot of money in the pension fund, and can’t that somehow be used?” Obviously that is inappropriate. In our council, everybody understands that, but it is a frustration that is expressed from time to time. Coming back to your question, yes, there is a little bit more of what you asked about, but maybe that is because there are an increasing number of events in the world that might lead to the thought being ventilated.

Councillor Jamieson:

The modern world—with the increase in social media, the ability for electronic petitions and so forth—has meant that councils are subject to more petitioning and more demand from groups of the public. It is easier to put these things on the agenda than it was in the past, so I think it is inevitable that we are seeing more of whatever it is that we are talking about compared with 10 years ago; in fact, I can go back 14 years, so compared with 14 years ago.

Q I will pick up on a point that has kind of been covered already. Do you have anything further to add on the issue of freedom of speech, or any further concerns that this Bill will undermine local democracy by restricting what councils and councillors can say and do? You are very fortunate in your area if you have not been impacted by some of the more contentious issues that the Bill covers, but I have some concerns around freedom of speech for local representatives and undermining local government autonomy. Is there anything else you want to add?

Councillor Deering:

Personally, I am a very big believer in freedom of speech, and just freedom. If I might make a huge point, it is one of the things that this country is pretty good at, actually. I am very strongly in favour of it and would not want to see it impinged, but we all need to find a way to work together and achieve objectives. I repeat that our institution is not particularly vexed about the issue that underlies your question; we can see it, but I do not know that we are vexed by it.

Councillor Jamieson:

If I can come back to this—I am in danger of repeating myself—I do think it is important that there are some tweaks to the legislation. One is that writing the minutes of a meeting that reflect a view expressed in the meeting should not be a reason to be referred to the Pensions Regulator or for judicial review. Also, if the reference to a decision having been “influenced” was changed to “substantially influenced”, that would make life a lot easier.

I also have a big concern with judicial reviews. My biggest area of experience with judicial reviews is in the planning system, where they can be hugely expensive and time-consuming. I really do not like the fact that councils will be subject to judicial reviews, which will make vexatious JRs and so forth much easier. We are covered by the Pensions Regulator, and if the legislation were changed to say that it is the Pensions Regulator that makes the decision, and the Pensions Regulator could then be judicially reviewed if somebody felt it had not made its decision correctly, that would reduce the risk of vexatious JRs. That should also be linked to who can claim that they have been impacted. At the moment, pretty much anybody in the UK is in a household where there is a ratepayer; does that mean that anybody can mount a challenge just on the basis that they are potentially influenced or potentially a taxpayer?

The definition of who can mount a JR should be tightened, then, but ideally we should remove the ability to JR councils for the decisions. We should be monitored by the regulator and complaints should be made to the regulator, which should make that decision. If the regulator makes a decision and a member of the public is not happy with that decision, they should JR the regulator, not the council. I think that would make people feel a lot more comfortable about expressing their views and not having a vexatious JR or worrying about whether a minute in a meeting might contravene the rules or whatever.

The regulator might consider itself to be an exception to that rule.

Q Some have suggested that it is rather pointless to implement a ban if you have a toothless enforcement regime. Do you agree that it therefore needs to be sufficiently robust if we are to introduce this regime?

Councillor Deering:

If I may say so, I thought that Councillor Jamieson’s response to the previous question was very good, because the question went to freedom of speech but Councillor Jamieson talked about judicial review, and in effect you are talking about enforcement through judicial review.

I substantially endorse what Councillor Jamieson just said. From the practical point of view of a councillor—forgive me: no doubt some of you in the room have this experience, but perhaps some of you do not—JRs may very well not be vexatious but my goodness me they give rise to a huge amount of work. They involve huge cost exposures and they are very, very demanding on a council’s capacity. If there is to be a JR backdrop to this, it needs to be put together in a thoughtful and careful way.

Subject to that, of course, if you are creating a regime that requires application, there does need to be some enforcement mechanism. Yes, I agree with that.

Councillor Jamieson:

There does need to be an enforcement mechanism, which is the whole point of the Pensions Regulator. That should have sufficient teeth. It covers a whole range of issues—not just this but other things—and in general it works reasonably well.

Q Do you both accept the principle of a political party stating in its manifesto prior to a council election how it would use procurement and investment policies to incentivise ethical business conduct that is human rights compliant? How would you answer those who have responded to this Committee and their criticism of the Bill that it will

“make it almost impossible for public bodies to use their procurement and investment policies to incentivise ethical business conduct that is human rights compliant”?

Councillor Deering:

I did not quite catch the very first part of your question—

I can say it again.

Councillor Deering:

It is okay; I think I got the gist of it. In a way, that goes perhaps not to the heart of the Bill but somewhere reasonably close to its heart, doesn’t it? In effect, it goes to the question of whether local authorities or public bodies should be campaigning bodies. There are some interesting questions there, aren’t there? Of course, in the case of local authorities, their funding is all taxpayer funding, so there needs to be some balance to make sure that taxpayers’ money is spent in an appropriate manner. It seems to me, essentially, that that is one of the things that your Committee will be considering when you consider the Bill.

Personally, I would come back to the objective of the Bill, and I would say, as I have already said in this session, that it seems to me and us that the objective of the Bill is understandable: in so far as the country has foreign policy, that policy should be made centrally, and it should not be fractured into all sorts of different variations across the country.

Q Councillor Jamieson, is there anything you want to add to that?

Councillor Jamieson:

I think that, as with all these things, there are grey areas in this, but as a broad principle, national Government set foreign policy. I think that is appropriate and right. Local government provides services for its residents, and we want them to be the best that they possibly can be within the financial envelope, but we do have a wider responsibility, as Councillor Deering said earlier. ESG is a key part of some of our procurement and investment decisions, and procuring to support local businesses is also something that is really important. We need to be clear that those things are still allowed, but speaking personally, I would not support every local council having its own foreign policy. That would be inappropriate.

We have a couple of minutes left in this session, if anybody has a question that they have not had the opportunity to ask. I call the Minister.

Q There has been quite a lot of talk as to whether councillors can express their own views. The Bill applies only to public bodies, so a councillor can express their own view; it is simply that, if a councillor is talking on behalf of the local authority, they are covered by the Bill. In the light of that, are you comfortable with the Bill?

Before I bring in the witnesses to answer that question, Bob Blackman has a very quick point.

It was a very quick point to Councillor Jamieson: could you clarify exactly what changes might be made to the Bill to clarify the regulations that you spoke about earlier?

Thank you. Over to our witnesses.

Councillor Jamieson:

First, I will write formally, Bob, so that there is no ambiguity on any of those changes, if that helps.

Minister, on the point about being able to speak freely, the question is, if someone is speaking in a debate and it is minuted, what does that mean? There needs to be clarity about what represents speaking as a councillor or speaking on behalf of a council. Minutes of a meeting are one area where, at the moment, it is ambiguous, so we need to be very clear that minutes of a meeting and opinions expressed in those minutes do not represent the views of the council; they are the views of the councillors, if that makes sense. That just needs clarifying.

On the couple of points I was making to you earlier, Bob, in order for a decision that has been made to be called into the Pensions Regulator, or whatever, it needs to have been substantially influenced, not just influenced. My third key point is that we should be regulated by the Pensions Regulator. You should not be able to JR a council on this matter. If you do not like the decision of the Pensions Regulator, you should JR the Pensions Regulator. That would save an awful lot of potentially vexatious JRs.

Councillor Deering, is there anything that you briefly want to add?

Councillor Deering:

I am sorry to embarrass Councillor Jamieson, but I think the points he has just made are very sound and sensible. Coming back to the question that led to that answer, yes, there is clearly a distinction between a council and councillors. Quite clearly, they are not the same thing.

I am afraid that that brings us to the end of the time allotted for the Committee to ask questions. I thank both the witnesses, on behalf of the Committee, for steering an important path between freedom of speech and the responsibilities that pension funds have to pension fund holders past, present and future. It has been a really useful and informative session and I would like to thank you both very much for your contributions.

Councillor Deering:

Thank you very much indeed.

Councillor Jamieson:

Thank you.