Taxpayer-backed net zero group donates to Labour

A government-backed organisation that raises cash for net zero projects has donated £100,000 of support to Labour.

The Green Finance Institute, which was set-up by former chancellor Lord Hammond with £2m of taxpayer cash in 2019, is advising shadow chancellor Rachel Reeves and shadow energy secretary Ed Miliband.

Donations of its services valued at £99,000 were unveiled by the Opposition last month, with the self-defined “action tank” agreeing to support Labour’s bid to create a National Wealth Fund. 

The arrangement was disclosed in the MPs’ register of interests, where the Green Finance Institute is listed as “providing policy support”. It suggests the company may be helping to shape plans that will form part of Labour’s manifesto in the upcoming election.

The involvement with Labour is likely to raise questions among backbench Tory MPs, given the Green Finance Institute’s roots as a state-backed venture. It advertises its ongoing links with the Government prominently on its website.

Labour’s decision to engage with the Green Finance Institute may also be indicative of future policy, should the party win power. The net zero group, which aims to galvanise private funding for green projects, has been a staunch champion of heat pumps and electric cars.

The Green Finance Institute was launched in 2019 with £2m in funding from both the Government and the City of London Corporation.

Lord Hammond said at the time that the organisation would “strengthen the competitiveness of the UK financial services sector and the UK’s global green finance brand”.

It is led by former Barclays banker Rhian-Mari Thomas.

Earlier this year, Ms Thomas urged Britain to imitate Joe Biden’s Inflation Reduction Act, which has provided green enterprises with billions of dollars in taxpayer subsidies.

In an interview with New Statesman, Ms Thomas said she would enact a law to force all legislation, regulation and judicial decisions to adhere to net zero targets if she were in power.

Ms Thomas is leading a task force to advise Labour on its proposed wealth fund, overseeing a committee that includes former Bank of England governor Mark Carney and the boss of Barclays CS Venkatakrishnan.

Ms Reeves plans to invest £7.3bn of taxpayer money into the fund, which will help create jobs in a zero-carbon economy.

This will include investment in carbon capture and storage, floating offshore wind farms and green steel. Labour has said its plans will create thousands of jobs for plumbers, electricians, engineers and technicians.

The Green Finance Institute’s decision to support Ms Reeves comes after the shadow chancellor accepted a £10,000 donation from a climate sceptic earlier this year.

A Green Finance Institute spokesman said it is “not a monetary donation”, adding that “it is providing services-in-kind to the Labour Party”. 

The spokesman added: “No taxpayer money is being used to support the development of the National Wealth Fund. The majority (83pc) of the GFI’s funding comes in the form of philanthropic grants, which is being used to meet staffing costs for this project for His Majesty’s Opposition.

“The government funding that we do receive is for specific contracted projects, and we have an agreed conflicts policy and information management approach with HIa Majesty’s Government.”

A Labour Party spokesman said: “The Labour Party engages with a wide range of independent organisations as part of our ongoing policy development work. Everything is declared in line with the rules.”