Merseyside pension fund leads fight to invest ethically

Click to follow
The Independent Online

Liverpool City Council will this week become one of the first UK local authorities to try to prevent the region's public sector pension fund from investing in the def-ence industry.

A motion expected to be passed by the city council on Wednesday will call on the £4.4bn Merseyside Pension Fund – which contains the retirement savings of the staff of five local authorities in the district, as well as the staff of John Moores University – to ballot its members over the introduction of a new ethical investment policy.

The motion, to be tabled by Liberal Democrat councillor Richard Oglethorpe with the support of the Stop the War coalition, will aim to prevent the fund investing in any companies that support the defence industry, as well as tobacco companies and businesses that support unethical practices such as child labour. The Liberal Democrats have a small majority on Liverpool City Council and are expected to successfully ratify the motion on Wednesday.

Two of the other four councils whose pensions are held within the Merseyside Pension Fund are also expected to pass similar motions over the next few weeks. But the Wirral council, which has responsibility for the fund, has so far opposed all moves to impose investment restrictions, and may try to block a ballot.

Last year, Liverpool City Council and two other local councils passed motions calling on the pension fund to introduce an ethical investment code, but they were knocked back by the Wirral council.

To support its case, it cited the ruling in a court battle between Arthur Scargill's National Union of Mineworkers and the National Coal Board, which took place in 1985. Scargill's union was taken to court by the NCB over its decision to try to stop the mineworkers' pension fund from investing in companies that developed rival energy sources to coal. The NCB successfully argued that it was the fund's fiduciary duty to maximise returns, claiming a restrictive investment policy could jeopardise this objective. The Wirral is now relying on a similar argument.

The motion's supporters point to a 2005 United Nat-ions report on ethical investment, which claims the judge-ment in the Scargill case was misunderstood, misrepresented and out of date.

Comments