In the latest attempt by Labour to display its green credentials, the shadow chancellor will use a speech in the City on Monday to commit to using the “full might of the Treasury” to tackle the issue. He will commit the party to forcing the private sector into investing in the “green industrial revolution”.
He will announce a review of the financial sector’s role in the climate crisis, looking at “where and how it is causing or exacerbating problems”. It will examine measures preventing financial institutions from “actively contributing to planetary heating or exposing our economy to financial instability”.
McDonnell, who has invited Extinction Rebellion, the environmental activist group, to brief his team, will promise to “marshal the resources and levers of power available to the Treasury to fund and drive the climate change emergency programme” under a Labour government.
It is the latest sign that Labour is responding to the threat from the Greens, who earned more than two million votes at last month’s European elections, just 300,000 votes behind Jeremy Corbyn’s party. They more than doubled their tally of MEPs in the process.
However, while Labour has upped its rhetoric on green issues, there are still few details of what the party would actually propose to do should it win the next election. Labour has committed to the target of reducing carbon emissions to net zero by at least 2050, with McDonnell saying that the party is seeking to bring the target forward. The government has committed to reaching a net-zero target by 2050.
It comes ahead of a rally in London on Wednesday 26 June when more than 15,000 people are expected in Westminster to lobby for urgent action on the climate. The event, called the Time is Now, is set to be the largest ever environmental lobby of parliament – and will include schoolchildren, grandparents, nuns, farmers, doctors and surfers.
McDonnell will use Monday’s speech to suggest he will implement measures pushing the public and private sectors into investing in technology needed to deal with the climate crisis. “Every one of Labour’s shadow ministerial teams has been charged with producing a programme of action defining their department’s contribution to tackling climate change,” he will say. “With the real prospect of an autumn election, we want to be fully prepared to roll out this climate change emergency programme as soon as we take over the controls of government.
“State and private sector resources will be required to invest in the infrastructure of the green industrial revolution envisaged by Labour. This includes the large-scale development of alternative energy sources and a carbon neutral transport system.
“Regulation as well as incentives will also be required to divert investment away from fossil fuels and into environmentally sustainable activities.”
It is the first in a series of speeches by the shadow chancellor, who has been attempting to set out more of Labour’s economic policy in case a snap election is called later this year. The party is desperate to ensure that its fudged position on Brexit does not doom its chances of securing office.
As part of the push, McDonnell will announce an inquiry into the so-called shadow banking system, where borrowing and lending takes place beyond the oversight of regulators. “Much large-scale investment is undertaken in the largely unregulated and opaque shadow banking system,” he will say.
“I am launching an independent inquiry into the role and activities of shadow banking in our economy to examine what state intervention may be required to increase the transparency and accountability of this sector to ensure it plays its full role in addressing the climate change emergency that we face.”
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