Exclusive: proposal part of party’s plan to give City of London a lead role in helping UK tackle climate crisis
Last modified on Thu 26 Aug 2021 12.16 EDT
New listings of fossil fuel companies would be immediately banned on the London Stock Exchange as part of a proposal by the Liberal Democrats that the party says could help the UK become a leader in tackling the climate emergency.
Under the plan outlined to the Guardian by the Lib Dem leader, Ed Davey, another immediate policy would be to stop new bonds being issued in London to finance oil, coal or gas exploration.
Fossil fuel firms already listed in the UK would then have two years to produce a coherent plan about how they would reach net zero emissions by 2045, or risk being struck off the LSE.
In the longer term, pension funds would have to disinvest from fossil fuels by 2035, with all companies with fossil fuel assets removed from the exchange by 2045.
Davey, who on Friday marks the first anniversary of becoming the permanent leader of the Lib Dems, said such plans had the potential to achieve more than the UK’s own move to net zero emissions, or even its chairing of November’s Cop26 climate summit in Glasgow.
“The reality is that no matter how much governments spend, it’s going to be totally dwarfed by the amounts banks, private equity and hedge funds invest every day,” Davey said.
“So if you’re going to really take on climate change you’ve got to get that private capital to switch from dirty into clean. And this is a fundamental role for Britain in global leadership on climate change.”
Huge amounts of fossil fuel financing still went through London, Davey said, pointing to mooted plans by the part-Chinese owned Neptune Energy for a £7bn initial public offering. The company has interests in oil and gas production projects in a number of locations, including Norway, in the North Sea off the UK and Netherlands, in Egypt and Algeria, and with offshore gas in Indonesia and Australia.
Davey said: “We have a chance to change that in the UK. We don’t have to wait for anybody else to do it. And we would also show a leadership role to other financial centres. I think New York under President [Joe] Biden would have a real problem if the UK stole the march.”
The plan, which would apply only to fossil fuels used for combustion, would in the end help savers and pension funds, he argued: “There’s a massive lie being perpetrated by people in the City, these fossil fuel companies and the government. The lie is these investments are safe. They are not safe. If the City of London doesn’t take this seriously, it’s risking its own future.”
To mark the anniversary of becoming his party’s permanent leader, Davey is undertaking a tour of so-called “blue wall” seats, hoping to capitalise on the dissatisfaction of more traditional Tory voters. The Lib Dems won Chesham and Amersham in a byelection in June, taking the seat from the Conservatives, who had held it since the constituency was former in the 1970s.
Such people, Davey argued, would not be put off by his plans on the climate emergency, pointing to what he called a disconnect in Tory ranks over the issue between blue wall and the “red wall” seats, constituencies in once-Labour towns in the north and Midlands.
“A lot of Conservative voters really care about the environment, whether it’s green fields and nature, or the impact climate change is having on nature,” he said.
“But the government is being completely useless on this. We’re increasingly seeing in their red wall seats a lot of not climate denial, but climate delay, not taking the action that is required. And there’s a real split opening up on this in the Tory party.”
Boris Johnson had already botched preparations for Cop26, Davey said, noting as an example the decision to cut aid spending beforehand.
“The cuts to the aid budget are wrong, in and of themselves. But if you’re hosting the UN’s climate change talks, how daft is it to say to huge numbers of countries who will be critical for getting a deal in Glasgow, that we’re withdrawing our money and our support for you? It is the most absurd and irresponsible decision.”
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