BRITAIN will need an additional £1 trillion in investment over the next decade to drive economic growth, according to a report released on Friday.
Keir Starmer had set a target for annual economic growth of 2.5 per cent during his campaign before the July 4 election. This growth rate has not been consistently achieved in Britain since before the 2008 financial crisis.
Achieving an annual growth rate of 3 per cent would require an additional £100 billion in investment each year for the next 10 years, particularly in sectors like energy, housing, and venture capital, according to the report from the Capital Markets Industry Taskforce, a UK financial services lobby group.
The report's lead author, Nigel Wilson, former CEO of Legal & General, told Reuters that some of the investment could come from the £6 trillion in long-term capital held by Britain's pension and insurance sectors.
"We've underinvested in the UK for such a long time, there's a massive gap between the other G7 countries and ourselves," Wilson said. "We have the long-term capital in the UK, it needs to be reallocated."
The report stated that Britain needs £50 billion a year in energy investment to meet its net zero targets, £30 billion for housing, and £20-30 billion in venture capital.
It also suggested that the government consider offering incentives for investment, such as tax reductions on shares for retail investors.
A separate report published on Friday by think tank New Financial noted that UK pensions have a "significantly lower" allocation to domestic and unlisted equities compared to other developed markets. It suggested that UK pensions could double their allocations and still be in line with other advanced economies.
The UK government is currently reviewing the country's pension system, with the goal of increasing pension investment in domestic startups.
