SKDC deposits taxpayers’ cash in Qatar state bank

The rainbow flag flew in front of their Grantham offices as South Kesteven council embraced LGBT history month.

Yet since voting against such a gesture the Lincolnshire local authority declared itself pleased “to celebrate and recognise the […] rights of lesbian, gay, bisexual and transgender people”, hoisting the flag outside its headquarters in 2019.

Across Britain, many other councils regularly follow suit, showing solidarity with their LGBT residents through their support of events such as Pride marches.

Yet a Guardian investigation reveals, at least 28 councils – including South Kesteven – have been quietly depositing more than £1bn of taxpayers’ money into accounts at Qatar National Bank (QNB), the state lender in a country where fans who display rainbow flags at next month’s World Cup may have them confiscated “for their own protection”.

The investments pose a moral dilemma for western institutions dealing with the tiny, gas-rich Gulf emirate – whether to prize financial returns over principles.

Some councils have pulled money out of QNB due to ethical concerns about Qatar, which has said it will welcome LGBT fans but where homosexuality is illegal, women are second-class citizens and migrant workers have died in their thousands.

But others have carried on with the investments, described by the human rights campaigner Peter Tatchell as “shocking”.

Few people in the UK will suspect that, in paying their council tax, they may have indirectly helped QNB bankroll these investments.

Yet freedom of information requests to every local authority in the UK show that at least 27 – including SKDC –  have invested more than a combined £1bn with QNB since 2017.

They do so as part of “treasury management” – effectively the storage of council tax money due to be spent on crucial public services.

QNB pays a healthy rate of interest – nearly 4% in some cases, according to council disclosures – a useful return for councils struggling with cuts to central funding.

Most told the Guardian that this was in line with their investment strategy. But not everyone in local government appears to agree that depositing cash with QNB is appropriate.

Councils that still had millions invested with QNB as of October 2022 include South Kesteven, Argyll and Bute, Swindon and Portsmouth.

“It’s shocking to learn that local authorities are depositing council taxpayers’ money with a state-controlled bank in such a homophobic country as Qatar,” said campaigner PeterTatchell.

“Through these deposits, local authorities are supporting a bank that funds the World Cup and sustain a regime that stands accused of human rights abuses against LGBT people, women and migrant workers.”