3 in 5 UK councils invest in cluster bomb manufacturers

27 April 2006

New freedom of information study shows local authorities invest £723 million in major arms companies

One of the most extensive Freedom of Information investigations yet undertaken into UK council investments has revealed that almost all local authorities hold investments in 15 of the world's largest arms companies, helping to fund the manufacture of arms ranging from cluster bombs to nuclear weapons.

Released a week before council elections, campaigners say the study raises serious questions about the ethical values and democratic oversight of local authorities' investments, largely made without the input of voters and council employees.

The results of the 2006 Clean Investment survey are released today [Thursday 27 April] by the Campaign Against Arms Trade (CAAT). Using Freedom of Information legislation, researchers requested details from all 99 local authority pension funds of their shareholdings in the world's 11 largest military-producing companies, and the UK's 5 largest weapons manufacturers.[1] Of the 88 council funds who provided information, all but 2 invest in arms production.[2] One in three council pension funds helps to finance the manufacture of nuclear weapons through investments in Lockheed Martin, the world's largest arms company.

7 local authorities insisted on keeping their shareholdings secret on the grounds of commercial interests or confidentiality, despite their colleagues across the country providing comparable information under the requirements of the new legislation.[3]

See CAAT's Clean Investment campaign to find out how much your local authority invests in the arms trade.

An accompanying press pack is here

Key findings

  • UK councils invest at least £723,679,282 in the 15 international arms companies in the study: more than double what local authorities spend on promoting local enterprise and new businesses across the UK.[4]
  • 67 of the UK's 99 council pension funds invest £244,911,476 in BAE Systems, the UK's largest arms company. BAE Systems is currently the subject of Serious Fraud Office investigations into allegations that it paid £1m to Chilean dictator Augusto Pinochet, and operated a £60m 'slush fund' providing 'hospitality' for Saudi officials connected to a massive UK-Saudi arms deal. BAE has denied the claims.
  • 60 councils invest in one or more companies manufacturing cluster bomb munitions or their components.[5] Human Rights Watch has estimated that cluster bombs, which can create de-facto minefields, were responsible for more civilian deaths in the invasion of Iraq than any other tactic, and there are widespread calls for the munitions, like landmines, to be banned.
  • 33 councils invest £19,913,941 in Lockheed Martin, the world's largest arms company and arguably the world's biggest nuclear weapons maker. Lockheed manufactures Trident nuclear missiles for the US and UK, and is a contractor of the Aldermaston Atomic Weapons Establishment, which produces and maintains the UK’s nuclear warheads.
  • 33 councils hold investments worth £33,328,040 in Halliburton, the US military services conglomerate whose subsidiaries' work in Iraq continues to be embroiled in allegations of overpricing and faulty accounting, denied by Halliburton. In November the company rejected calls from the UN's Iraq audit agency, the International Advisory and Monitoring Board, for up to $208m to be repaid to Iraq.

CAAT hopes the figures will encourage local authorities across the country to institute ethical investment policies. Local campaigner Mike Kavanagh, who has been working to persuade Greater Manchester pension fund to invest ethically, said:

"The study destroys the argument that such council investments are supporting vital British industry: we now know that UK councils invest indiscriminately, including over £120m invested in US arms companies. Councils also argue that selling these shares would make their investments less profitable. Yet research by Deutsche Bank last year found that ethically-invested funds actually outperformed most other funds."

CAAT research coordinator Ian Prichard, who led the study, said:

"We were surprised by the sheer scale of the arms company shareholdings revealed by our study. These investments are unnecessary from a financial point of view: the UK arms companies in our study make up less than 2% of the FTSE100. Public money deserves to support public goods, not missiles and warheads."


  1. Companies included in the study were the UK's 5 largest arms-producing PLCs (BAE Systems, Cobham, VT Group, Rolls Royce and Smiths Group), and the 10 largest non-UK military products or services companies (EADS, Thales, Finmeccanica, Lockheed Martin, Northrup Grumman, General Dynamics, Boeing, Raytheon, Honeywell and Halliburton).
  2. Richmond upon Thames Pension Fund and Dumfries & Galloway Pension Fund are the only council pension funds for which information could be obtained which held no investments in the 15 arms companies. Both have pooled shares for which no information could be obtained, which might still include arms companies.
  3. Councils who refused information were Cardiff and Vale of Glamorgan, City of London, Cornwall, Devon, Dyfed, Gwynedd & Swansea. In addition, Barnet, Hammersmith & Fulham, Hounslow and Orkney have yet to respond to CAAT's requests.
  4. This is a minimum figure because it excludes shares held in pooled funds, for which information was not available. For enterprise investment: 2004-5 expected outturn on UK local authority current and capital expenditure on 'Enterprise and Economic Development' is £451m. See Public Expenditure Statistical Analysis 2005, Table 6.6
  5. According to Human Rights Watch, EADS, General Dynamics, Lockheed Martin, Northrop Grumman and Raytheon all produce cluster munitions or their components.
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