Exclusive: Local authorities have ‘conflict of interest’ on fracking investments
Councils have holdings in firms seeking to drill in their area
Councils that will play a key role in deciding the future of fracking in Britain have investments worth millions of pounds in companies behind the energy extraction method, The Independent can reveal.
Local authorities in areas identified as potential sources of gas have holdings via their pension funds in firms seeking to drill within their boundaries. One of the most significant investments is £1.9m held by Lincolnshire County Council’s pension fund in Total, the French company that earlier this year became the first oil major to enter Britain’s dash for shale gas, with a £30m stake in two exploration projects in the county.
West Sussex County Council also has indirect holdings in Cuadrilla, which was at the centre of controversial tests in the village of Balcombe last summer. The council also has substantial investments, currently worth £3.5m, in Centrica, the parent company of British Gas – which last year took a 25 per cent stake in a Lancashire shale-gas project operated by Cuadrilla, albeit not directly.
The Greater Manchester Pension Fund (GMPF), which invests on behalf of Salford and Trafford councils, holds shares in Henderson Group, a major investor in IGas, another fracking exploration company that is conducting shale-gas tests in the Salford area.
All the councils insisted there was no conflict of interest between their pension-fund investments and past or future planning decisions on fracking projects. They pointed out that shares had been bought in all cases except Lincolnshire via investment funds, and councillors involved with pension fund-related decisions did not sit on their planning committees.
But campaigners said it sent the wrong signal and called on the local authorities to sell their holdings.
Simon Clydesdale, energy campaigner for Greenpeace UK, said: “It’s a worrying discovery. Fracking is already a dirty enough industry without getting mired in the murky waters of conflicts of interest. Councils must disinvest and show local voters that they can be trusted to put the interests of their constituents first when making crucial decisions on fracking applications.”
With assets worth about £120bn, local authority pension funds are among Britain’s largest investors.
David Forbes, Lincolnshire’s assistant director of resources, said: “The pension scheme operates within a set of clear investment principles and is overseen by the pension committee, which makes its decisions independently from the county council.”
West Sussex County Council said its investment in Cuadrilla, worth some £26,000, was minimal and equated to some 0.001 per cent of the total value of its £2.45bn pension fund. In a statement, the council said: “Any indirect investments made by the pension fund’s investment managers would not have any influence at all in determining a planning application.”
Salford City Council said its planning panel members had no role in deciding where GMPF invested its funds. GMPF acknowledged its holding in Henderson Group but said it had no investment, direct or indirect, in IGas.
Additional reporting by Will Cottrell and Ed Jones
- 2 Top Gear: Jodie Kidd, Philip Glenister and Guy Martin 'in advanced talks' to join show
- 3 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 4 University student in court for allegedly covering housemates' food in window cleaner and spit
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
University student in court for allegedly covering housemates' food in window cleaner and spit
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
In defence of liberal democracy
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
Andy McSmith's Sketch: Feisty audience is the real star of an enlightening show
£13676.46 - £16411.61 per annum + OTE: SThree: SThree Trainee Recruitment Cons...
£18000 - £22000 per annum + training: Ashdown Group: Business and Marketing Gr...
£20000 - £25000 per annum + Commission: SThree: Are you great at building rela...
£20000 - £22000 per annum + excellent benefits: Ashdown Group: Application Sup...