REVEALED:52 Peers Sitting in House of Lords Hold Interests in Fossil Fuel Industry
The finding raises questions about the UK’s commitment to achieving net zero – with one MP telling Byline Times ‘it’s akin to asking arsonists to legislate on robust fire safety legislation’
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Fifty-two members of the House of Lords hold interests in the fossil fuel industry – a 20% increase from this time last year, Byline Times can reveal.
Forty peers have shareholdings of more than £50,000 in oil, gas, coal mining and pipeline companies and fossil fuel-focused energy firms.
Twenty-six (65%) are Conservative peers and a further 12 are crossbench or non-affiliated members. The upper chamber currently has 774 sitting members, 261 of which are Conservatives – meaning that fossil fuel interests represent roughly 10% of the Conservative Lords roster.
Twenty-five of these peers hold stakes in oil giant Shell, while others have holdings in ExxonMobil, Glencore, BP, Chevron, Equinor, Total, Petrofac, and 23 other similarly linked firms – interests that amount to millions of pounds.
The Lords register of interests states that members must declare any shareholding “amounting to a controlling interest” or “not amounting to a controlling interest, but exceeding £50,000 in value”.
A further 12 peers – five Conservatives, six crossbench, and one Labour – advise or hold directorships in firms linked to the sector. Additionally, five members of the House of Lords held interests via shareholdings or directorial and advisory positions in big polluters until earlier this year.
One peer Byline Times spoke to said that interests should be declared in bands of £50,000 upwards so that the scale of investment is made known. “Reports from so-called think tanks which often lobby MPs and peers on fossil fuel issues should also disclose their relevant sources of funding on similar principles,” they added.
In addition to the 52 peers identified as having direct ties to the industry, at least eight more hold shares in wealth management giants and with extensive fossil fuel portfolios, like BlackRock and JP Morgan.
Labour MP and former Shadow Business, Energy and Industrial Strategy Secretary Clive Lewis told Byline Times that one of the reasons that governments around the world “are failing when it comes to decarbonising at a speed and scale compatible with keeping global temperatures under 1.5°C” is the “political influence big oil and gas money exerts on political decision-making”.
“It’s therefore hardly surprising we’ve fallen so far off the mark here in the UK when it comes to renewables investment and decarbonisation when a sizeable number of government legislators have such direct financial and advisory interests in the oil and gas industry,” he said.
“It’s akin to asking arsonists to legislate on robust fire safety legislation. Frankly, it would be laughable if it wasn’t such a dire and existential threat we faced.”
Green Party peer Baroness Jenny Jones told Byline Times that the Government is “in the pockets of the oil and gas industry and that has an impact on decisions about licences, tax breaks and restrictions on the growth of renewable energy schemes”.
“While peers don’t make decisions about windfall taxes, they do regularly have to make policy choices about climate change legislation,” she said. “Having shares in oil and gas means you are profiting from a product that is already leading to heatwaves, droughts, floods and crop failures. It will inevitably influence your choices about how seriously to take the climate emergency and how much to promote policies that benefit the non-carbon energy sources that are now replacing oil and gas.”
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Building on reporting of the already extensive interests held by members of the Lords last year by The Ferret, it remains the case that a surprising number of peers still hold a significant interest in polluting sectors. In fact, while the number of sitting members of the Lords has decreased, the percentage of them with ties to polluting industries has actually increased during that time.
The Ferret highlighted an initial 43 with either shareholdings or other interests within the House of Lords which, as of 1 October 2021, held 789 sitting members. The percentage composition of Conservative interests, however, remains the same – at around 10% of the membership at each given time.
Greenpeace has accused politicians of being “worryingly cosy” with the fossil fuel industry, with a spokesperson asking “how can these powerful people be trusted to seize the opportunities of the green industries of the future, when they directly benefit from propping up business as usual?”
Meanwhile, Shadow Climate Change Minister Kerry McCarthy warned earlier this year that oil and gas companies have benefitted from a “uniquely generous” tax regime in the UK, created under successive Conservative governments. It was reported last year that the party has received £1.3 million from fossil fuel interests since 2019.
As Chancellor in May, Rishi Sunak introduced a 25% levy on energy companies to raise billions, running until 2026 – but the plan included generous tax loopholes, providing breaks in return for investments in UK-based projects such as North Sea oil drilling. For instance, the UK stands to lose £100 million from the loophole if drilling at the country’s largest undeveloped oil field goes ahead.
While BP is expected to pay around £700 million because of the windfall tax on its operations in the North Sea, it also plans to spend £2.17 billion – three times that amount – on a share buy-back programme that will directly benefit its investors, rather than helping struggling families reduce the cost of their energy bills.
As Prime Minister, Sunak and his Chancellor Jeremy Hunt have – following pressure to increase the windfall tax – outlined plans to extend the levy until 2028 and increase the rate of tax paid by energy companies from 25% to 30%, in the hope of increasing revenue from the scheme by 50% during that time; an ambitious total of £40 billion. The announcement is likely to come in the Autumn budget.
But questions of whether or not the tax loopholes for polluters remain and the industry has posted record profits across the board during the last quarter. BP, for instance, recorded profits of £7.1 billion for the last three months – nearly triple what it made the previous year. Shell so far has paid zero windfall tax in the UK, despite making record global profits of £26 billion this year alone.
While Sunak eventually decided to attend this year’s COP27 UN climate change summit – after it was announced that Boris Johnson would be going – how seriously the UK will take its responsibility to achieve net zero remains to be seen.
One-hundred-and-forty countries, accounting for about 91% of greenhouse gas emissions, have proposed or set net zero targets by mid-century – which is necessary if the world is to avoid cataclysmic destruction on a scale unseen in human history.
The recent UN Emissions Gap Report 2022 shows that we are falling dismally short of keeping global temperatures to an increase of only 1.5°C, and current policies are on track to increase temperature rises to 2.8°C by the end of the century.
New analysis by the International Monetary Fund predicts that, to contain global temperatures to between 1.5 and 2°C, “global greenhouse gas emissions must be cut to 25 to 50% below 2019 levels by 2030”. Even if current national pledges were achieved, we would currently still only be on track to cut global emissions by 11%.