Islington Council has been accused of profiting from “murder” after an investigation by Islington Now revealed that the authority has nearly £5m invested in companies dealing in the arms trade.
Figures obtained under the Freedom of Information Act show that at the end of last year the council’s pension fund held £4.9m of shares with seven key players in the defence industry.
More than a third of the investments (£1.92m) is in BAE Systems, Europe’s largest defence firm. The company has been at the centre of controversy in recent weeks for producing parts of the F-16 fighter planes used to bomb the Gaza strip and cluster bombs recently outlawed under the International Convention on Cluster Munitions.
Campaign groups branded the figures “shocking”. Michael Johnson, who works with Campaign Against the Arms Trade (CAAT), said: “It’s not just that these companies make weapons. They make money out of murder – and so does the council.
“There’s been a major outcry against the bombings in Gaza. BAE trades with Israel and Gaza, they have offices there. Where is the action that says: ‘We’re not going to profit from the murder of Palestinians?’”
Local politician Jon Notts, a former Green Party parliamentary candidate for Islington North, insisted it was unacceptable for public bodies to invest in an industry that supported unethical powers abroad.
He said: “The Green Party is fundamentally opposed to the arms trade and the sale of weapons to oppressive regimes. We are against central or local government investing in this sector in any capacity.”
The council’s pension fund, which represents more than 5,000 members of staff and former employees, states that it aims “to promote corporate and social responsibility” in its investment strategy.
A council spokesman said: “Islington’s pension fund is regulated by law. The council, acting as a trustee of the pension fund, is legally bound to get the best return on investments and reduce the burden on council tax payers. This is the case for all local government pension schemes across the country.
“We continually review our policies on socially-responsible investment.”
But campaigners argue that ethical investment funds have matched the FTSE 100 over recent years and can actually outperform other investments over long periods.
The revelation comes in the wake of a growing trend in public bodies towards more ethical investment policies. In 2006, a report by the CAAT found that 45 universities held more than £15m in companies involved in the arms trade.
Since then, many of them have bowed to pressure from students and campaign groups to withdraw their investments, including SOAS, Goldsmiths, the University of Manchester, University of Wales, Bangor and St Andrews, as well as the previous biggest investor, University College London.
The total value of the council’s pensions fund at the end of last year was around £560m, meaning that arms investments amount to less than one per cent of the total. CAAT argues that this is all the more reason to withdraw them.
Mr Johnson, 29, said: “It’s such a tiny proportion of the overall investment that selling the shares isn’t actually going to prejudice the overall fund’s value. It’s going to make more difference to BAE in terms of their reputation and how other funds view holding their investment than it’s going to make to Islington.”
But Unite, the largest trade union in Islington which represents many of those with investments in Islington’s pension fund, refused to condemn the council. A spokesman said: “We don’t have a position on the matter.”
For more information visit: www.islingtonnow.co.uk