I received my pension statement through the post the other day. Like most people, I always simply just glance at it to ensure that it is enough to cover a few bills. However, with the high profile of Trump’s presidency grabbing my attention this week as well as hearing from friends that his policies were having such a profound effect on their pension investments, I paid a bit more attention than usual.
Looking at the long list of companies that my local authority pension was invested in, I realised that many were US companies (BlackRock, Shell, Amazon to name a few). Even more worrying, most of these were either engaged in in greenwashing and being subsidised both directly from public funds or indirectly through tax incentives, by both the UK and Scottish governments. Topping the list was BlackRock, a US asset management company, the second largest infrastructure investor in the world behind the Australian company, the Macquarie Group.
It is not unusual for US companies to invest heavily in Scotland, along with other foreign companies. Currently, foreign companies such as BlackRock are encouraged by both UK and Scottish Governments, as lobbying registers and ‘freedom of information’ (FOI) requests have shown, to increase investment in a wide variety of industry sectors. The US is the top of the table of investors in Scotland. How long this will continue during President Trump’s tenure is anyone’s guess.
BlackRock has chosen to invest in many different sectors. In Scotland, which has vast natural resources, they are currently working to expand its investment portfolio into the renewables sector, encouraged by the Scottish Government’s economic strategy.
BlackRock’s CEO Larry Fink stated in the company’s annual report that the renewables sector presented opportunities to turn a profit and increase returns for its investors, whilst at the same time aiding progress towards achieving net zero targets. BlackRock holds about $150bn in infrastructure assets worldwide, including in renewable energy companies.
Is foreign direct investment delivering the National Strategy for Economic Transformation (NSET)?
In briefing notes, prepared by civil servants for former First Minister Nicola Sturgeon prior to her meeting with a Blackrock executive, it was stated that, “We would encourage the role that BlackRock could play in supporting the delivery of NSET and would certainly welcome any plans they may have to increase their operations or capital investment in Scotland.” Recently, Deputy First Minister Kate Forbes has repeated the now hackneyed phrase that “Scotland is open for business” to attract what she refers to as ‘inward investment’ (foreign direct investment). However, problems are now arising because she has not simply offered a welcome mat in front of an open door, but a full-blown red-carpet treatment that BlackRock has been capitalising on.
The UK & Scottish Governments’ plans involve public money to incentivise BlackRock and others to invest in renewable infrastructure. These companies are interested in making profits and achieving market share so control over these infrastructure projects is a prerequisite. Alarm bells should be ringing. Remember the Private Finance Initiative (PFI) which has cost us all dear.
Greed, not green
The push towards Net Zero has now accelerated, with governments changing planning legislation to ease the provision of energy infrastructure. They say that this is necessary to reach net zero targets. Since the UK parliament has announced that net zero targets are unlikely to be achieved. What is the rush? Scotland is a lucrative target with its potential in renewable energy. Why do they need public funding? They do not; they want ownership and control, and the Scottish Government has paved the way. They can invest indirectly in wind farms using public funding, to lower the companies’ risks, whilst they reap the profits and pay dividends to their investors. BlackRock, and other asset management companies, are using public funds to enhance their investment returns.
Protest groups against the industrialisation of rural and island areas of Scotland with renewable infrastructure are raising awareness about the destruction of the environment, denial of amenity, related health & safety issues, plummeting house prices, and potential damage to vital businesses.
Meanwhile, the SNP are lauding the record numbers of inward investment, projects which stood at 142 in 2023, a 12.7% increase from 2022 as reported by Ernst & Young. At the same time, the SNP is paying lip service to communities affected by their own economic policies, which are mirror images of those developed by the UK Government. These policies are based on a failed and broken economic model, often referred to as neoliberalism, based on free markets and deregulation.
Scottish Government’s failure to use planning tools
I hear the same phrase again and again from fellow Scots: they are “sick to the back teeth with the theft of our resources”. Yet our own politicians pay no heed and continue to aid and abet the UK Government in the industrialisation of our rural and island communities with energy infrastructure. The Scottish Government does not use planning tools at their disposal and has agreed legislation with the UK government which will speed up the planning process. A map produced by Highland Council shows the level of industrialisation with infrastructure projects planned. Other areas such as Aberdeenshire and Moray should follow the Highland Council’s lead.
Further energy infrastructure, that includes battery storage systems, should not be built until all the wind turbines already in place are connected to the grid. The only area where governments have got ahead of themselves is in paying out constraint payments to wind turbine owners, paid for by consumers.
Additionally, the planners should not give any more wind farms the go-ahead until there are guarantees that a grid connection is ready. Why should public funding be diverted to constraint payments when reported waiting times for connections can take years?
Already we are seeing that BlackRock have lobbied against proposals to regulate lending, but are happy to accept subsidies to increase their renewable energy profits. It should come as no surprise, given Scotland’s vast natural resources, that the energy & utilities sector has the highest number of registered lobbyists on the Scottish Government register.
Successful lobbying by companies, such as BlackRock & SSE, will be dictating the terms of energy strategy and future climate policy, and their roles will have been cemented in renewable energy infrastructure for decades to come.
BlackRock profits come with a high price tag
The myth that privatisation of public services reduces costs has long been dispelled. The promise of lower energy bills from Labour will not be realised if the government is subsidising the monopolists. The promise of job opportunities in the hundreds of thousands by our own Scottish Government will never materialise, as these jobs will simply be replacing those lost to other sectors. Accelerating Net Zero infrastructure is increasingly being seen by those adversely affected by the never-ending push to install pylons, turbines, and battery storage facilities as greed, not green. Any negative fallout will not be laid at the door of companies such as BlackRock, but at the door of government green policy makers.
Government intervention is needed, but not in the form of handouts to foreign, private entities like BlackRock. Governments need to stop de-risking investments by BlackRock and their ilk. Subsidies and low tax regimes that guarantee returns for monopolists is corporate welfare. Public money should fund public services, and any future energy plans should focus on public ownership.
Lower energy bills can only materialise when governments start listening to the electorate, who want green, not greed.
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