Newham Greens have called on the borough's mayor to demand the government protect the council's right to divest pension funds from companies linked to the global arms trade.
Cllr Nate Higgins wrote to Mayor Rokhsana Fiaz, on behalf of Newham Greens, calling for her support to stand against government plans to introduce mandatory pooling for local government pension funds.
In May, the government announced plans to pool Local Government Pension Schemes (LGPS), meaning many strategic investment decisions may move from administering authorities to the pooling entities.
In the open letter, Cllr Higgins said the move would “reduce the freedom of councils” to set their own ethical standards of investment.
Cllr Higgins wrote: “Newham must be able to divest not only from the arms trade but also from companies based in, listed in, or operating in Israel, whose taxes and profits sustain a genocidal government and the illegal occupation of Palestine - a state we have finally recognised.”
The government formally recognised the state of Palestine last month in a significant change of policy.
For more than a year pro-Palestine campaign groups have been calling on councils across the country to remove investments linked to Israeli arms companies from their pension funds, which invest contributions to pay for staff retirement packages.
The letter continues: “Local government divestment was central to the UK’s fight against South African apartheid and Newham residents and workers must have the same right today to ensure our money is not complicit in war crimes or human rights abuses.
“Government reforms must not block councils from setting local standards of divestment.”
In July, Southwark Council became the first local authority to embed the UN Genocide Convention into its investment strategy, allowing it to remove any investments from companies associated with genocide, as defined by the International Court of Justice.
The council also said it would divest from firms on the UN’s list of companies active in the occupied territories and complicit in human rights abuses, and call on the London Collective Investment Vehicle, which oversees the investment pension funds for London local authorities, to take similar measures.
However, the Ministry of Housing, Communities and Local Government (MHCLG) has said it has published guidance to public authorities, including local government pension funds, stating that boycotts against foreign suppliers should not form part of public procurement and “may be unlawful”.
A spokesperson said: “We are very clear that councils should not be either setting foreign policy which is different to the UK government’s or imposing additional boycotts and sanctions on foreign countries.
“Any boycott by a council outside of formal sanctions put in place by the UK government could be unlawful.”
The spokesperson said the government is committed to promoting trade and business ties with Israel and opposes boycotts.
Cllr Higgins is to raise the matter at full council this month, where a response is expected from Mayor Fiaz.
