Debate: Is there any merit to Labour’s ‘financial totalitarianism’ plans to tackle climate change?

Q: Is there any merit to Labour’s ‘financial totalitarianism’ plans to tackle climate change?

Yes – Angus Satow is co-founder of Labour for a Green New Deal.

The free market is failing us. Despite enjoying free rein following Margaret Thatcher’s deregulation programme, the UK’s financial system has been completely unable to tackle the climate crisis.

Instead, banks are actively driving us over the climate cliff with their enormous investment in coal, oil and gas. Barclays alone has poured over $85bn into fossil fuel projects in the last three years.

Hope for a liveable future hangs in the balance. Shadow chancellor John McDonnell is totally right to argue for the need to “harness the full might of the Treasury in government to tackle climate change”.

To reach net-zero carbon emissions as quickly as possible, we must mobilise every sector of the economy, including finance. In doing so, we can make sure that bank lending is environmentally and socially productive.

If critics still aren’t convinced, it’s worth remembering that Threadneedle Street has warned of $20 trillion of assets being at risk from climate change. The status quo is not an option.

No – Dr Savvas P. Savouri is chief economist and partner at Toscafund Asset Management.

Of course the UK should lead the way in environmental best practice, but through policies that are economically practical, not fanciful. What is the point of leading others if, in pursuing an anti-business agenda, we set back the UK economy, indeed handicap it so much compared to its competitors that we tip into a sharp downturn?

Labour’s plans to force companies to green up their act are not just radical, they are counter-productive.

Recessions are environmentally unfriendly. Reduced profitability encourages a return to bad ways and favours those who do not employ climate best practice. Companies which had hitherto pushed ahead with good environmental behaviour would begin to drag their feet in a bid to survive, or go out of business entirely.

The laudable strategy of reducing the harm we are doing to our environment should involve tactics which help rather than harm our economy – and harm the UK is exactly what John McDonnell would do if ever chancellor.