Rathbones Urges Immediate Investment to Revive UK Economic Growth
Rathbones Urges Immediate Investment to Revive UK Economic Growth
Rathbones, one of the foremost wealth management firms in the United Kingdom, has raised alarming concerns about the current state of regional investment within the country. In a recent report titled "Building Prosperity: Five Recommendations for Growth and Investment in the UK," the firm highlights that the UK is the most geographically unequal economy among developed nations.
The analysis indicates that insufficient investment in areas outside the southeast is hindering the UK’s overall economic potential, thus necessitating immediate action from the government. The firm is calling for decisive measures in the upcoming Autumn Budget to support growth and facilitate investments across all regions.
Key Findings from Rathbones’ Analysis
According to Rathbones, the stark inequalities in infrastructure and energy costs, among other criteria, are undermining the UK's economic prospects. For instance, it is reported that transportation spending per person is 80% higher in London compared to Scotland, the region with the next highest expenditure. In the nine largest cities outside of London, only 40% of residents can reach the city center in 30 minutes using public transport, compared to 67% in comparable European cities.
The report emphasizes five critical areas where political action is urgently needed: pensions, corporate taxes, public/regional investment, wealth taxation, and real estate market reform. Without a bold, investment-driven strategy, the report warns that the UK will remain trapped in a cycle of weak growth and growing fiscal pressures.
The Burdens of Energy Costs and Infrastructure Delays
Rathbones outlines a number of factors exacerbating the economic divide, particularly noting that electricity prices in the UK are nearly 50% higher than the average for developed economies. Industrial users face electricity costs four times greater than those in the United States and 1.5 times the European average. This disparity presents a significant hurdle for energy-intensive sectors, such as manufacturing and data centers that are essential for a thriving digital economy.
Moreover, delays in infrastructure projects, such as the recently canceled northern segment of HS2 and the hold-up in Northern Powerhouse Rail, pose further threats to growth in Northern England. Rathbones is advocating for renewed commitment to major transportation projects outside of London and for enhancing decision-making authority at city and regional levels.
Overhaul of Planning Bottlenecks
The report also sheds light on planning system bottlenecks that lead to delays and increased costs, revealing that less than a quarter of significant planning decisions are made within the legal timeframe of 13 weeks. Rathbones urges the government to approve the Planning and Infrastructure Bill without dilution to expedite project approvals and ensure adequate funding for the planning system.
Voices from Rathbones Leadership
Camilla Stowell, Wealth CEO at Rathbones, stated, "Our clients are at the forefront of driving real-world activity that fuels the UK economy. However, many regions are lagging due to insufficient investment in transportation, energy, and public services. If the government genuinely intends to spur growth, it must prioritize regional investment and infrastructure reform. The evidence is clear: targeted investment can generate opportunities, create jobs, and support businesses nationwide."
Oliver Jones, head of asset allocation at Rathbones and the report's lead author, emphasized the broader importance of regional investment, saying, "This isn't just about fairness; it's about unlocking the economic potential of the UK. Our research indicates that comprehensive spending on infrastructure and energy reform can significantly drive growth, create jobs, and bolster businesses throughout the nation. The government must act now to ensure that all regions can contribute to and benefit from national prosperity."
In their recommendations, Rathbones urges the government to:
- - Boost investment through the pension system
- - Reform business taxation
- - Avoid further wealth taxes
- - Revitalize the real estate market
Conclusion
As Rathbones emphasizes the urgent need for a reassessment of regional investment, the implications of their report promise to resonate throughout the UK’s economic landscape. The upcoming budget presents an opportunity for the government to address these critical issues head-on and pave the way for a more equitable and prosperous future for all regions of the UK.
Topics General Business）
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