“The project that will define the next Labour Government”. This was Ed Miliband’s, Shadow Secretary of State of Climate Change and Net Zero, rallying call at our latest event that unpacked the role of the City of London in delivering Labour’s Green Prosperity Plan.
Ed Miliband was joined by panellists from the Green Alliance, the Impact Investing Institute and NEF to discuss how the City can partner with Labour to unlock the capital needed to deliver Labour’s Green Prosperity Plan – its ‘North Star’ on the green transition. The Plan encompasses a comprehensive set of measures that will seek to position the UK at the forefront of the international push to Net Zero, with commitments to make the UK the first major country to commit to having a zero-carbon electricity system in place by 2030 and establishing a publicly owned energy generation company within its first year in government, Great British Energy.
The discussion centred on issues such as the UK response to Biden’s Inflation Reduction Act, the greening of financial systems and mobilising finance for the clean growth agenda, and the importance of a just transition.
Panellists warned against inaction and delay that is already threatening London’s position as the preeminent green finance capital of the world and called for the UK to seize the massive economic opportunity – positioning Labour as the Party to deliver a new generation of green, skilled jobs and a green inward investment boom.
Inflation Reduction Act
Panellists agreed that the Biden administration’s centrepiece climate initiative – the Inflation Reduction Act – which offers billions in subsidies and tax credits to incentivise the take-up of green technologies, as well as the subsequent EU response, pose a significant threat to the UK’s domestic efforts and risk capital flight.
However, they warned against pessimism and defeatism, citing the huge natural resources in the North Sea and the City of London as distinct competitive advantages for the UK. Miliband said Labour would implement a three-pronged approach in Government to unlock this potential: the establishment of an innovation-friendly policy and regulatory framework, the removal of obstacles such as a restrictive planning system, and deploying an active and interventionist approach to incentivise inward investment.
The greening of the City of London
Panellists noted the decisive shift in the politics of energy and climate change with a recent departmental rejig to combat the old trilemma of affordability, security and climate. They argued that the new Energy Department needs to be one of delivery, not just a policy workshop, with clear interventions to support the upscaling of green and affordable technologies.
On the issue of transition plans, panellists argued that they must be viewed as a tool of a modern industrial strategy with the City of London regulated as such. They thought that a robust system for mandatory climate disclosures offered a huge opportunity for the UK to punch above its weight globally and acknowledged that while disclosures are an important part of the puzzle, it is what happens next that will determine long-term success. The role of the regulators was also scrutinised, with questions over how the Bank of England has used the levers at its disposal to drive through climate disclosures.
A just transition
Panellists were later asked how financial institutions were navigating a just and fair transition to Net Zero to ensure that no one is left behind and the benefits are maximised in a fair and inclusive way.
The Green Prosperity Plan understands that workers need to be at the heart of a proper industry policy. Central to this is how job losses caused by the transition are mitigated and the necessary support is provided for reskilling the workforce, with calls to embed just transition principles into businesses’ transition plans as common practise. There was also agreement that green solutions must first and foremost be an economical proposition for the consumer, with the current burden on households having to shoulder the costs of retrofitting homes cited as an example.
On behalf of H/Advisors Cicero and Labour in the City, it was fantastic to host a packed room of financial services professionals and a big thank you to all the panellists who took part in a lively and thought-provoking discussion. It was great to see the green shoots of a genuine partnership between Labour and the City that can deliver a greener, more prosperous future for every part of the UK.
James van der Graaf
Senior Account Manager at H/Advisors Cicero