Labour to City of London: We back your capital ideas

LABOUR, tipped in the polls to win a general election next year, courted the City of London financial industry on Tuesday (20), telling asset managers to come forward with growthboosting ideas for Labour’s election manifesto.

The City – “perhaps Britain’s greatest asset” – would be a partner in delivering investments in clean industries, Tulip Siddiq, Labour’s financial services spokesperson, told a conference of the Investment Association asset management trade group.

It was the party’s latest attempt to try and reassure the financial sector there would be no major regulatory upheavals under a Labour government.

Britain is expected to hold a general election next year, with Labour polling ahead of the governing Tories. Parties will begin unveiling their election platforms at annual conferences later this year.

“We actually want to speak to stakeholders and policymakers on the ground to see what would you like to see in a manifesto that speaks to the City of London and speaks to our financial services sector,” Siddiq said. “We want to make sure that we work in partnership with everyone in this room today.”

Siddiq said Labour was “excited about the ideas being generated by the City of London on how to generate larger pools of institutional capital,” singling out a proposed fund backed by veteran banker Nicholas Lyons, who serves as lord mayor, the financial district’s ceremonial head.

Reuters reported last month that Britain’s leading asset managers were in advanced talks to create the fund, with up to £50 billion from pension pots to back UK start -ups and stem the flow of technology firms snubbing London for New York.

The Conservative government is set to announce as soon as next month further steps to unlock pension cash to invest in the economy after unveiling a welter of reforms to ease rules in the financial sector post Brexit.

On Monday (19), Labour pledged to turn Britain into a clean energy superpower by 2030. It said it would overturn a ban on new onshore wind farms while respecting any oil and gas licences granted before the election.

Labour’s pledge to decarbonise the country’s electricity system by 2030 will require a huge increase in renewable power such as wind and solar. The proposal would mean rapidly weaning the country off fossil fuels such as gas, which accounted for almost 40 per cent of the country’s electricity last year, or adding technology to capture and store carbon emissions.

On Monday, Labour leader Sir Keir Starmer set out pledges for 100 per cent clean and affordable power by 2030; to establish a publicly-owned energy company, GB Energy; to create a National Wealth Fund to invest in green technologies and to up ­ grade poorly insulated homes.

“We can cut bills, create jobs and provide energy security for Britain,” Sir Keir said in a speech in Edinburgh. The plan would require government borrowing, the party leader said.

Labour would also overturn the ban on new onshore wind farms which Labour says has added £5.1bn to energy bills, or £182 per household, because Britain has been forced to turn to more expensive power.

The party has tried to position itself as the only party which can spur economic growth by investing heavily in green technologies and jobs with plans to rival similar investments in the United States and the EU.

However, earlier this month it pared back its flagship pledge to spend £28bn every year until the end of the decade on building up green industries, blaming high interest rates.

Starmer reiterated a pledge to stop new oil and gas exploration licences in the North Sea, but said any licenses granted before the next election, such as for Equinor’s EQNR.OL proposed Rosebank field, would be respected. He said that North Sea oil and gas would be part of the energy mix for “decades” but would have a diminishing return, and that Labour had a credible plan to manage the transition.

The government has criticised Labour’s plan to stop new oil and gas licences, saying it would leave the country needing to import oil and gas to make up the shortfall. (Reuters)