We wrote a blog at the start of May regarding concerns expressed in the local government arena about the Economic Activities of Public Bodies Bill (the “Bill”). 

Prior to the calling of the General Election, the Bill was sitting at Committee stage in the House of Lords. 

What was the issue with the Bill?

Briefly, there were concerns raised by the Local Government Association (the “LGA”) regarding the consequences of the Bill on the Local Government Pensions Scheme (the “LGPS”) and the risk of the Bill having “unintended, negative consequences on the ability of LGPS funds to pursue other legitimate responsible investment policies”.

There were other concerns raised as well. Those are set out in detail in our earlier blog as mentioned above. But they included: a request for clarification on who the “decision-maker” is for the purposes of the Bill, in the context of the LGPS and how it operates; and a call for ESG concerns to be addressed through more ESG-specific exemptions from the application of the Bill. 

What is the latest position with the Bill? 

The Bill has been dropped following the General Election being called on 22 May. 

Parliament was prorogued on Friday 24 May following the calling of the General Election. There was therefore a very short 'wash-up period' (two sitting days!) between the calling of the Election and Parliament’s prorogation, to allow the government to try to pass some legislation (usually only essential or non-controversial legislation) that was still in progress at that point.

However, any legislation not enacted by 24 May failed. This included the Bill. 

Parliament was then dissolved on 30 May. 


Given the significant concerns expressed by the LGA regarding the Bill, it is unlikely there will be (m)any tears shed (in the LGPS space at least) over its failure. However, it is worth noting that, should the Conservatives retain power, they have expressly stated in their manifesto that “We will bring back our Bill to ban public bodies from imposing their own boycott or divestment campaigns against foreign countries and territories.” 

So its very much a case of watch this space!

This article is current as of 14 June 2024.