How do we boost UK infrastructure? By investing in People, Places, Productivity and Prosperity

Nigel Wilson, Group Chief Executive of Legal & General, discusses the four areas that need to be addressed to help boost infrastructure across the UK.

Working closely with the BCC team and local Chambers of Commerce over the past year, we had conversations with business leaders in major cities (including Leeds, Bristol, Belfast, Liverpool and Manchester) and quickly became aware that although there are clear local differences between them, many share the same issues.

Keeping hold of talented people

The UK is bursting with outstanding entrepreneurs, with record numbers of new companies being set up.

Up and down the country we have world-beating scientists and universities, covering Artificial Intelligence, robotics and quantum computing, to energy and telecoms, to genomics and life sciences. There are more people in work than ever before, yet during our talks with the Chambers of Commerce, there are worrying reports of skills shortages. We need to create conditions where talented people want to stay in the cities where they live or graduate, rather than feeling as if they must go to London to pursue a career.

Investing in places

Many of our cities and regions are benefitting from greater local devolution. In Newcastle, Manchester, Leeds, Birmingham (and many other places), having this local empowerment can help bring forward new and dynamic local plans – much more effective than central government in Westminster or Whitehall.

The local plans we have seen are compelling and visionary but also practical and above all investable. We need to fund and develop great places to work, and live, with new environmentally-friendly housing, great transport and healthcare that supports our ageing population.

Improving productivity outside of London

Compared with other countries such as Germany, the UK’s productivity falls short by about 30%, and the gulf is too wide between London and our other cities. Rather than complaining about unfair allocation of investment to London, local authorities can work in partnership with business and finance to breathe new life back into some of our biggest cities – creating a domino effect of good – because once productivity improves, so too do wages.

Prosperity: making money work harder than ever before

Since the financial crisis in 2008, there is now more money in the world available for investment than ever before, yet it’s never been so badly invested. By our estimates, the UK needs £150bn for housing, £100bn for urban regeneration, £40bn for clean energy, £90bn for transport and £125bn in additional SME financing – an investment deficit of over half a trillion pounds. Pension savings, insurance funds and sovereign wealth funds can help close this gap.

Investors, businesses and government (both national and local) need to step up and embrace “Inclusive Capitalism” - actively using the opportunity of change to up our game.Future science, future cities and future energies are exciting, sustainable ventures that will drive prosperity for British businesses if we invest correctly and seize the opportunities. History will judge us badly if we miss this opportunity.

Read the full BCC and Legal & General report here.

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