Unions ‘blocked’ by council from discussing pension fund investments

Protesters on the Town Hall steps in February. Image: courtesy Hackney Independent Socialists Group / free for use by LDRS partners

Trade unions have accused Hackney Council of “ignoring” pension fund members after they were denied the right to give a deputation to councillors on divestment.

Ahead of the pensions committee meeting last night (11 March), Unison, Unite and GMB representatives asked the Town Hall to let them speak about their “serious concerns” regarding a recent survey of members’ views on the fund’s investments.

The council denied the request on the grounds that the topic was too similar to earlier ones, and that the constitution “does not allow” unions to present deputations to committees.

Monitoring officer Louise Humphreys stated: “Given the number of submissions and requests on this topic (from members and the public) on the issue in recent months at various meetings etc, the proposal is potentially vexatious.”

But Unison’s Matthew Paul told the Citizen that his group was “blocked” and that pension scheme members are being “ignored” – despite having made their priorities “unambiguously” clear to the council.

“[They] do not want their pensions invested in companies making weapons and profiting from human rights abuses, death and destruction,” he said.

In light of the monitoring officer’s decision, Cllr Fliss Premru said it was a “constitutional problem” that local residents had more rights to give deputations to the panel than Hackney staff who belonged to a union.

The survey, which was “not designed to drive divestment actions”, shows roughly a third of respondents believe the fund should “do no harm” in its investments.

A third also wanted to see investments “for good”, while a further third were “keen to see money invested to deliver the best returns”.

The vast majority (85 per cent) view tackling climate change and human rights as either ‘important’ or ‘somewhat important’.

Like many other local authorities, Hackney Council has faced persistent calls to withdraw pension fund investments from arms producers and companies linked to human rights abuses in the Occupied Palestinian Territories, such as the military tech firm Elbit Systems.

Hackney’s neighbouring borough councils, Waltham Forest and Tower Hamlets, have both publicly committed to doing so.

Having promised to divest in August 2024, the former has pledged to work with investment manager London Community Investment Vehicle (LCIV) to develop a fund with “strong exclusionary criteria”.

So far, Hackney has resisted similar demands.

Pensions committee chair, Cllr Kam Adams, has cited the council’s “fiduciary responsibility” to ensure the fund maintains enough profit to sustain the benefit.

Accusing divestment campaigners of “jumping on the bandwagon”, he has also reasoned that the council’s investment in stocks and shares is “indirect”.

This means not even the independent investment manager can control which stocks are included in the “passive” pension scheme, he argued.

But at the meeting, Cllr Penny Wrout (Independent Socialist) criticised the council for “misleading residents on the doorstep”, claiming that one of Hackney’s deputy mayors told the public that the local authority did not have investments in Elbit Systems – despite it owning indirect shares as part of the pooled fund.

Mr Paul, who did attend, suggested the council look to follow Waltham Forest’s example or set up “something similar”.

He later told the Citizen: “The committee spoke about maximising the return on investment as their fiduciary duty. That is a fundamental misunderstanding.

“The fiduciary duty actually is making the best decisions, with the best information, in the best interest of the members.”

But assistant director of pension funds, Miriam Adams, said while the panel was aware of the “activities” in those boroughs, “there has been no decision made to divest”.

The committee’s drafted ‘responsible investment strategy’ states that Hackney favours “stewardship” of its fund, rather than pulling investments.

“[We] recognise that our exit will not in itself change an asset’s real-world impacts,” it adds.

“Divestment and exclusion will only be considered when other avenues have failed”.

However, the document also outlines five sustainable development goals (SDG), crafted by the United Nations, that will steer the fund’s management.

This includes SDG 16, ‘Peace, Justice and Strong Institutions’, which “recognises the importance of providing peaceful societies as a pre-condition for social and economic development”.

The document adds: “The committee will monitor exposure in areas of conflict and engage with investment managers and companies exposed to areas of conflict, or to regions where the rule of law is not in place or where justice is not available to all.”

Cllr Ben Hayhurst (Labour) said that given “geopolitical shifts” and changes in the UK’s defence strategy, the committee should be careful in how it changes the wording of the document.

“While I’m fully in favor of the human rights provisions and the peace provisions, I would not want it to be read as ‘we do not invest in national resilience and defense’, which is absolutely vital.”

Mayor of Hackney Caroline Woodley said: “We have listened to public concerns, engaged with campaigners, and taken seriously residents exercising their democratic rights.

“We have a responsibility to be honest and transparent about what we can and cannot do with regard to our pension fund holdings. We are aware that some local authorities have made public commitments to divesting from pension holdings, but have not yet seen changes to the funds they hold.

“The Hackney pensions committee has a legal obligation not to take any action that would have a detrimental financial impact on the Pension Fund of its scheme members, and its position is that it cannot risk breaching this legal obligation.

“This does not mean it isn’t committed to responsible investment. In Hackney, we have been ambitious in decarbonising our pension fund investments, and divested from holdings linked to Russia because our legal obligations allowed us to do so.

“The widespread imposition of sanctions on Russia meant that there were long-term financial concerns associated with the assets – divestment decisions are permitted by the Law Commission guidance where there is a clear financial rationale for doing so.”

Last month, the mayor met with two Palestinian women visiting the borough from Silwan, East Jerusalem, alongside Matt Rowland Hill from Palestine Solidarity Campaign (PSC).

They raised their concern that Hackney’s pension fund has investments in the companies Palantir and Caterpillar.

The former’s surveillance tools are used to monitor Palestinians in the occupied territories, while the latter’s bulldozers have been used to demolish homes to make way for illegal Israeli settlements.

Mr Hill told the Citizen he asked Mayor Woodley if she committed to supporting divestment from companies complicit in human rights violations against Palestinians, “if and insofar as doing so is consistent with Hackney’s legal obligations to pension fund holders?”

He said that while the mayor “did promise she would answer that question clearly, within a week, in an email”, the group is yet to receive her response.

Update: this article was amended at 11.25am on 13 March 2025 to include a statement from Hackney mayor Caroline Woodley.