When he was Chancellor, Gideon Osborne was widely criticised for not introducing more environmentally friendly economic policies, and years after he stepped down his influence remains a drag on the green ambitions of the Town Hall pension committee, as KEN LEE reports
Extinction Rebellion are due to protest at Croydon Town Hall tonight, ahead of the full meeting of the council. The climate emergency activists are unlikely to be impressed by the Labour council’s claims of greening the local authorities’ activities.
As council leader Tony Newman prepares to declare a climate emergency in Croydon, some are daring to suggest that all the Labour politician has done is adopt a funky new hashtag and produced yet more hot air.
After more than five years in office, all Newman has to offer is the promise of a report (another one) on a “Green Deal” for Croydon, some wildflower seeds to be scattered on unmown road verges – though that won’t be until next year – and a very modest £250,000 of annual grants for community park groups.
The only real or substantial progress on tackling climate change from Croydon Council has come in the borough’s pension fund. But now there are signs that any progress there may be short-lived, too.
The council runs a pension fund for its staff, former staff and for the employers of staff who have been passed through various privatisations by Conservative governments and Blairite councillors.
Since 2016, under the chairmanship of Andrew Pelling, the investment banker and Labour councillor for Waddon ward, the council pension fund has prospered.
In three years, the value of the fund has risen by more than 40 per cent, from £863million to £1.242billion. The only time the Croydon pension fund has not increased in value since 2016 was the brief period when Pelling was sidelined by Newman, ordered to sit on the naughty step after he’d raised concerns about the council’s racist music licensing policies.
Part of the fund’s growth has been due to four investments in green projects which power 32,787 homes with clean energy, using on-shore and off-shore wind power and solar energy. According to pension committee papers, these investments alone are worth £139million, and they also add significantly to Croydon Council’s otherwise threadbare claims of being environmentally friendly.
The £1.2billion pension fund has also agreed to move to carbon neutrality.
But in an unusual degree of transparency for Croydon’s increasingly secretive Labour council, the pension committee minutes include details of what was discussed with the fund’s professional advisers, and suggests that this green initiative is running into trouble.
The advisers sternly warned Pelling’s committee that it “must pay attention to its fiduciary duties”. In other words, they can only make the move towards carbon neutrality if they think it will make even more money for the fund.
The committee’s minutes suggest that “fact-finding” and “a fuller carbon footprint exercise” will be undertaken to establish what can be achieved with other carbon neutral investments.
They have had to agree to consult pensioners and “other scheme employers”. Only then will they “implement the adopted policy”.
But the problems don’t stop there.
The committee of pensioners, unions and councillors were told that they will not be able to move to more green investments because they will be expected to join a pooling of local government pension funds into a regional collective investment vehicle, or CIV.
These funds were set up by Gideon Osborne when he was the Chancellor, before he went off to take a new job with a… private fund manager.
The Tory-led governments since 2010 have been widely criticised for failing to encourage greater investment in renewable energy, while being more sympathetic to old-school, oil-based businesses.
Osborne wanted to divert local authorities’ pensioners’ money into CIVs to invest in his pet projects like the HS2 rail scheme.
And Pelling and Croydon’s pension committee have been told that unless the CIV offers green investments, they will not be able to use the fund for more ethical investment.
“Members were reminded that implementation of the strategy would be through the CIV and that investments outside of the CIV may be limited by the outcome of the pooling consultation,” the minutes note.
So, whatever warm words Newman might offer tonight regarding Croydon’s declaration of a climate emergency, his council is meanwhile having to cool off its financial interests in the very areas of the economy that could provide most help for the planet’s future.
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