Over £1bn of public sector workers’ pension money has been invested in companies aiding Israel’s attacks on Gaza – including by councils that boast about providing sanctuary for refugees.

According to the Palestine Solidarity Campaign (PSC) group, 52 of the 86 Local Government Pension Scheme (LGPS) funds across England and Wales have investments totalling £1.1bn in firms supplying weapons or systems to Israel. These include Lockheed Martin, RTX/Raytheon and Northrop Grumman – some of the world’s largest arms manufacturers. Investments have also been made in Elbit Systems – Israel’s largest weapons maker.

The number of funds with money invested in any company deemed by PSC to be “complicit” in Israel’s occupation of Palestine because of “products, equipment and services it receives” rises to 63 – and the total sum invested is north of £4.6bn.

Analysis by openDemocracy has found at least 42 of the councils with pension cash tied up in weapons and systems firms are also part of the ‘City of Sanctuary’ network, recognising their work to welcome and support refugees, or have said they welcome and support refugees.

More than 22,000 Palestinians have been killed in Israeli attacks on the Gaza Strip since Hamas killed 1,200 people on 7 October, according to figures from the Gaza health ministry. The United Nations estimates 1.9 million Palestinians in Gaza have been displaced.

Lockheed Martin and Northrop Grumman were last month handed multi-million-dollar contracts by the US Department of Defense to support Israel.

There are currently two million people paying into the LGPS – from social workers to bin workers and librarians – making it one of the largest pension schemes in the UK.

PSC director Ben Jamal said: “It is a national scandal that the wages of local government workers are being invested in companies enabling these catastrophic attacks. Israel’s carpet bombing and ground invasion of the besieged Gaza Strip has caused unimaginable suffering and devastation.”

The conflict has renewed calls for boycotts and divestment from companies enabling or aiding human rights abuses by Israel against Palestinians. But yesterday MPs signed off on the government’s Economic Activity of Public Bodies (Overseas Matters) Bill, also known as the “anti-boycott bill”, which will ban councils from doing just that if it passes through the House of Lords.

The bill has faced fierce opposition from those who say it is yet another attempt by the government to stifle civil resistance. Hundreds of people turned up to protest outside Parliament ahead of yesterday's debate.

Amnesty International labelled the bill “draconian”. Its UK CEO Sacha Deshmukh said: “With Israel’s lethal conduct in Gaza being heavily criticised all over the world, it’s utterly bizarre that ministers are trying to prevent members of councils and other public bodies from being able to consider the carnage in Gaza when drawing up and implementing their procurement policies.”

The LGPS is administered by councils and other public sector companies and investments are made either directly through shares in companies or indirectly through investment funds which hold shares on the behalf of the pension fund.

The West Yorkshire Pension Fund, administered by Bradford Council, has among the largest known complicit investments. Despite Bradford being named a ‘local authority of sanctuary’, data by PSC shows that as of 2022, more than £121m of staff wages was invested in companies deemed to be complicit in the occupation.

This includes over £33m invested in UK company BAE Systems, one of the world’s largest arms manufacturers. According to economic activism project Investigate, BAE Systems has supplied the Israeli military with weapons “including components for combat aircraft, munitions, missile launching kits, and armoured vehicles”.

Bradford Council did not respond to a request for comment, but a spokesperson for West Yorkshire Pension Fund said its £18bn portfolio is diverse and added it “has the responsibility to invest employer and employee contributions in order to ensure there are sufficient assets to pay the pensions of c300,000 public workers in the region”.

The spokesperson told openDemocracy the value of holdings in the companies cited by PSC make up less than 1% of the total fund and that “only a small proportion of the market value of these companies will be related specifically to the issues raised”.

“The sale of weapons is tightly controlled and companies operating in the sector require explicit government approval in order to gain export licences. The UK government continues to grant such licences to Israel”, they said.

North Yorkshire Pension Fund has the second largest investment in complicit companies, with over £116m pooled in firms such as BAE Systems, General Dynamics and Raytheon. It also claims to “campaign to influence political and other leaders to ensure humane and compassionate action in the national sphere” and provided funding to the Harrogate Sanctuary City project.

Gary Fielding, treasurer of North Yorkshire Pension Fund, said the fund takes “environmental, social and governance factors” into account, as well as human rights, in investment decision making.

He continued: “We do not have an exclusion policy in relation to armament companies in general, however we expect companies to abide by international treaties and conventions and expect that they will have followed domestic and international law in terms of their sales”.

The West Midlands Pension Fund invested £61m in weapons providers, including almost £12m in BAE Systems and over £10m in Lockheed Martin. Birmingham, Coventry and Wolverhampton councils, which are part of the fund, have all previously claimed to welcome refugees and asylum seekers.

Birmingham Council – the UK’s largest local authority – refused to comment, as did Coventry and Wolverhampton.

A spokesperson for the City of Sanctuary network said it had begun discussions on procurement and investment policies for its award criteria but added that for now, it is focusing on “improving policies and systems which directly improve people's lives and opportunities”.

Does your council invest pension money in companies deemed “complicit” in Israel’s occupation of Palestine? Find out here.