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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is chief executive of Lloyds Banking Group
The general election is a good time to take stock and ask how businesses can help the UK economy release its full potential. As one of the UK’s largest retail and commercial banks, Lloyds has been working closely with a range of partners on how to generate more investment in everything from social housing to the green transition — and what’s become clear to me is the critical role business can play in partnership with government. If we are serious about delivering long-term prosperity, three critical issues should be at the top of the next government’s agenda with business.
First, economic growth. We will only crack the UK growth challenge if government and business team up to unlock investment, improve productivity and address skills shortages. Modernising our national infrastructure presents a generational opportunity to show what we can achieve together.
There is huge demand for new and greener infrastructure in the UK, and it requires an estimated £40bn-£50bn in private capital every year for the next two decades. The money is available if we can create an effective planning regime, be clear about the right projects to incentivise investment in skills, and provide reliable regulatory frameworks across key sectors of the economy that reward innovation and help foster growth.
In financial services, regulation should enable banks to play their full part in lending and investing to get the economy moving, while safeguarding financial stability and high standards of consumer protection. Ensuring the UK remains an open, attractive destination for foreign investment will help too.
The second key issue is housing. We simply aren’t building enough houses. In England alone, nearly 1.3mn households are on waiting lists for social housing. In some parts of the country, they’ll be waiting for 20 years. When families struggle to find affordable, safe homes it takes a toll on their mental and physical health, wellbeing and educational outcomes.
The next government should set a 10-year national strategy and commit to the reforms needed to deliver it. Decisive action on planning — and a more realistic approach to risk that safely unlocks more financing for local government and developers alike — are potentially huge steps. The government could also help deliver more social housing by investing in developments alongside the private sector, and bringing buildings which currently lie empty back into use. We cannot afford to do nothing.
Third, we need to help those in work plan for the future and save for retirement. Pension auto-enrolment has been a significant step towards better security and peace of mind in retirement. But there is much further to go in achieving greater financial resilience for individuals and families.
There is a lot we can learn from countries that have focused on financial education, alongside encouraging better use of savings and investment products which will be needed in later life. The next government should appoint a cross-party lifetime savings commission to agree how we address the full breadth of people’s financial needs for decades to come. Reform of pensions and long-term savings will not only support consumers’ financial security but create a valuable new flow of capital for the UK economy.
We have enormous potential as a country. The financial services sector can help people build and achieve their ambitions. But to do that, we need the right foundations in place. The next government faces a long list of challenges, but making progress on sustainable growth, housing and financial resilience present huge opportunities for growth as well. Across the UK and in every sector and industry, businesses like ours are eager to work with any government as energetic partners in helping Britain prosper.
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