UK needs to invest £1tn over 10 years in order to achieve economic targets

City taskforce says the UK will need to invest £1tn over the next 10 years if it is to meet its economic growth goals.

The Capital Markets of Tomorrow Report, headed by City veteran Sir Nigel Wilson and former Legal & General boss, stated that to achieve a minimum of 3% growth annually, the UK must attract approximately £100bn of annual investment, split between key sectors.

This includes £20bn to £30bn in support of the UK housing stock, £50bn in support of the energy sector and £8bn as part water projects. The plan also calls for £20bn to £30bn in venture capital for companies that have grown beyond the startup phase and require more sustainable funding.

The report stated that the challenge is to make the UK a “competitive market to invest in”. Despite the fact that many initiatives are already underway to increase investment in British companies and infrastructure, it was stressed that government and regulators need to focus on creating opportunities and offering incentives to investors. The global pitch must be equalized, it said.

Wilson stated that “there has never been so much money available in the world and looking for investment opportunities.”

The UK has £6tn in long-term capital from our pension and insurance sectors. The supply of capital is there.

The report stated that this includes the creation of new investment funds using the existing Long-Term Investment for Tech and Life Sciences (Lifts), to attract private money, and that tax breaks worth £60bn-£70bn for annual pension funds are applied in a manner that encourages investments in UK companies. The report also called for a reintroduction to tax credits received on dividends from UK companies. These were scrapped in 1997.

Wilson’s report emphasized that the UK must create a culture where consumers are more willing to invest in British companies and take on risks than they are to keep their money in cash. This could be achieved by eliminating stamp duty for share purchases and allowing businesses to encourage people with large savings towards investment.

The report called for a “streamlined”, UK ISA, which would allow investors to invest a set amount in British stocks tax-free. The last Tory government floated plans for a British ISA. However, this week, reports suggest that Rachel Reeves , the chancellor , is ready to put the project on hold before the 30th October budget.

The report was prepared for the UK Capital Markets Industry Taskforce, an influential group headed by Dame Julia Hoggett. Other senior figures from the City included the heads of Schroders Asset Management, GSK Pharmaceuticals, Phoenix Group, and Lakestar Venture Capital.

Hoggett stated: “We are fortunate to have an excellent foundation in the UK, which includes world-class universities and a highly respected financial services sector. But these opportunities must be taken.”

CMIT, which was founded in 2022 by the Centre for Investment and Technology, has been working to change regulations it believes are stifling investment and leaving the UK behind the US when it comes to developing capital markets, where companies and projects raise money, and economic growth.

The group also raised alarm about the increasing number of companies who are leaving the London Stock Exchange for rivals overseas, including the US.

Treasury spokesperson: “The chancellor was clear that there are difficult decisions ahead in terms of spending, welfare and taxes to fix the foundations for our economy and close the £22bn gap left by the previous government. The budget will decide how to proceed.

We have taken steps to revitalise our capital markets and to boost growth. For example, we announced a review of pensions investments to encourage more investment in domestic business.