Divest East Sussex is made up of a group of organisations which are campaigning to divest the East Sussex Pension Fund from fossil fuels (oil, coal and gas). Current members are Fossil Free Hastings, Climate Forest Row and Keep It In the Ground Lewes. Supporters include Divest Sussex and the Brighton Climate Action Network.
On Tuesday May 9th, every Tory Councillor on East Sussex County Council (ESCC) voted to oppose a motion calling on the Council’s leader to write to the Prime Minister urging him to “close the massive loopholes in the existing windfall tax” on Big Oil. Gabriel Carlyle from the Divest East Sussex campaign reported from the meeting at County Hall. This article was first published in Hastings Online Times last month.
The vote at Tuesday’s Full Council meeting took place following a debate, triggered by a petition signed by 5,236 people from across East Sussex and Brighton & Hove, demanding that ESCC “stops investing in fossil fuels, and that it publicly supports a proper permanent windfall tax on Big Oil and a rapid transition to a system that provides affordable green energy for everyone”.
The East Sussex Pension Fund, which covers Brighton & Hove as well as East Sussex, is administered by the ESCC. It currently has tens of millions of pounds of local people’s pension monies invested in the giant oil and gas companies, like Shell and BP, that are driving the climate crisis.
Rother District Council, Robertsbridge Parish Council, Bexhill Town Council, Hastings Borough Council, Brighton & Hove City Council, Lewes Town & District Councils and Peacehaven Town Council have all publicly backed divestment, yet the Fund has consistently refused to stop investing in these companies.
The motion. which was raised by Green Councillor Johnny Denis and was supported by Green, Labour, Liberal Democrat and Independent Democrat Councillors, also took the Council’s continued investment in fossil fuel companies to task, noting that ‘a public commitment… to fully divest from these companies would send a powerful signal to policymakers about the need to get serious about tackling the climate emergency”.
It was defeated by 27 votes (all Conservative) to 18 (all non-Conservatives). Three Councillors (all non-Conservatives) were absent.
In a powerful five-minute speech to the Council chamber, lead petitioner and East Sussex Pension Fund member Sarah Hazlehurst noted that:
“Outrageously, a massive loophole in the UK’s current windfall tax is actually incentivising fossil fuel companies to pursue new oil and gas fields in the North Sea. Such a loophole is clearly incompatible with international climate goals. Moreover, it’s estimated that closing it would raise £22 billion over the next six years.”
She also noted: “Yet despite you declaring a ‘climate emergency’ over 3½ years ago, your Pension Fund is still investing local people’s pensions in the giant oil companies – like Shell and BP – that are driving the climate crisis. In doing so, it is effectively providing cover for these companies’ ongoing attempts to block effective climate action and missing a huge opportunity to show real leadership on the climate crisis.”
‘Political leadership’ and ‘obscene profits’
During the debate, Labour Councillor Godfrey Daniel condemned the “obscene profits” of the oil & gas companies, while Liberal Democrat Councillor James MacCleary noted: “Now is the time for us to step up and say, look, we’re going to show political leadership… Increasingly, this is what the public want to see.”
Following the debate, a spokesperson for Divest East Sussex, which co-ordinated the petition, told HOT: “The East Sussex Pension Fund could easily make itself the first Conservative-run local government pension scheme in the UK to make a public commitment to fully divest from fossil fuels – and it would be a huge feather in ESCC’s cap. But instead, Conservative County Councillors prefer to ignore the evidence, duck public questions, put up straw-man arguments and defend the fossil fuel companies. It’s truly shameful.”
Three terrible arguments
(1) State-owned companies
Conservative Councillor Redstone claimed that divestment ‘lack[ed] logic’ because most of the world’s fossil fuels are controlled by states, and so wouldn’t be affected by divestment. In reality, as Sarah Hazlehurst noted in her speech: “a ‘public divestment campaign’ – which works by getting institutions to make well-publicised public commitments to shift their investments out of a set of companies – aims to change government legislation and policy regarding these companies as a whole through a process of social stigmatisation… an approach with a proven track record.”
Such regulation would be highly likely to cover all fossil fuel companies: public, private and state-owned – whereas by definition ‘shareholder engagement’ can’t be used on private and state-owned fossil fuel companies.
In other words, only divestment can impact state-owned fossil fuel companies – precisely the opposite of Councillor Redstone’s claim.
(2) ‘Reducing demand’
Councillor Redstone also contrasted divestment with his favoured approach: “reducing demand” for fossil fuels, encouraging his bemused audience to “go vegetarian for perhaps some days a week” and to buy fewer goods from China.
In reality, massive reductions in carbon emissions will be necessary before 2030, if we’re to have any chance of meeting international climate goals. For example, emissions from the burning of oil and gas will need to fall by at least 44% and 39% respectively during this period.
Yet, absent international regulation and massive state intervention – precisely what the global fossil fuel divestment campaign aims to bring about – there is precisely zero chance of this happening spontaneously.
Indeed, as Sarah Hazlehurst noted in her speech, currently “not a single major oil company can credibly be argued to be aligned with a 1.5ºC pathway, and…almost all upstream oil and gas companies are pursuing expansion plans”.
(3) Cost of living
Conservative Councillor Ian Hollidge – another Pension Committee member, vehemently opposed (“fundamentally wrong”) the very idea of a windfall tax on Big Oil, apparently unaware that his Party introduced one – albeit one with “massive loopholes” – in May 2022.
Such a thing, he claimed, would “increase the cost of living for the most vulnerable”.
In reality, closing the “massive loopholes” in the current windfall tax on Big Oil, “could reduce millions of families’ energy bills by £336 a year”, according to research conducted last year by the New Economics Foundation (NEF).
According to a report in the Independent: “The think tank said shutting the loophole could pay for an emergency insulation programme for 3.31 million of the leakiest homes across the UK … spending £3.6bn of the money raised from an expanded windfall tax on insulating the least energy-efficient homes – bands D and below – would save each of those households £336 a year”.
Moreover, “If the government helped triple the capacity of onshore wind, offshore wind and solar by unblocking planning constraints, it would lead to £28.5bn of savings in the UK’s energy costs by 2025”, the study found.
Plainly then, closing the “massive loopholes” – and getting serious about a rapid transition to renewables, exactly as demanded in the petition – would lower the cost of living for the most vulnerable households (and many others too).