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The writer is group chief executive of Aviva
I’m relieved we are having a general election in the UK in a matter of weeks. It ends the constant speculation that had become a distraction and stifled important policy debate.
My hope is that, regardless of which party wins, there is a clear result and mandate for the next administration. This will give the country both the political consistency and stability that are essential to seizing one of the biggest opportunities for economic growth — securing greater investment in the UK economy.
Britain has a lot going for it and I am optimistic about the nation’s prospects. The company I lead, Aviva, has 16mn customers in the UK and is the largest insurer of small and medium-sized businesses. We see many reasons to invest here: significant investable wealth, world-class universities, a strong science base, a respect for the rule of law, sound regulation and an entrepreneurial spirit, to name just a few.
The Association of British Insurers estimates that just from the insurance sector alone, £100bn of capital is waiting to be invested and we know there is similar desire in other sectors. So what’s stopping that appetite becoming a reality on the ground?
There are three areas that are ripe for action and will make a tangible difference to the UK’s investment climate.
First, long-term thinking. Investors require much greater confidence that vital infrastructure work will not be cancelled or substantially altered mid-project. We require our political leaders to look beyond the short-term parliamentary cycle to the next 20 and 30 years, which is the time horizon investors work to. Overcoming local concerns and party politics is no mean feat, but too often these forces have derailed much-needed investment in many areas of our economy, not least housing. It undermines investor confidence for the future.
Whether it is possible to secure cross-party consensus on binding targets for strategic infrastructure delivery is open to question. But such a step would radically improve our ability to invest in areas that have national importance, such as energy and transport. With binding targets comes accountability for both government and industry, helping translate words into meaningful action.
The second key area is planning and construction skills. While securing the capital waiting to be invested is a crucial first step, the full benefit will not be realised without dealing with a number of factors currently hindering the investment process.
Take, for example, the ability of local planning authorities to approve projects speedily. Limited resources and specialist skills within the planning system are delaying important investment that could promote growth across the country — for instance in low-carbon projects.
At Aviva, we would like to expand the five-year programme we have led with the British Chambers of Commerce to increase the pipeline of talent into the sector and build expertise among existing planners. Combined funding from both the government and business will give a boost to our planning capacity with more skilled planners. It is this kind of public-private approach that we need much more of to attract greater investment.
Likewise, even when projects are approved and ready to go, we are lacking the people and skills to build them. Acute labour shortages persist and it is essential to develop the construction expertise we need for projects that will be built in the decades to come. This undoubtedly means more national investment in training and vocational education to turbo charge our homegrown technical skills.
Third, there is matchmaking. In an age in which buyers and sellers are effortlessly matched online, those of us seeking to invest in the UK have no centralised means to match our investment to opportunities on the ground.
At the moment, investors rely on word of mouth and informal relationships to identify projects. We could transform the efficiency of investing in UK infrastructure by allowing investors to source projects more easily across different regions, sectors and capital requirements. This requires a national perspective that the UK Infrastructure Bank could be well placed to perform.
Whatever voters decide on July 4, and whoever forms the next government, businesses across the country will have a critical role in determining Britain’s future success. Like many other business leaders I have spoken to, I am optimistic about what we can achieve. The first 100 days of the next administration will set the tone.
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