Rathbones Urges Rapid Investment in UK Regions to Boost Growth
In a recent analysis, Rathbones, one of the UK's leading wealth management firms, emphasizes the pressing need for enhanced investment across various regions to foster economic growth. Highlighting the pronounced regional disparities found within the UK, Rathbones warns that the current economic landscape demonstrates significant inequality, particularly outside of the prosperous South-East. With energy costs soaring and inadequate transport infrastructure, many areas are considerably impeded, limiting both business investments and opportunities for growth.
The report, aptly titled "Building Prosperity: Five Recommendations for Growth and Investment in the UK," outlines critical areas of concern. According to Rathbones, the UK presents some of the most marked regional disparities among developed economies globally. London is noted for having transport expenditures that exceed those of the next highest spending region, Scotland, by up to 80%. As a result, in the largest nine cities outside of London, only 40% of residents can reach their city center within 30 minutes using public transportation, compared to 67% in similar cities across Europe.
Rathbones’ analysis draws from extensive research conducted by their economists and the investment research team, as well as feedback from clients nationwide. It identifies five areas where political action is deemed critical: retirement plans, corporate taxation, regional/public investment, wealth taxation, and real estate market reforms. The report insists that only a bold, investment-focused approach can disrupt the stunted growth and rising tax pressures that have encumbered the UK economy for years.
One of the main findings indicates the dramatic impact that regional imbalances have on competitiveness. For instance, industrial electricity prices in the UK are nearly 50% higher than the median in other developed economies, making businesses in energy-intensive sectors—especially those outside of London—vulnerable. High energy costs are of particular concern for manufacturing industries and data centers, which are crucial for the digital economy.
Additionally, infrastructure delays, particularly the cancellation of the northern segment of the HS2 high-speed rail project and holdups with the Northern Powerhouse Rail, threaten growth opportunities in the North. Rathbones advocates for a renewed commitment to large infrastructure projects beyond London, alongside greater decentralization of decision-making power to local authorities.
Planning system bottlenecks present another challenge, as delays and rising costs hinder progress. The report points out that fewer than a quarter of significant planning decisions are finalized within the statutory 13-week timeframe. Rathbones urges the government to pass planning and infrastructure legislation without dilution, with the aim of speeding up approval for major projects and ensuring proper financing for the planning system.
Camilla Stowell, CEO of Wealth Management at Rathbones, emphasized, "Our clients are integral to the success of the British economy. However, many regions are suffering due to underinvestment in infrastructure, energy, and public services. The government needs to prioritize regional investments and overhaul infrastructure if it wishes to genuinely stimulate growth. The evidence is clear: targeted investment can unlock opportunities, generate jobs, and support businesses nationwide."
Oliver Jones, Head of Asset Allocation at Rathbones and the principal author of the analysis, added, "Regional investment is not merely about equity; it serves to unleash the full economic potential of the UK. Our research indicates that comprehensive infrastructure spending and energy reforms can drive growth, create jobs, and bolster businesses throughout the country. The government must act now, enabling every region to contribute to and benefit from national prosperity."
In "Building Prosperity," Rathbones also calls for government measures to stimulate investment through pension systems, reform corporate taxes, oppose new wealth taxes, and revitalize the housing market, emphasizing a well-rounded approach to address regional disparities and strengthen the UK’s economic fabric.
The report, aptly titled "Building Prosperity: Five Recommendations for Growth and Investment in the UK," outlines critical areas of concern. According to Rathbones, the UK presents some of the most marked regional disparities among developed economies globally. London is noted for having transport expenditures that exceed those of the next highest spending region, Scotland, by up to 80%. As a result, in the largest nine cities outside of London, only 40% of residents can reach their city center within 30 minutes using public transportation, compared to 67% in similar cities across Europe.
Rathbones’ analysis draws from extensive research conducted by their economists and the investment research team, as well as feedback from clients nationwide. It identifies five areas where political action is deemed critical: retirement plans, corporate taxation, regional/public investment, wealth taxation, and real estate market reforms. The report insists that only a bold, investment-focused approach can disrupt the stunted growth and rising tax pressures that have encumbered the UK economy for years.
One of the main findings indicates the dramatic impact that regional imbalances have on competitiveness. For instance, industrial electricity prices in the UK are nearly 50% higher than the median in other developed economies, making businesses in energy-intensive sectors—especially those outside of London—vulnerable. High energy costs are of particular concern for manufacturing industries and data centers, which are crucial for the digital economy.
Additionally, infrastructure delays, particularly the cancellation of the northern segment of the HS2 high-speed rail project and holdups with the Northern Powerhouse Rail, threaten growth opportunities in the North. Rathbones advocates for a renewed commitment to large infrastructure projects beyond London, alongside greater decentralization of decision-making power to local authorities.
Planning system bottlenecks present another challenge, as delays and rising costs hinder progress. The report points out that fewer than a quarter of significant planning decisions are finalized within the statutory 13-week timeframe. Rathbones urges the government to pass planning and infrastructure legislation without dilution, with the aim of speeding up approval for major projects and ensuring proper financing for the planning system.
Camilla Stowell, CEO of Wealth Management at Rathbones, emphasized, "Our clients are integral to the success of the British economy. However, many regions are suffering due to underinvestment in infrastructure, energy, and public services. The government needs to prioritize regional investments and overhaul infrastructure if it wishes to genuinely stimulate growth. The evidence is clear: targeted investment can unlock opportunities, generate jobs, and support businesses nationwide."
Oliver Jones, Head of Asset Allocation at Rathbones and the principal author of the analysis, added, "Regional investment is not merely about equity; it serves to unleash the full economic potential of the UK. Our research indicates that comprehensive infrastructure spending and energy reforms can drive growth, create jobs, and bolster businesses throughout the country. The government must act now, enabling every region to contribute to and benefit from national prosperity."
In "Building Prosperity," Rathbones also calls for government measures to stimulate investment through pension systems, reform corporate taxes, oppose new wealth taxes, and revitalize the housing market, emphasizing a well-rounded approach to address regional disparities and strengthen the UK’s economic fabric.
Topics Financial Services & Investing）
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