Is Holyrood investing in arms and fossil fuels?

Highlands and Islands MSP John Finnie lifts the lid In these hard times it’s vital that the public are able to understand where their hard-earned money is ‘invested’ and, vitally, who the beneficiaries of that public money are. Everyone agrees that Members of the Scottish Parliament are well remunerated for their work and, when their time as an elected representative is over, they will benefit for a pension paid for by the public.

That pension scheme is operated by the Scottish Parliamentary Corporate Body (SPCB), the committee that runs the facilities and back-room function of the Parliament. The SPCB is made up of officials and a representative of each of the so-called four ‘main’ parties with no place, as yet, for us pesky GrIndies!

In November last year, I asked the SPCB “what proportion of the Scottish parliamentary pension scheme is invested in the fossil fuel, defence and tobacco.”

The reply was “approximately 4 per cent of assets in oil and gas producers, 1 per cent in oil equipment services and distribution, 2 per cent in tobacco and 4 per cent in defence.”

Scotland must be good global citizens and I requested the SPCB “prepare an early report for members’ consideration, laying out how divestment in those unethical areas could be undertaken”. I await that response.

What did emerge from my initial question was that the trustees of the parliamentary pension scheme, four MSPs, “appointed Baillie Gifford as fund managers for the scheme and delegated the responsibility for day-to-day investment management to them”.

I was also told the parliamentary scheme is “in a pooled fund”, which means that the Scottish parliamentary pension scheme is one of a number of investors in the fund. To my surprise I was advised that “under those arrangements, the Scottish parliamentary pension scheme does not directly own any stocks and therefore cannot direct investment.”

This of course is mindless waffle, the financial and moral equivalent of ‘it was a big boy that did it’. How ridiculous for politicians to suggest they are unable to direct, or account for, how your money is invested.

I subsequently wrote the SPCB to ask what consideration it has given to the exposure of the pension scheme to the so-called carbon bubble risk, described in Scottish Environment LINK’s report, “Scotland and the Carbon Bubble”, and whether it is confident that the scheme’s managers are correctly valuing its investments in oil and gas producers.

Again in written response more excuses about it being a ‘group scheme’ and the delegation of responsibility to the Fund Managers. However, they interestingly advised me they had “brought the report to Baillie Gifford’s attention and asked them to comment on it and explain their investment strategy in terms of oil and gas producers”.

Now, why do that if, as already advised on more than one occasion that you have “delegated the responsibility for day-to-day investment management” to said Baillie Gifford.

Desmond Tutu said, “nobody should profit from the rising temperatures, seas and human suffering of climate change”, nor should we benefit from the sale of weapons of war, or from the cigarettes that kill 13,000 Scots a year.

Divestment from unethical industries has received a lot of coverage in the last year with Glasgow University leading the way in divesting from fossil fuels—the first university in Europe to do that—and I’m hugely proud of the Scottish student campaigners that made that happen.

However, it recently emerged that the University still held investments of three quarters of a million in two defence industries. Now, we all know how murky the finance waters are and they are even cloudier when you include the defence industries.

In 2013, I asked the Scottish Government whether it maintains details of companies in Scotland involved in research into, development or manufacture of armaments. I was told neither the Scottish Government nor its agencies held such information.

I later asked the Scottish Government whether it provides funding to any company involved in the research, development or manufacture of arms in Scotland only to be referred back to that first answer!

Eventually, using the Freedom of Information, I managed to get a copy of a Scottish Enterprise Report “An Industry Baseline Study for Aerospace, Defence and Marine Sector in Scotland” with dozens of pages redacted in bright day-glow yellow ink.

Now I find the issue of public investment, pension funds and the arms corporation inextricably linked—cloaked in secrecy. For a public body like Scottish Enterprise to initially withhold information then release it plastered in yellow ink indicates the contempt for the citizen understanding how and in whose interest their money is being expended.

It is rank hypocrisy for your Parliament and your Government to claim to be working for a healthy, sustainable and peaceful Scotland, when public money is going into bankrolling the very opposite.
My enquiries continue!