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Labour should break its fiscal rules to allow borrowing on the scale needed to fund green growth, and resolve its “hypocritical” position on oil and gas licences, the co-head of Greenpeace UK has said.
Shadow chancellor Rachel Reeves has vowed to borrow only to invest and has pledged to match Prime Minister Rishi Sunak’s target to have national debt falling if Labour comes to power.
When asked if Labour should break its rules to spend more on the green transition, Areeba Hamid, the organisation’s joint executive director, said: “Yes . . . because the rules were thought of at a time when the economic situation was very different.
“Breaking those fiscal rules, to my mind, is about investing in an economy which is sluggish at the minute. It’s about bringing it back to life,” she told the Financial Times.
Earlier this year, Labour slashed its £28bn annual green spending pledge, which would have been entirely funded by debt, to £4.7bn a year amid concerns about constrained public finances.
This week Sunak called the general election for July 4, as the Tories trails Labour by 21 points in national opinion polls.
Hamid argued that loosening its fiscal constraints would enable Labour to invest more in supporting oil and gas workers to reskill and find new jobs. The party has vowed not to grant new licences for North Sea fossil fuel exploration.
The caveat that Labour would honour existing oil and gas licences was “hypocritical”, Hamid said. “If you’re serious about meeting your climate target, you can’t go ahead with Rosebank,” she noted, referring to the biggest undeveloped oil and gasfield in the North Sea.
Labour declined to provide an official response to Hamid’s criticism’s but one official defended the party’s decision to only stop new North Sea fossil fuel licences, arguing that blocking existing ones would undermine investor confidence in the UK.
“It would be unfair on investors who have made big financial commitments to . . . retrospectively dishonour them,” they said.
Under its spending plan, Labour has promised to set up a new publicly owned clean power company, paid for by a windfall tax on the oil and gas sector, and to spend millions of pounds on job creation to underpin a green economy.
The Tories, meanwhile, have attacked Labour from the opposite direction, saying it would be “madness” to leave Britain more reliant on imported fossil fuel, which would generate more CO₂ emissions. Conservative ministers last year promised to “max out” North Sea reserves.
Greenpeace also said it would take a Labour government to court if it pressed ahead with development of Rosebank on the basis that the decision to do so is incompatible with national targets to cut greenhouse gas emissions, building on its existing legal challenge.
Hamid said the organisation’s campaign plans would adapt to a left-wing government, given the “mood music [on climate] is going to change monumentally”. “We’re not in a hurry to scale anyone’s roof,” she said.
Greenpeace activists sparked concern over the security of politicians last summer when they climbed on to Sunak’s North Yorkshire mansion to protest against his support for oil and gas drilling.
Hamid also responded to legal action brought against the organisation by fossil fuel companies whose extraction activities it has criticised.
Shell is seeking more than $1mn in damages and legal costs from Greenpeace, after protesters occupied the company’s floating oil platform last year, in a case that started in the English Admiralty Court on Friday.
“The gloves are off. They [Shell] have decided which side of history they’re on and that clarity has been quite useful for our campaigning,” Hamid said.
Shell said: “The right to protest is fundamental and Shell respects this absolutely, but it must be done safely and legally.”
Greenpeace has raised more than $1mn in donations to fund its defence since November.