The UK government is planning to make it illegal for any organisation that receives public funds to boycott goods from a given company or country. So it would be against the law for, say, a university student union to boycott products from an illegal Israeli settlement, or for a local authority to blacklist a company that exports products which could be used in torture.
The government argues that these so-called “town hall boycotts” amount to “local foreign policies” which are “undermining our national security”. (Presumably the London Borough of Havering’s “local foreign policy” presents no such threat to national security). There will be “severe penalties” for any organisation or institution which breaks the new law.
There is a rich tradition in the UK of local activism targeting bad guys by hitting them in their pockets. Some would say that the grassroots boycott of South African products contributed to the end of apartheid. Certainly, voting with your wallet can be a way to feel that you are actively helping a cause.
Of course, the new rules would not stop an individual from maintaining his or her personal boycott – they would not take away your right to choose, even if the money in your pocket found its way there via the public purse (say as benefits, or a public sector salary). I, civil servant though I am, will not court arrest by ruling out Hewlett Packard next time I’m in the market for a new printer. Nor will organisations be banned from mounting their own boycotts as long as those organisations are not publicly funded. In fact, rules for public institutions already exist. Under international and EU public procurement rules, it is illegal to discriminate against countries which qualify for equal treatment, as long as the public contract being offered is worth over a certain ‘threshold’ value. Leicester City Council can’t exclude Israeli bidders from service/goods contracts worth more than around €175,000, for example. But what the government is proposing here seems to go well beyond existing public procurement rules. I don’t think this stems from a wish to promote free trade. I think it’s about forcing local government to bow to the wishes of central government. It’s another illustration of a general problem in British public life: a sense of entitlement and exceptionalism on the part of Westminster and Whitehall, our national tier of government.
Let me expand on this point. In 2014 I wrote about the West Lothian Question and why it shouldn’t even arise in a properly functioning federal state. This policy announcement is another symptom of Westminster’s refusal to cede democratic ground to other actors. The government will presumably argue that it has every right to say how public money should be spent as it draws its legitimacy from its victory in the general election. But Leicester City Council was also elected. And the NUS leadership is elected. Their policies reflect the will of the people who voted for them, and are as legitimate, democratically, as anything cooked up by Tory SpAds. The fact that central government controls the purse strings does not give it greater legitimacy, it simply gives it greater power.
The UK’s central government advocates localism and devolution, but without the meaningful empowerment of local government by devolving budgetary powers that advocacy is specious. Until it has the power to raise taxes and then spend those taxes as it sees fit, local government remains effectively an executive branch of central government. In a federal country like Canada, the national (‘federal’) and local (‘provincial’) tiers of government share the tax you pay. About a third of your income tax goes directly to the province where you live; and most of the sales tax you pay also goes to the province. Canada’s constitution defines what the federal government can spend money on, and what the provincial government can spend money on. The federal government cannot tell the provincial government what to do with its money. And, unlike devolved UK local authorities, Canadian provinces can borrow money and run a deficit.
In the UK, only a much smaller proportion of your tax bill is paid directly to local government (in the form of the far more regressive Council Tax, which is in any case capped by central government). Local authorities still get most of their money in the form of grants from central government. Devolution is happening, but in a piecemeal way, region by region, without an over-arching constitutional framework to enshrine local government’s budgetary powers. The next few years will see drastic cuts in central government funding to local government, with local authorities unable to borrow and having only limited revenue-raising powers to make up the shortfall: central government will continue to call the shots on how local councils can set business rates, for example, and increases to Council Tax are capped at 2% (councils need to hold and then win a referendum to exceed this cap). And, regardless of where the money comes from, most local government spending is statutory, leaving little scope for discretionary expenditure. So when you vote in a local election in the UK, what exactly is it that you’re voting for?
Jeremy Corbyn has called the proposed ban on town-hall boycotts “an attack on local democracy”. Yes, it is, but then what kind of local democracy do we have in the UK anyway? With only limited competence to raise and then spend money, one of the few ways in which the UK’s elected local politicians can execute meaningful policies is by determining how a local authority’s budget is spent within the narrow space still permitted by our controlling central government. By threatening “severe penalties” for local politicians who take such initiatives, central government wants to shut down that space too.
The Cities and Local Government Devolution Act 2016 promises great things, but it’s hard to trust central government to give real power to local politicians. We saw in the 1980s how Westminster will go to great lengths to muffle its democratically elected enemies in local government, and this move to ban town-hall boycotts has a whiff of déjà-vu about it. Can we expect a majority Conservative government to stand back when devolved local government takes action against austerity?