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Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
The writer is CEO of Lloyds Banking Group
The general election is a good time to take stock and ask how businesses can help the UK economy reach its full potential. As one of Britain’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 has become clear to me is the crucial role that the business community can play in collaboration with the government. If we are serious about ensuring long-term prosperity, three critical issues must be at the top of the next government’s business agenda.
First of all, economic growth. We can only solve the UK’s growth challenge if government and business work together to attract investment, improve productivity and tackle skills shortages. Modernizing our national infrastructure offers generations the opportunity to demonstrate what we can achieve together.
There is huge demand for new and greener infrastructure in Britain, with an estimated £40 to £50 billion of private capital needed annually over the next 20 years. The money is available if we can create an effective planning regime, be clear on the right projects to drive investment in skills, and provide reliable regulatory frameworks for key sectors of the economy that reward innovation and help boost growth.
In the area of financial services, regulation should enable banks to play their full role in providing loans and investments to get the economy moving, while ensuring financial stability and high standards of consumer protection. Ensuring that Britain remains an open, attractive destination for foreign investment will also help.
The second major problem concerns housing. We simply aren’t building enough houses. In England alone, almost 1.3 million households are on social housing waiting lists. In some parts of the country they will have to wait twenty years. When families struggle to find affordable, safe homes, it takes a toll on their mental and physical health, well-being and educational outcomes.
The next government must draw up a 10-year national strategy and commit to the reforms needed to achieve it. Decisive action on planning – and a more realistic risk approach that safely unlocks more funding for both local government and developers – are potentially huge steps. The government could also help deliver more social housing by investing in developments alongside the private sector and bringing buildings that are currently vacant back into use. We cannot afford to do nothing.
Third, we need to help people who work plan for the future and save for retirement. Automatic pension enrollment has been an important step towards greater security and peace of mind in retirement. But there is much more to do when it comes to achieving greater financial resilience for individuals and families.
We can learn a lot from countries that have focused on financial education, in addition to encouraging better use of savings and investment products that will be needed later in life. The next government should appoint a cross-party Lifelong Savings Commission to agree on how to meet the full breadth of people’s financial needs over the coming decades. Reforms to pensions and long-term savings will not only support consumers’ financial security, but also create valuable new capital flows for the UK economy.
As a country we have enormous potential. The financial sector can help people build and realize their ambitions. But to do that, we need the right foundations. The next administration faces a long list of challenges, but progress on sustainable growth, housing and financial resilience also offers enormous opportunities for growth. Across Britain and in every sector and industry, companies like ours are keen to work with any government as energetic partners to help Britain prosper.