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New legislation designed to stop UK councils boycotting Israel will prevent public bodies from taking action against other countries such as China, senior MPs have warned.
Lisa Nandy, shadow levelling-up secretary, has written to her Tory opposite number in government, Michael Gove, to warn him the bill could “have significant effects on support for the Uyghur minority in China”.
Meanwhile, former Conservative leader Sir Iain Duncan Smith warned of a “potential clash” between the interpretation of the law and longer-standing legislation tackling modern slavery. “We have to make sure nothing gets in the way of stopping slave labour from Xinjiang [in China] being used in supply chains,” he told the Financial Times.
The new legislation, which was presented to the House of Commons this week, was drawn up by Gove to stop public bodies adopting “their own foreign policy” at odds with central government.
The Economic Activity of Public Bodies (Overseas Matters) Bill is particularly aimed at Labour councils that have sought to use their financial power to put pressure on Israel. But the legislation does not exclusively apply to the Middle Eastern state.
Nandy told Gove that the Labour party shared his opposition to “boycotting, divestment and sanctions” (BDS) policy targeting Israel and believed it would make peace between Israelis and Palestinians less likely. “We will not support action that singles out the world’s only Jewish state for differential treatment,” she wrote.
But she warned that as the new legislation was “non-country specific”, it would apply as much to China, Myanmar and North Korea as to Israel. “This could have significant effects on support for the Uyghur minority in China, who are victims of grave and systemic human rights abuses, which the UK government has described as ‘barbarism’.”
Nandy also noted that the government had asked councils to divest from Russia in the wake of its full-scale invasion of Ukraine. “Now you appear to be taking the opposite approach and denying them their ability to make ethical choices in relation to other countries, including China,” she said.
In a reply from Gove to Nandy on Friday evening, the minister insisted the bill would not prevent public bodies from considering modern slavery and other labour misconduct in procurement or investment decisions.
“The government is committed to tackling the issue of Uyghur forced labour in supply chains and it is responding robustly,” he said.
China hawks in the ruling Conservative party have also raised concerns that the law could stop public bodies from making procurement and investment decisions based on a foreign state or region’s human rights record.
Duncan Smith, co-chair of the Inter-Parliamentary Alliance on China, said special care should be taken over the sourcing of two of Xinjiang’s big global exports: cotton and polysilicon, which is used in solar panels.
Luke de Pulford, executive director of Ipac, said: “It would be a great shame if a legal loophole were exploited to continue to funnel UK tax monies into the pockets of Xinjiang’s slave masters.”
The legislation was first promised in the Conservative party’s 2019 manifesto and would stop public bodies in England, Scotland, Wales and Northern Ireland bringing in BDS policies against controversial foreign regimes.
Councils, universities and other taxpayer-funded institutions would face “significant fines” if they spent money “pursuing their own foreign policy agenda”, the government said this week.
Ministers have cited motions passed by Lancaster City Council in support of such campaigns in June 2021 and Leicester City Council to boycott goods from Israeli settlements in the occupied territories in 2014.
Gove has claimed that the BDS campaign is an attempt to “attack and delegitimise” the state of Israel. “These campaigns not only undermine the UK’s foreign policy but lead to appalling antisemitic rhetoric and abuse,” he said this week. “My message to these organisations is to get on with your job and focus on delivering for the public.”
However, the Union of Jewish Students this year passed a conference motion opposing the legislation. Amnesty International has called it “pernicious” and “outrageous”.
The legislation will have its second reading in the House of Commons on July 3.
The Chinese embassy in London said that in Xinjiang “people of all ethnic groups . . . [were] entitled to full rights and freedoms” and accused “anti-China politicians” in the UK of trying to “spread rumours and provoke troubles”.
