#London #United Kingdom #regional growth #UK Investment #Rathbones

Rathbones Calls for Regional Investment to Boost UK Growth

In a recent analysis, Rathbones, one of the UK's premier wealth management firms, highlighted critical issues impacting the nation’s economic structure. With offices and clients spanning across the country, their findings illustrate the urgent need for concerted efforts to address the disparities between regions, particularly emphasizing a pressing need for investment outside the South-East.

Geographic Disparities in the UK Economy

The report titled "Building Prosperity: Five Recommendations for Growth and Investment in the UK" underscored a staggering reality: the UK is touted as the most geographically unequal economy in developed nations. The detrimental impact of this under-investment has been particularly acutely felt in regions beyond the South-East, where high energy costs and inadequate transport infrastructure further stifle business investment and economic opportunities.

Rathbones conducted a litany of analyses with insights from their economists and investment research teams, detailing how some regions struggle with infrastructural and economic resources. The report stressed the considerable disparity in public transportation spending—evident with per capita expenditures in London being approximately 80% greater than those in Scotland, the next highest funded region. Furthermore, while 67% of people in comparable European cities can reach their city centers within 30 minutes via public transport, only 40% can do the same in the nine largest cities outside London.

Key Findings from Rathbones' Analysis

The report brings to light five essential areas for policy reform, including:

• - Pensions: Advocating for enhancements to boost investment through pension systems.
• - Business Taxation: Calling for an overhaul of the business taxation framework to encourage growth.
• - Regional and Public Investment: Asserting the necessity for increased funding in regional initiatives and infrastructure projects.
• - Wealth Taxation: Suggesting that further taxes targeting wealth should be resisted to alleviate pressure on investments.
• - Housing Market Reforms: Pleading for revitalization in the housing sector to support economic mobility and opportunity.

The Costs of Inequality

The ramifications of the current imbalance are staggering. UK industrial electricity prices are reported to be nearly 50% higher than the median price among developed economies, significantly more than those found in the USA or average European countries. This surge impacts energy-intensive industries, predominantly located outside of London, such as manufacturing and data center operations, which are fundamental in supporting the evolving digital economy.

Infrastructure, too, stands at a tipping point. The cancellation of substantial projects like the northern leg of HS2 and delays related to the Northern Powerhouse Rail represent missed opportunities that could have bolstered growth in the North and other neglected regions. Rathbones advocates for a renewed commitment to transport projects and further devolution of decision-making authority to regional entities, recognizing that local leaders have a more profound understanding of their unique challenges and needs.

Planning System Bottlenecks

Additionally, the report emphasized existing bottlenecks within the UK’s planning system, where less than a quarter of major planning decisions are finalized in the statutory 13 weeks. Rathbones insists on passing the Planning and Infrastructure Bill without dilution, aiming to expedite the approval process for significant projects which are crucial for advancing infrastructure and economic resilience.

Call to Action

Camilla Stowell, CEO Wealth at Rathbones, emphasized the pivotal role their clients play in driving economic activity and underscored the immense risks of neglecting regions left behind by inadequate investments in transport, energy, and public services. Stowell called upon the government to prioritize regional investments and renew its focus on infrastructure reforms to enable sustainable growth ambitions.

Oliver Jones, the firm's head of Asset Allocation and lead analyst of the report, stated that regional investment transcends matters of equity; it's central to unlocking the comprehensive economic potential of the UK. By inciting holistic infrastructure spending and energy reform initiatives, sustainable growth can be achieved, engendering new job creation and invigorating businesses throughout the country.

Rathbones urges immediate, impactful action, underscoring that targeted investment is not merely a luxury, but a vital necessity for the national economy to thrive.

Conclusion

The recommendations set forth in Rathbones' analysis underscore a broader narrative—the need for systemic change to elevate not just London, but all regions of the UK. It’s time for decision-makers to heed these calls for a more equitable and prosperous economy for all.