Local councils, public bodies and even some university student unions are to be banned by law from boycotting “unethical” companies, as part of a controversial crackdown being announced by the Government.
Under the plan all publicly funded institutions will lose the freedom to refuse to buy goods and services from companies involved in the arms trade, fossil fuels, tobacco products or Israeli settlements in the occupied West Bank.
Any public bodies that continue to pursue boycotts will face “severe penalties”, ministers said.
Senior government sources said they were cracking down on town-hall boycotts because they “undermined good community relations, poisoned and polarised debate and fuelled anti-Semitism”.
But critics said the move amounted to a “gross attack on democratic freedoms”.
A spokesman for the Labour leader Jeremy Corbyn said: “The Government’s decision to ban councils and other public bodies from divesting from trade or investments they regard as unethical is an attack on local democracy.
“People have the right to elect local representatives able to make decisions free of central government political control. That includes withdrawal of investments or procurement on ethical and human rights grounds.
“This Government’s ban would have outlawed council action against apartheid South Africa. Ministers talk about devolution, but in practice they’re imposing Conservative Party policies on elected local councils across the board.”
Significantly, and underlining the main target of the ban, the formal announcement will be made by the Cabinet Office minister Matt Hancock when he visits Israel this week.
Israeli companies, along with other firms which have investments in the occupied West Bank, have been among those targeted by unofficial boycotts in the past.
In 2014 Leicester City Council passed a policy to boycott goods produced in Israeli settlements in the West Bank while the Scottish Government published a procurement notice to Scottish councils which “strongly discourages trade and investment from illegal settlements”.
