Town halls have been warned of “severe penalties” if they impose boycotts on trade and investment with Israel.
Guidance to be published later this week will state that locally-imposed boycotts by public bodies – including councils – are “inappropriate” unless formal legal sanctions or embargoes have been put in place by the Government.
The guidance will warn that boycotts risk breaching a World Trade Organisation agreement signed by both the EU and Israel, which requires equal treatment for suppliers from all signatory nations.
And the Cabinet Office said that town hall boycotts can also “undermine good community relations, poisoning and polarising debate, weakening integration and fuelling anti-Semitism”, as well as hindering Britain’s export trade and harming international relationships.
Visiting Israel this week, Cabinet Office Minister Matthew Hancock is expected to say: “We need to challenge and prevent these divisive town hall boycotts.
“The new guidance on procurement, combined with changes we are making to how pension pots can be invested, will help prevent damaging and counter-productive local foreign policies undermining our national security.”
The new guidance will apply to all public bodies, including central government and the NHS as well as quangos and councils. Any public body found to be in breach of the regulations could be subject to severe penalties, said the Cabinet Office.
A spokesman for Labour leader Jeremy Corbyn said: “The Government’s decision to ban councils and other public bodies from divesting from trade or investments they regard as unethical is an attack on local democracy. People have the right to elect local representatives able to make decisions free of central government political control. That includes withdrawal of investments or procurement on ethical and human rights grounds.
Ryvka Barnard, senior campaigner at charity War on Want – which campaigns in favour of ethical investment and procurement – said: “It’s vital we protect the right of local councils to make divestment and procurement decisions based on ethical grounds, in relation to Palestinian human rights, arms trade, fossil fuels, and other issues of concern. We encourage everyone who believes in local democracy to make their voices heard.
“This attack on local democracy is the latest in a sustained assault on our democratic rights and freedoms. The threat is serious, and over 14,000 people have already responded to the Government and made known their opposition to this attack.”