Group Chief Executive
The Sunday Telegraph
1 Jul 2018
Creating real growth, the U.K. has a second chance, let’s seize it
Speaking in The Sunday Telegraph, Nigel Wilson explains why the UK need to lean into Brexit, increasing investment, building inclusive capitalism - not exclusive wealth.
Asset markets have enjoyed a record nine-year bull market. Central Banks’ programmes of Quantitative Easing provided monetary methadone to avert economic collapse, and regulators delivered a sedative to previously hyperactive, over-geared banks. In the UK, the end of austerity is being hinted at, we have a record 32.5 million people in employment, but low wages, investment and productivity.
Global debt however, keeps mounting up – it is approaching the unimaginable sum of $200 trillion. So far, low interest rates and low inflation have kept a lid on this debt time bomb. Central bankers now rightly worry about a “snapback”. Sovereign and retail debt is likely to be re-priced by nervous markets. As US interest rates move up, others will follow and defaults will rise.
Thanks largely to our Central Banks, our commercial banks are much safer than they were a decade ago. Many institutions can take actions to prevent a re-run of the last crisis, some are doing so, more need to follow. Technology is critical.
Our unique opportunity is the UK’s low productivity, which is 30% behind our major competitors. Unless we step up, we will continue to move towards being a low wage service economy.
The good news is that productivity improvement is simple. It is about investing more; in skills and training; research and development; modern production methods and infrastructure. We can’t repeat previous mistakes, where great British inventions and discoveries like the World Wide Web (developed by Tim Berners Lee), DNA (Crick and Watson) now form the basis of hugely successful US and Chinese enterprises. Friends Reunited predated Facebook, lastminute.com predated Airbnb, but today of the world’s largest twenty tech firms, eleven are American and nine are Chinese. None are British or European, hugely disappointing.
... to achieve real growth and scale-up requires an eco-system that provides proper financial backing, physical and digital infrastructure, and civic amenities like better transport and housing, so our once great cities become “cities of the future”, wonderful places to both live and work.