Labor MPs urged banks and investors to support defense firms

More than 100 labor MPs and colleagues have urged banks and investment firms to relax their rules on investing in defense companies.

In an open letter, first Reported by Financial TimesHe said that “sick” moral investment rules were withdrawing their reach to Finance.

He wrote that a change in approach will help the UK to protect its defense, and the government’s drive will contribute to promote economic growth.

This reflects a trend to emphasize the national security element of defense investment since the entire scale of Russia’s Ukraine in 2022 in recent years.

Leading arms companies have seen an increase in sales and their share prices in recent years, as the country wants to retreat after years of decline in defense spending.

Britain is one of the countries that are committed to spending, Sir Kir Star announced plans last week Increase in defense spending By 2.3% to 2.5% of national income by 2027, funded by deduction for foreign aid.

However, in his letter, politicians argued that the environment, social and governance (ESG) rules adopted by some banks and fund managers continue to influence the reach of the region to the finance.

He said that the ESG rules, which can be considered immoral in oil, tobacco and other areas, could prevent investment in the economy usually “positive changes”.

But he said that financial institutions should “rethink ESG mechanisms that often make all defense investment out”.

The letter was coordinated by the Labor Growth Group, which was formed by a group of MPs last year to distribute the major infrastructure projects to the government.

Some investment funds have adopted specific rules against investing in arms manufacturers and others have comprehensive rules that obliges them to consider the risk that investment may lead to human rights violations.

But some analysts have reported that the approach to investment in the region has shifted in recent years, with the share of ESG funds with shares in defense and shares in aerospace firms compared to 2022.

The previous orthodox government had also demanded to encourage defense investment, former Prime Minister Rishi Sunak argued that “there is nothing more moral than defending our way of life”.

The Trade Body the Investment Association for the UK Investment Managers signed a statement last year, stating that “good, high quality, well -running defense companies” invested with ESG ideas.

In his letter, MPs and colleagues also argued that defense firms had “faced unnecessary obstacles to trade in the UK,” while echoing complaints from the sector about the access of finance.

Industry lobby Group, ADS has earlier argued that the defense firms have to face high regulatory obstacles when it comes to securing bank accounts and loans.

These include the rules that bind banks to run increased money laundering checks for defense and security companies, and to ensure that they are not financing banned weapons under international treaties.

The group has also said that defense companies can often find it difficult to provide relevant documents to banks due to national security ideas.

A group representing British banks, Finance UK admitted that compliance rules could prove to be “complex”, but said that banks have provided “important range support” to defense companies.

The group’s managing director for commercial finance, David Raw said: “We are continue to join the government and the defense sector to fulfill any obstacle.

“We do not see a tension between supporting ESG goals and supporting the defense sector.”

The UK -based campaign against Arms Trade said it opposed any changes in the ESG rules on defense firms, which would benefit the firms to “make huge profit from death and destruction worldwide”.