The decision has now ensured that the scheme is now able to pursue investments in places which contradict the UK’s foreign or defence policy and divest from those that do.

The campaign to overturn the ban was initiated by the Palestine Solidarity Campaign in 2016, when it won a judicial review at the High Court against the government on LGPS investments.

However, this decision was overturned on appeal by the Court of Appeal in 2018, before being overturned once more in the Supreme Court.

The government’s overturned ban had also meant that LGPS funds were unable to divest from or boycott companies that support the UK’s foreign or defence policy.

The Local Government Pension Scheme guidance said that local authorities should not use pension policies to pursue boycotts, sanctions or divestments against foreign nations or UK defence industries. The move was heavily criticised at the time of implementation and was even labelled as political interference.

The guidance was issued to 89 local council pension funds in England and Wales, the Financial Times reports.

GMB Union has welcomed the decision stating that the ruling means that the 4.6 million members of the scheme will now have the final say in how their scheme is administered.

George Georgiou, GMB pensions officer, said: “This is excellent news for LGPS members. Not only will it mean that they have a say in the way their fund is invested, but also that the Government can’t interfere on a whim to meet its own policy objectives.

“This precedent means that members will be able to invest their fund according to their own ethics, not the Government’s.”