The mayor of London, Boris Johnson, has been pressed not to put profit before principle after it was revealed that the Greater London Authority has £100m of public money invested in a bank backed by Saudi Arabia.
The GLA treasury has a £2.5bn portfolio of investments in a range of foreign banks, including £100m in the Riyad Bank, which is 51% owned by the Saudi state.
Opposition parties have called on the government to distance itself from the Saudi regime in response to the execution of 47 people on Saturday, including the Shia cleric Sheikh Nimr al-Nimr .
UK government ties to Saudi Arabia have frequently been criticised because of the country’s poor record on human rights, including extensive use of the death penalty.
The Liberal Democrat leader, Tim Farron, called on Johnson to pledge never to invest public money in such regimes, saying “words are not enough”..
“Investing Londoners’ funds into Saudi government-backed banks seems to suggest Boris and his administration condone the horrific and systematic human rights abuses committed in the kingdom,” said Farron. “Investing in such places goes against everything London stands for. Profit should never come before principle.”
The investments are managed by the Group Investment Syndicate (GIS), which includes the GLA, London Fire and Emergency Planning Authority, the mayor’s office for policing and crime, London Pensions Fund Authority and London Legacy Development Corporation. The GIS’s overall investment strategy is personally approved by Johnson.
The group has another £100m invested in the National Bank of Abu Dhabi, which is majority owned by the government of the United Arab Emirates. The UAE government has also come under fire for human rights abuses. There is no suggestion that either bank is mismanaged.
A spokesperson for the GLA said the authority “has a duty to ensure its short-term cash balances are invested with an aim of minimising the risks of any loss to the taxpayer. Those investments are made by officials in the group treasury team, without political involvement and targeting high-quality and creditworthy institutions.”
Speaking to the BBC’s World at One programme, Farron said that the UK government’s attitude towards the Saudi regime was “almost sycophantic”. It should be “pragmatic, but not subservient”, he said.
“I think what’s important … is that as a country, being much clearer in our condemnation of the executions the other day would not only be right on a human rights aspect but also would send the right signals to Iran and to others in the Shia Muslim world that – as we try to make the Vienna process work – this is not the kind of action that we will tolerate.”
